Administration - dealing with the assets

Question 1

Uncertainty about specific beneficiaries - what are the requirements of the s.27 Trustee Act 1925?

Answer 1

The s.27 Trustee Act 1925 protects PRs from personal liability to pay unknown creditors.

The notice procedure requires the PRs to place an advert in the London Gazette (and a local newspaper) and wait 2 months from the date of the advert before distributing the estate.

Question 2

What is a Benjamin Order?

Answer 2

Used to protect against claims by creditors/beneficiaries who are known about but cannot be traced.

A Benjamin Order asks the court to order that the PRs should distribute the estate on the basis that the missing beneficiary pre deceased the deceased.

Question 3

At what rate do the PRs pay income tax in respect of income generated during administration?

Answer 3

PRs always pay income tax at the basic rate.

Question 4

What requirements should a variation comply with?

Answer 4

To be effective for tax purposes:
-a variation must be made in writing
-made within 2 years of death
-not made for monetary consideration

Question 5

Insolvent estates - what is the statutory order of assets to pay liabilities?

Answer 5

-assets that fell out of the residue e.g. because they lapsed, then
-residue assets
-then any money specifically set aside by the deceased to pay debts, then
-money retainer to pay pecuniary legacies
-property specifically bequeathed
-property over which the PRs have a general power

Question 6

Insolvent estates - what is the statutory order of assets to pay liabilities?

Answer 6

-assets that fell out of the residue e.g. because they lapsed, then
-residue assets
-then any money specifically set aside by the deceased to pay debts, then
-money retainer to pay pecuniary legacies
-property specifically bequeathed
-property over which the PRs have a general power

Question 7

Insolvent estates - what is the statutory order of assets to pay liabilities?

Answer 7

-assets that fell out of the residue e.g. because they lapsed, then
-residue assets
-then any money specifically set aside by the deceased to pay debts, then
-money retainer to pay pecuniary legacies
-property specifically bequeathed
-property over which the PRs have a general power