Administration: Distribution & Estate Accounts Flashcards
When can PRs make an interim distribution of the residuary estate?
A. Only after finalising the estate accounts
B. Never – interim distributions are not permitted
C. After distributing specific and general legacies
D. When confident sufficient assets remain to meet liabilities
D. When confident sufficient assets remain to meet liabilities
Explanation: Interim distributions can be made if PRs are confident they have enough assets left to cover future debts, expenses, and legacies. It helps beneficiaries access funds before final distribution.
What is the correct order of payment of legacies under general law?
A. Residuary, Specific, General
B. General, Specific, Residuary
C. Specific, General, Residuary
D. Residuary, General, Specific
C. Specific, General, Residuary
Explanation: Specific legacies (e.g. “my ring”) take priority, followed by general legacies (e.g. “£1,000”), and then the residuary estate (what is left).
Which category of legacy abates first if the estate funds are insufficient?
A. Residuary legacies
B. General legacies
C. Specific legacies
D. Demonstrative legacies
A. Residuary legacies
Explanation: Residuary legacies abate before general and specific legacies. This protects beneficiaries who were left clearly identified gifts.
How is a chattel (like jewellery) typically transferred to a beneficiary?
A. By formal deed
B. By declaration of trust
C. By physical delivery
D. By statutory declaration
C. By physical delivery
Explanation: Chattels are transferred by physically handing them over to the beneficiary. There is no need for registration or formal deed.
What is the purpose of a distribution account in estate administration?
A. To record the deceased’s income tax
B. To calculate inheritance tax
C. To show how residuary beneficiaries’ shares were paid
D. To estimate the estate’s gross value
C. To show how residuary beneficiaries’ shares were paid
Explanation: The distribution account outlines interim payments and final amounts given to each residuary beneficiary.
What should PRs do if a minor has a vested interest in a legacy?
A. Transfer the asset directly to the child
B. Delay payment until the child turns 21
C. Pay it to the deceased’s next of kin
D. Hold the property or appoint trustees
D. Hold the property or appoint trustees
Explanation: Since minors cannot give valid receipts, PRs can either hold the asset or appoint trustees under s.42 AEA to hold it for the minor.
What is the effect of a legacy being demonstrative?
A. It must always be paid in cash
B. It comes from a specific fund but is treated like a general legacy
C. It can never abate
D. It takes priority over general legacies
B. It comes from a specific fund but is treated like a general legacy
Explanation: Demonstrative legacies are paid from a specified fund, but if the fund is insufficient, the remainder is treated as a general legacy.
What is the role of estate accounts in administration?
A. To satisfy the probate registry
B. To prove the will was valid
C. To record the PRs’ personal expenses
D. To show how assets were collected, managed, and distributed
D. To show how assets were collected, managed, and distributed
Explanation: Estate accounts are the formal record of how PRs dealt with estate assets and liabilities. They include capital, income, and distribution accounts.
What is a general principle about who bears the cost of transferring an asset to a beneficiary?
A. The beneficiary bears the cost unless stated otherwise
B. The government reimburses transfer fees
C. The cost is shared equally by the PRs
D. The estate always bears the cost
A. The beneficiary bears the cost unless stated otherwise
Explanation: Unless the will says otherwise, the beneficiary receiving the asset must pay for the transfer (e.g. Land Registry fees).
What happens if a PR pays the wrong beneficiary due to misidentifying their entitlement?
A. The PR may be personally liable
B. The other PRs are liable
C. The PR is automatically exonerated
D. The beneficiary can keep the gift
A. The PR may be personally liable
Explanation: PRs must distribute accurately. If they fail to do so and a wrong payment causes loss, they may be personally liable for the mistake.
