Administration MCQs Flashcards
A woman left a valid will which appoints her civil partner as her executor and gives the whole of the woman’s estate to her adult sister.
The woman was survived by her mother, sister and adult son. The woman’s civil partner died before the woman.
Which of the following correctly states who would apply for the grant of representation of the woman’s estate?
The woman’s sister
The woman’s mother
The woman’s son
The woman’s sister and mother (two administrators are required)
The personal representative of the woman’s civil partner (under the chain of representation)
The woman’s sister
Correct. The woman left a will which does not validly appoint any executors. Therefore NCPR 20 applies.
Under NCPR 20 the person with the greatest entitlement to apply is the beneficiary of the woman’s residuary estate, here her sister.
The other options were incorrect because neither the mother nor son are beneficiaries and do not rank in priority above the sister. Only one PR is required (there are no life or minor interests) and the chain of representation does not apply.
A man died last month leaving a valid will appointing his spouse and brother as executors and giving the whole of his estate to his minor children.
The man’s gross taxable estate was valued at £800,000 and did not include any residential property.
The man’s spouse died two years ago. The man’s brother does has not taken any action so far in the administration of the estate and intends to renounce probate.
Assuming a paper application is required, which of the following most accurately states the items that will comprise the application for the grant of representation?
PA1A, IHT 400 and a form of renunciation.
PA1A, IHT 421. Provided the brother has not intermeddled no form of renunciation is required.
PA1P, IHT 421 and a form of renunciation.
PA1P and a form of renunciation.
PA1P.
PA1P and a form of renunciation.
Correct. The man left a valid will so form PA1P is required, even though the named executors (his spouse and brother) will not be making the application.
Inheritance tax will be payable following the man’s death. The value of his taxable estate is above the NRB and will pass to non-exempt beneficiaries. The man does not have any residential property so the RNRB will not apply. We do not know whether the TNRB may be claimed or not, but even if it did, the value of his estate is greater than 2 x NRB. As such the IHT 400 would be completed and sent to HMRC (not the Probate Registry). HMRC (not the executors) forward an IHT421 to the probate registry.
Renunciation is only possible if the executor has not intermeddled; the man’s brother has not intermeddled and renunciation is possible. A form of renunciation is always required where an executor is renouncing their role.
A woman dies leaving a valid will that appoints her spouse as executor and gives all of her assets to him.
The woman’s spouse takes out the grant of probate but he dies before completing the administration of the woman’s estate. He leaves a will appointing their adult son as his executor and the only beneficiary of his will.
Their son has just obtained the grant of probate for his father’s estate.
Which of the following is correct regarding who is able to administer the woman’s estate?
The son is not able to complete the administration of his mother’s estate because he is not named as her executor.
The son is able to complete the administration of his mother’s estate because he is the sole beneficiary of his father’s estate.
The son is not able to complete the administration of his mother’s estate without making a further application to the probate registry.
The son is able to complete the administration of his mother’s estate under the authority conferred by the grant of probate of his father’s estate.
The son is able to complete the administration of his mother’s estate because he is the ultimate beneficiary of her estate.
The son is able to complete the administration of his mother’s estate under the authority conferred by the grant of probate of his father’s estate.
Correct. The chain of representation under s.7 Administration of Estates Act 1925 applies. As the woman’s spouse had taken out the grant of probate of her estate before he died, and their son had taken out the grant of probate of his father’s estate, the chain of representation is complete. The son can complete the administration of both estates under authority conferred by the grant in his father’s estate. No further application is required.
A woman died leaving a valid will which shares her estate equally between her adult children. The woman’s sister has been appointed as executor of the woman’s estate.
One of the woman’s three children cannot be located and has been missing since going travelling two years ago. Despite carrying out extensive searches no one can find the missing beneficiary.
The woman’s sister wants to complete the administration of the woman’s estate and distribute the assets between the two other children. However, she is concerned about her personal liability should the missing child return later and claim their 1/3 share.
Which one of the following would not adequately protect the woman’s sister?
Placing a notice in accordance with s.27 Trustee Act 1925.
Obtaining a Benjamin Order.
Making a payment into court of the missing beneficiary’s 1/3 share.
Retaining the missing beneficiary’s 1/3 share and delaying the administration of the woman’s estate.
Distributing the estate to the two other children and obtaining insurance to protect against a subsequent claim by the missing beneficiary.
Placing a notice in accordance with s.27 Trustee Act 1925.
Correct. All of the other options are feasible where there is a known but missing beneficiary. The protection afforded by a s.27 Trustee Act 1925 notice is in relation to unknown creditors and beneficiaries, not those who are known about but cannot be located.
Question 1
A woman makes a will in which she appoints her only brother and his son (her nephew) as
her executors. She makes gifts of £5,000 to charity, £10,000 to her best friend, and gives the
rest of her estate to her brother.
The two persons who witnessed the will are the husband of the best friend and the nephew.
Which of the following best describes the position in relation to the woman’s will?
A The will is invalid because the best friend’s husband witnessed the will.
B The will is invalid because the nephew witnessed the will.
C The will is valid but the best friend’s gift will not take effect because her husband
witnessed the will.
D The will is valid but the brother’s appointment as executor fails because he is a
beneficiary.
E The will is valid but the nephew’s appointment as executor fails because he witnessed
the will.
Answer
Option C is correct. A gift in a will fails if a beneficiary or their spouse acts as witness (s 15
Wills Act 1837). The best friend is a beneficiary and her husband acted as a witness.
Option A is wrong as a will is not invalidated if a beneficiary or their spouse acts as witness.
Option B is wrong as a will is not invalidated if an executor is a witness.
Option D is wrong as a gift in a will does not fail by virtue of the fact that the beneficiary is
also the executor.
Option E is wrong as a witness can be an executor.
Question 1
A woman died last week. In her valid will, she appointed her solicitor as her executrix and,
apart from a pecuniary legacy of £25,000 to her adult nephew, she left her estate to be
divided between her brother and sister.
The solicitor predeceased the woman. Everyone else mentioned in the will survives. The
woman’s husband also survived her.
Which of the following best describes who will be entitled to take a grant of
representation and which type of grant is appropriate?
A The nephew has the best right to take a grant of letters of administration with the will
annexed.
B The brother and sister will be entitled to take a grant of letters of administration with
the will annexed.
C The brother and sister will be entitled to take a grant of probate.
D The husband can take a grant of (simple) letters of administration.
E The husband can take a grant of letters of administration with the will annexed.
Answer
Option B is correct.
The grant will be a grant of letters of administration with the will annexed because the
deceased left a will but no executor is able to act. Under NCPR 1987, Rule 20, residuary
beneficiaries (the brother and sister) have the best right to the grant under category (c).
Option A is wrong. The nephew does not have the ‘best right’ because, compared with the
brother and sister, he is lower down the list in Rule 20. He appears in category (e).
Option C is wrong. Only executors appointed in the will can take a grant of probate.
Option D is wrong. A grant of (simple) letters of administration is not appropriate because the
woman did not die intestate; she left a valid will.
Option E is wrong because the husband does not fall into any of the categories of applicant in
Rule 20.
Question 2
A man died three months ago. His estate included a house worth £600,000. The rest of
his assets (comprising chattels, a bank account and small holdings of shares in quoted
companies) are worth £600,000. The inheritance tax (IHT) payable on the estate is £350,000.
The man’s PRs are ready to apply for the grant of representation.
How much IHT will the man’s PRs have to pay before they get the grant?
A None of it, if they elect to pay by instalments.
B None of it, because the deadline for payment is six months after the end of the month
of death.
C £350,000, because the Probate Registry will not issue the grant until they have a receipt
for the payment of IHT.
D Only the IHT on the chattels and bank account if they elect to pay IHT on the house and
shares by instalments.
E £175,000 if they elect to pay the IHT on the house by instalments.
Answer
Option E is correct. The house is instalment option property. IHT on instalment option property
does not have to be paid before the grant if the PRs elect to pay by instalments. IHT on
instalment option property can be paid six months after the end of the month of death.
However the IHT on the other property (the chattels, a bank account and small holdings of
shares in quoted companies) must be paid before the grant because this property does not
attract the instalment option. The non- instalment option property accounts for half the value of
the estate and therefore, half the IHT bill.
Option A is wrong. The instalment option is available only for the land (the house). It does
not apply to the other assets. IHT on the non- instalment option property must be paid before
the grant.
Option B is wrong. IHT on the non- instalment option property must be paid before the grant.
Option C is wrong because, as explained above, IHT on instalment option property can be
paid by 10 annual instalments.
Option D is wrong. The quoted shares do not attract the instalment option because they did
not give the man a controlling interest in the companies
Question 3
A woman died four months ago. In her valid will, she left a legacy of £30,000 to a charity
and the residue of her estate to her husband. She also appointed the husband to be
her executor. Before the woman died, she and her husband were divorced. The woman’s
husband and her adult son survived her. The woman’s estate comprises public company
shares and money in building societies. It is worth £300,000. She made no lifetime gifts and
was not a beneficiary under a trust.
A newly qualified solicitor has put together the following documents to send to the Probate
Registry in order to obtain the grant:
*
The woman’s will and two A4 photocopies
*
A PA1P
*
An IHT400
*
A cheque for the probate court fee.
Are these the right documents to send?
A No, because the application for the grant should be on form PA1A.
B No, because it is an excepted estate and no IHT form is required.
C No, because the will was revoked by the woman’s divorce and she died intestate.
D No, because the application for the grant by a professional has to be online.
E Yes, because the husband should apply for a grant of probate on form PA1P.
Answer
Option B is correct. The divorce means that the husband is treated as though he predeceased.
Therefore, his appointment as executor and the gift of residue to him cannot take effect.
Residue will pass on intestacy to the woman’s son. The legacy to the charity is still valid.
The son should take a grant of letters of administration with the will annexed. The son is
entitled to this grant as the person ‘entitled to … the undisposed of residue’ under NCPR,
Rule 20, category (c). Option B is correct because the woman’s estate appears to satisfy the
requirements for an excepted estate.
Option A is wrong. Form PA1A is not appropriate here. It is used where the deceased left no
will and died totally intestate.
Option C is wrong because (unlike marriage) divorce does not revoke a will. Divorce has the
effect of nullifying appointments of the former spouse as executor and gifts to the former
spouse. The rest of the will stands.
Option D is wrong. Only applications for a grant of probate by professionals have to be online
(subject to some exceptions). Applications for grants of letters of administration with the will
can be made online or by paper hard copy.
Option E is wrong because the divorce has nullified the husband’s appointment as executor.
As there is a will but no executor, the appropriate grant is one of letters of administration with
the will annexed.
Question 1
A man died six months ago. He owned assets in his sole name worth £1,500,000, including
a cottage (worth £300,000), which was subject to a £50,000 mortgage. The man had one
other debt (£10,000 owed to his credit card provider). In his valid will, the man left his
cottage to his niece and the residue of his estate to his nephew. Both gifts are effective. The
will was silent on the burden of inheritance tax (‘IHT’) and all debts, including the mortgage
secured on the cottage.
Which of the following best describes the position in relation to the burden of the IHT
and all the debts?
A The residue will bear the burden of all the debts, including the mortgage, and the IHT
attributable to the cottage.
B The residue will bear the burden of all the debts, including the mortgage, but not the
IHT attributable to the cottage.
C The residue will bear the burden of the credit card debt but not the mortgage and not
the IHT attributable to the cottage.
D The residue will bear the burden of the IHT on the cottage, and the credit card debt but
not the mortgage.
E The residue will bear the burden of the IHT on the cottage but not on any of the debts.
Answer
Option D is correct. The will is silent on the payment of debts and testamentary expenses. The
mortgage is a secured debt and so the beneficiary who is given charged property bears the
burden of the debt (s 35 Administration of Estates Act 1925). All other debts and testamentary
expenses (including the IHT payable on property in the UK which vests in the PRs) are borne
by the residue. The residue therefore bears the burden of the credit card debt and the IHT.
Question 2
A man died six months ago. In his valid will, he left a legacy of £5,000 to a school friend
and the rest of his estate to his son. Nobody knows the current whereabouts of the
school friend or whether he is still alive. The man left nothing to his partner with whom
he had been living for three years before his death. They were not married and had
not formed a civil partnership. The partner is threatening to make a claim under the
Inheritance (Provision for Family and Dependants) Act 1975. The personal representatives
(‘PRs’) obtained the grant of representation three months ago and immediately placed
advertisements complying with s 27 Trustee Act 1925 in the London Gazette and in a
local newspaper. Having received no response, they distributed the whole estate to the
deceased’s son last week.
Which of the following best describes the PRs’ protection from personal liability on
claims by creditors, claimants and beneficiaries?
A The PRs are protected against all possible claims.
B The PRs are protected against possible claims by unknown creditors but not against
possible claims by the school friend and the partner.
C The PRs are protected against possible claims by the school friend and the partner but
not against claims by unknown creditors.
D The PRs are protected against possible claims by unknown creditors and the school
friend, but not against possible claims by the partner.
E The PRs are protected against possible claims by unknown creditors and the partner,
but not against possible claims by the school friend.
Answer
Option B is correct. The PRs have followed the requirements of s 27 Trustee Act 1925, including
waiting more than two months from the placing of the advertisements before distributing
the estate. This protects the PRs against claims by unknown creditors/ beneficiaries. Section
27 does not protect against claims by creditors/ beneficiaries who are known about but
cannot be traced, such as the school friend. To secure protection the PRs should have taken
additional steps regarding the school friend, such as obtaining a Benjamin order. The PRs
are not protected against possible claims under the Inheritance (Provision for Family and
Dependants) Act 1975 because they distributed within six months from the grant (the time limit
for making claims under the Act).
Question 3
A person died with an estate including shares worth £210,000 at the date of death and a
painting worth £480,000 at the date of death. During the period from death to the end of
the tax year the only relevant events were that the personal representatives (‘PRs’) sold the
shares for £225,300 and transferred the painting to the beneficiary entitled to it at a time
when it had risen in value to £510,000. In this period the Capital Gains Tax (‘CGT’) rate
was 20% and the annual exemption was £12,300. Assume that there were no disposal costs
associated with these events.
What is the amount of CGT that the PRs must pay on the estate for the tax year in which
the person died?
A £600.
B £6,600.
C £9,060.
D £3,060.
E £3,540.
Answer
Option A is correct because the sale of the shares makes a chargeable gain of £15,300.
After deducting the annual exemption of £12,300 the £3,000 gain is taxed at 20%. £3,000 x
20% = £600. The transfer of the painting to the beneficiary is not a disposal for CGT purposes
and so no CGT is payable. The beneficiary acquires the painting at its probate value.
Option B is wrong as it includes the increase in value for the transfer.
Option C is wrong as it includes the increase in value for the transfer and also does not
deduct the annual exemption.
Option D is wrong as while it correctly only includes the gain on the sale it does not deduct
the annual exemption.
Option E is wrong as it does not tax the gain on the sale, but taxes the increase in value of
the transfer instead.
Question 1
A sole executor obtained a grant of probate six months ago but has taken no further steps
in the administration of the estate because the executor has had an argument with the
main beneficiary (‘the beneficiary’).
What action, if any, can the beneficiary take to remove the executor?
A The beneficiary should issue a citation.
B The beneficiary should apply to the court to replace the executor.
C The beneficiary can replace the executor by serving a notice on them to retire and
appoint a substitute.
D The only possible recourse is to seek a general administration order.
E Once a PR has obtained the grant, the executor cannot be removed.
Answer
Option B is correct. Under s 50 Administration of Justice Act 1985, the court has a discretion to
replace a PR. It will exercise its discretion if it is necessary for the welfare of the beneficiaries.
Option A is wrong. A citation is not appropriate in this case because the executor has already
obtained a grant.
Option C is wrong. Unlike trustees, it is not possible for beneficiaries to secure the removal of
PRs by serving notice on them.
Option D is wrong. A general administration order does not remove the PR. The PR still carries
out the administration but must seek the court’s consent for every act. Furthermore, it would
not be the beneficiary’s ONLY recourse.
Option E is wrong. A PR can be removed/ replaced by a court order.
Question 2
Personal representatives (‘PRs’) wrongly paid £30,000 to the deceased’s son when this
sum should have been paid to the deceased’s civil partner. The son has spent the £30,000
paying off his overdraft.
Which of the following best describes the action the civil partner could take to recover
the £30,000?
A The civil partner could sue the PRs for breach of trust or pursue a personal action
against the son.
B The civil partner could sue the PRs for breach of fiduciary duty or pursue a personal
action against the son.
C The civil partner could sue the PRs in a devastavit action and pursue a personal action
against the son to recover any balance not obtained from the PRs.
D The civil partner could sue the PRs in a devastavit action and pursue a proprietary
claim against the son.
E The civil partner could sue the PRs and the son in a devastavit action.
Answer
Option C is correct. The PRs have been guilty of maladministration which can be the subject
of a devastavit claim. In Ministry of Health v Simpson [1951] it was held that the correct
beneficiary can recover compensation from the recipient who was wrongly paid. The
compensation will be equal to the amount which the beneficiary cannot recover from the PRs.
Option A is wrong. The correct description of the action against PRs is devastavit.
Option B is wrong. The correct description of the action against PRs is devastavit. It was not a
breach of fiduciary duty because the PRs did not make an unauthorised profit for themselves.
Option D is wrong because a proprietary action will not succeed where the defendant has
dissipated the money, as is the case here.
Option E is wrong. Devastavit is a wasting of assets by the PRs, not by third parties.
Question 3
Personal representatives (‘PRs’) advertised for claimants and waited two months before
distributing the estate to the beneficiaries. They had forgotten about a £3,000 debt which
the deceased owed to a builder.
Can the builder recover the £3,000?
A No, because all the estate has been distributed.
B No, because the PRs are protected due to the adverts.
C No, because PRs are not liable to pay the deceased’s debts.
D Yes, because although the PRs are protected, the builder can recover the sum from the
beneficiaries.
E Yes, because the PRs are personally liable for devastavit.
Answer
Option E is correct. By neglecting to pay the debt, the PRs are guilty of maladministration (or
a breach of duty to pay all the debts) and the creditor can bring a claim for devastavit.
Option A is wrong. In this situation, the PRs are personally liable for breach of duty and will
have to pay the creditor out of their own resources.
Option B is wrong. Under s 27 Trustee Act 1925, the fact that the PRs advertised and waited
two months before distributing the estate only protects them against claims of which they were
unaware. In this case, they were aware of the builder’s claim but overlooked it.
Option C is wrong because PRs are liable to pay the deceased’s debts from the assets in the
estate.
Option D is wrong. The PRs are not protected from liability (as explained above) and the
builder should exhaust their claim against the PRs before seeking a personal remedy against
the beneficiaries (Ministry of Health v Simpson).
A man died leaving a will by which he left all his estate to three trustees to hold on trust for the four children of his best friend. The children are to inherit at the age of 18. Two of the children have reached the age of 18 and have received their share of the trust fund. The other two children are still under the age of 18. The trust fund comprises a portfolio of shares. One of the trustees has just died.
Which of the following best describes whether it is necessary for a replacement trustee to be appointed?
A. A replacement trustee must be appointed because some of the beneficiaries are still under the age of 18.
B. A replacement trustee must be appointed because three trustees were originally appointed and there are now only two trustees.
C. There is no requirement to appoint a replacement trustee because the trust came into effect after the man’s death and not during his lifetime.
D. There is no requirement to appoint a replacement trustee because there is no land in the trust investments.
E. There is no requirement to appoint a new trustee because there are two surviving trustees.
E - There is no requirement to appoint a new trustee because there are two surviving trustees.
