Administration - applying for the grant

Question 1

How do you identify personal representatives where there is a valid will and there are executors willing to act?

Answer 1

Executors will obtain a grant of probate with form PA1P.

Question 2

How do you identify personal representatives where there is a valid will but there are no persons willing to act as executors?

Answer 2

Administrators will obtain a grant of letters of administration with the will annexed with form PA1P.

The administrators will usually be the residuary beneficiary.

Question 3

How do you identify personal representatives where there is no valid will?

Answer 3

Administrators will obtain a grant of (simple) letters of administration using form PA1A.

The administrators will usually be the beneficiaries on intestacy.

Question 4

How many administrators or executors can act in the administration of the will?

Answer 4

One executor can always act alone.

Two administrators may be required where one of the beneficiaries is an infant or only has a life interest.

Question 5

When does an executor derive authority?

Answer 5

They derive authority from the will from the point of death.

Question 6

When does an administrator derive authority?

Answer 6

They derive authority from the grant of letters of administration - it does not act retrospectively.

Question 7

What should be checked to ensure the will is admissible?

Answer 7

The will is indeed the last will of the testator

It has not been validly revoked

It has been executed in accordance with the Wills Act

It contains an attestation clause which indicates that it was executed in accordance with the requirements of the Wills Act and raises a presumption of ‘due execution’.

Question 8

What should a solicitor establish/identify in respect of beneficiaries when reviewing the will?

Answer 8

Check the identity of any beneficiaries

Identify their nature and entitlement

Check if any gifts have failed.

For intestate wills, establish which members have survived.

Question 9

What assets can pass to personal representatives without a grant?

Answer 9

Payment to a beneficiary of assets under £5,000 under the Administration of Estates (Small Payments) Act.

Chattels

Cash

Question 10

Which assets do not pass through a personal representative’s hands?

Answer 10

Joint property
Insurance policies written in trust
Pension benefits

Question 11

What additional evidence may be required when sending an application for grant?

Answer 11

Evidence of due execution and/or capacity

Evidence as to knowledge and approval

Evidence as to remote witnessing

Evidence of plight and condition

Lost will

Question 12

When should the IHT400 be delivered to HMRC?

Answer 12

Within 12 months of the end of the month when the death occurred.

Question 13

When there is an excepted estate, should an IHT form be submitted to HMRC?

Answer 13

No form is submitted as HMCTS will pass on the value of the estate directly.

HMRC have 60 days from the issue of the grant of representation to ask for additional information.

Question 14

If an excepted estate is found to actually owe IHT, how long do the personal representatives have to submit the IHT400?

Answer 14

Six months from the discovery

Question 15

What are three types of excepted estates?

Answer 15

1. Small excepted estates
2. Exempt estates
3. Non-domiciled estates

Question 16

What is a small excepted estate?

Answer 16

Where the gross value plus value of any specified transfers/specified exempt transfers in the seven years prior to death does not exceed the nil rate threshold.

A spouse’s transferred nil rate band can increase the threshold.

Question 17

What is an exempt estate?

Answer 17

Estates where the bulk of the estate attracts the spouse or charity exemption.

Question 18

When should IHT be paid?

Answer 18

Six months after the end of the month in which the deceased died.

Any late payments will attract interest.

Question 19

What types of property can be paid on annual instalments?

When is it paid?

Answer 19

Land
Some types of business property

The first payment is due within six months of the end of the month of death. The following nine years are due annually.

Question 20

How can IHT be paid prior to the grant?

Answer 20

Direct payment scheme with HMRC
Life assurance
Assets may be realised without the grant
Loans from beneficiaries
Bank borrowing
National Savings and Government stock
Heritage property in lieu of tax
Obtaining a grant on credit

Question 21

What is the direct payment scheme with HMRC?

Answer 21

Where PR’s can arrange payment directly from the deceased’s accounts, provided the banks and building societies involved are part of the scheme.

Question 22

What happens if one of the executors is a minor?

Answer 22

Probate can be granted to the adult executors with a power reserved to the minor executor.

Upon attaining the age of 18, the minor can make an application to join the adult executors.

Question 23

How can a person appointed as an executor renounce their power?

Answer 23

Via Form PA15 which should have a witnessed signature and sent to HMCTS.

They should not have meddled in the estate prior to renouncing.

Question 24

What happens if the only executor is a minor?

Answer 24

Someone must take the grant on behalf of the minor by applying for a grant of letters with the will annexed for use and benefit of the minor.

This will usually be the parent or the guardian of the minor.

Question 25

How many executors can there be?

Answer 25

A maximum of four, but powers can be reserved to others if anyone renounces or another dies.

Question 26

How many administrators should there be for a grant of letters of administration with will annexed?

Answer 26

A minimum of two.

A maximum of four.

Question 27

What are the rights of the beneficaries?

Answer 27

They can take action regarding the grant

The right to compel due administration

Take action against PRs for a breach of duty

Following and tracing assets

Removal of PRs

Question 28

What actions can beneficiaries take in respect of the grant?

Answer 28

They can prevent the issue of a grant

They can compel the issue of a grant by asking HMCTS to issue a citation.

Question 29

How can a beneficiary prevent an issue of grant?

Answer 29

They can lodge a caveat with HMCTS online or by form PA8A.

This can last for six months.

HMCTS may issue a warning to a caveator to enter an appearance within 14 days. If they fail to do so the caveat is removed.

Question 30

How can a beneficiary compel the issue of a grant?

Answer 30

By asking HMCTS to enter a citation i.e. a method of forcing a party with a right to the grant to act.

Question 31

What types of citation can be issued by HMCTS?

Answer 31

A citation to take probate (where an executor has lost their right to renounce but not applied for probate)

A citation to propound the will (i.e. authenticating the will by obtaining a grant of probate)

A citation to accept or refuse grant (to clear off a person with a prior right to any type of grant who has not applied)

Question 32

What breaches of duty can beneficiaries take against a PR for?

Answer 32

A breach of fiduciary duty

Devastit (wasting of assets)

Question 33

What are the defences to a claim of devastit against a PR? (5)

Answer 33

The limitation period has expired

Protection against unknown or missing claimants by obtaining a Benjamin order or placing an advert in accordance with the Trustee Act

The deceased’s will excludes liability for the PR

An adult beneficiary knowingly consented to the PR’s breach of duty

The court has discretion to totally or partially relieve them if they acted honestly or ought fairly to be excused

Question 34

What are the rights of creditors if a PR is devastavit?

Answer 34

PRs may be personally liable and will need to pay creditors out of their own resources.

They should follow the Trustee Act procedure to provide a defence against unknown creditors.

Question 35

What are the requirements for the advertisement of creditors under the Trustee Act?

Answer 35

They must give no less than two months notice.

Must be in the newspaper or Gazette

Question 36

In the case maladministration, who can the beneficiary sue?

Answer 36

The correct beneficiary can recover compensation from the recipient who was wrongly paid and sue the PRs in a devastavit action.