Administration of the will Flashcards
what if B does not want to inherit under the will
post death variation or post death disclaimer
what type of transfers are post death variation and disclaimer
PETs - so chargeable to IHT if B dies within 7 years
how can IHT be avoided on post death variation and disclaimer if B dies within 7 years
signed writing, within 2 years of Ts death, state s142 applies, not for consideration
requirements for B to make a post death variation
B must have capacity to consent or court can consent if it is for their benefit
how is property distributed if B makes a post-death disclaimer
As if B died before T
how to avoid CGT on post death disclaimer and variation
within 2 years of Ts death
what is an affidavit
evidence of validity of the will - a sworn oath in front of a solicitor not representing the PR
types of affidavits
knowledge and approval
plight and condition
due execution
lost will
affidavit of knowledge and approval
when there is doubt about Ts knowledge and approval of content of will. evidence provided by someone who can speak of the facts eg didn’t sign or was illiterate and not adapted for this
affidavit of due execution
no attestation clause or somehow defective or doubtful get evidence from a witness that can establish the will was properly executed
affidavit of plight and condition
when will appears to have been interfered with - made by someone with knowledge of the facts
lost will affidavit
assumed to have been destroyed by T to revoke it but if it was an accident a copy can be sent to registrar with evidence from applicant for grant of probate
which grant is applied for and how is this done - will and executor
use form PAIP for a grant of probate
which grant is applied for and how is this done - will but no executor
use form PAIP to get letters of administration with will annexed
who is executor for letters of administration with will annexed
NCPR 1987 r20 - usually the residue beneficiary
which grant is applied for and how is this done - no will
use form PAIA for simple letters of administration
who is administrator for simple letters of administration
NCPR 1987 r22 - usually main intestacy B
how many executors are needed
one - even if there is land
how many trustees are needed
at least two
how many administrators are needed
one unless there is a minor B or a B with a life interest only then there must be 2 administrators
what authorises an executor to act - how soon can they act
authority is from will - can act immediately from death but some things that they cannot do without grant
what does a grant of probate confirm
the authority to act, title to property, validity of will
what authorises an administrator to act - how soon can they act
the letters of administration gives them authority
it is not retrospective to death so must wait for grant to act
what goes grant of letters of administration confirm
title to property, validity of will
which assets can executor deal with without a grant of probate
chattels- moveable personal property
cash in deceased possession - not in bank
can pay B up to 5k of assets
access money in national savings bank and trustee savings bank but not other banks
can access national savings certificates, premium bonds, money in building societies and friendly societies
assets which don’t pass through PR
joint property - survivorship - with death certificate
insurance policies written in trust
pension benefits - with death certificate
when does the administration period start and end
starts at death and ends when residuary is vested in B
how long does PR hold office
life
what is a devastavit
a breach of PRs duty
what is PRs primary duty
to collect and administer estate
when is PR liable for loss of estate
when there is loss resulting from their breach of duty - not liable for Co-PR breach
are PRs liable for breaches of co-PRs
no
when can court relieve PR of liability for breach of duty
when they acted honestly, reasonably and ought fairly to be excused
can the will excuse PR of breach of duty
yes can exclude this
what if PR fails to pay B or creditor
PR is personally liable
how to ensure there are no unknown Bs
get s27 order
what is a s27 order
Protects PR for liability against unknown Bs
can an unknown B claim anything if there is a s27 order
yes against Bs - not against PR
how to get s27 order
advertise in london gazette, local paper where T owned land and any court requirements. PR must make searches of prudent land buyers, wait 2 months before distributing
how to protect against missing Bs and creditors
keep back some assets
take indemnity from Bs
take insurance but if it falls short PR must add to it
get a benjamin order
what is a benjamin order
court order to distribute on basis that missing B is dead
duties of PR
duty to collect
duty to preserve
duty to act with reasonable care
which assets can be used to pay debts of the estate
any
how do ownership of assets pass to PR
executors - automatically on death
administrators - on grant
can PRs deal with assets that pass independently of the will
no
what are testementary expenses
those incidental to the proper performance of duties of PR
when do you pay back the money loaned to pay IHT if you took a first proceeds undertaking
as soon as money is realised
what if the executor has no capacity
attorney can get grant for their use and benefit. executor who lacks capacity cannot apply for grant
what if the executor is a minor but there are other adult executors
the other adults can apply for grant and reserve power for minor to take grant when 18. minor apply for grant of double probate when 18
grant of double probate
minor applies for this when turning 18 to act alongside other adult executors
what if executor is minor and there are no other executors
parents of minor apply for grant of letters of administration with will annexed. Minor can apply for cessation of grant when 18
can executors renounce their right to take grant
yes - unless they have intermeddled with estate (done PR tasks)
what is executor renounced position
as if they have never been appointed
how to renounce executor position - form
PA15 signed, witnessed and submitted to probate registry
does renouncing executor or administrator role end position as B or trustee
no - would have to disclaim these seperately
max number of executors
4 - can reserve power to others to take out grant later if vacancies arise
why are there two versions of PAIA and PAIP
one for professional representative and one if you don’t have a professional representative
when to use PAIA
no will
When to use PAIP
will - grant of probate or letters of administration with will annexed
max number of administrators
4 - cannot reserve power to others
can you reserve power to take grant to other administrators if there is more than 4
no - can only do this for executors
can administrators renounce postition - form
yes use form PA16
does intermeddling impact an administrators right to renounce position
no - only for executors
administrator can renounce even if they have intermeddled but executor cannot
NCPR 1987 r20
sets out who can apply for letters of administration with will annexed: executor residue B residue B's PR any other B or creditor PR of any other B or Creditor
clearning off
when you explain why you should be allowed to take grant because there is no one in a higher category
can a minor act as an administrator
no - other people in same category should apply instead. if no one else in same category parents apply for minor’s use and benefit
grant is limited until they reach 18
max number of administrators
4 - cannot reserve grant for later vacancies unlike executors
how to renounce administrator position - form
PA16
does intermeddling cause administrator to lose right to renounce
no (only executor)
order of people able to take grant of simple letters of admin when totally intestate
NCPR 1987 r22 - same as Bs on intestacy
must have a beneficial interest in estate by virtue of intestacy rules
NCPR 1987 r22
order of people able to take grant of simple letters of admin when totally intestate
if there are several people entitled to the same degree to apply for grant of administration can only one apply for grant? do they need to notify each other?
yes - they don’t need to notify the other
what is a solvent estate
theres sufficient funds to pay all debts and liabiltiies even if theres nothing left for B
who is responsible for paying a secured debt
B who receives the assets unless there is a specific reference to that specific secured debt in will - not enough just to allocate money for debts generally
order in which assets must be applied to pay debts in solvent estate
anything not disposed of it will residue money for debts money charged to debts (remainder goes to b) pencunary gifts funds property gifts
what is an insolvent estate
not enough money to pay debts and liabilties
in what order are liabilties paid in an insolvent estate
secured creditors
funeral and testementary expenses
unsecured creditors
what if you administer an insolvent estate as a solvent one
this is a breach of PR duty so if unsure administer as if it is insolvent
how to transfer house to B
assent - written, signed but not deed
send asset to land registry
how to transfer shares to B
Stock transfer form
is B entitled to income as it arises
no - must wait until asset is vested in them
but liable for the IT from death
who covers the cost of transfering assets to B
B - so B must refund PR
how long does PR have to pay pecuniary legacies
no need to pay them before the end of 1 year after death
but after 1 year interest is due to B
unless will provides for it to be paid sooner or due to creditor or minor B
what is the final task of a PR
to produce estate accounts for residue B
what do estate accounts show
all assets of the estate, payment of debts and balance remaining.
what effect do the estate accounts have
B signs it to show approval which releases PR from liability unless fraud or failure to disclose assets
when does PR need to produce separate estate accounts
if there is a life interest or minority interest
what must PR do immediately following death regarding IT and CGT
account for IT and CGT from 6 April - death
can use all reliefs usually allowed
take into account when calculating IHT
who pays IT on income paid to estate during administration
PRs
don’t get usual reliefs
can deduct interest on IHT loan
IT rates for PR
7.5% dividends
20% other property
when is CGT payable by PR
not when assets are transferred to B
when PR sells assets to pay liabilities
rate of CGT for PRS
20%
or 28% for residential property
what reliefs can be applies to CGT
annual exemption for year of death 12,300
plus annual exemption for 2 years following death if administration lasts that long
what can be deducted from gain when calculating CGT
acquisition costs, incidental costs of disposal and cost of valuing estate
how can a loss for CGT be relieved
set against gains from other sales by PR in same tax year or any future tax year in administration period
any loss unrelieved at end of administration cannot be transferred to B
how and when does PR account for IT and CGT
each year
if not complex estate informal payment without return
if complex estate formal return
when is an estate complex
estate worth more than 2.5m, tax due for whole of administration period exceeds 10k or value of assets sold in tax year exceeds 500k
does B of will have an equitable interest
no - PR has equitable and legal interest until asset vested in B
does B have right to PRs reasons
no - but can apply to court
how soon does PR have to distribute assets
not bound to distribute before end of executors year
executors year
1 year from death
can B inspect accounts and inventory etc
yes PR must keep accurate records and B or anyone interested in estate can inspect
who can lodge a caveat
family
what does a caveat do
prevents the issue of a grant
requirements to lodge a caveat
just cause
effect of caveat
no grant can be issued until it is removed or ceases to be effective
how long does a caveat last
6 months but can be extended
why lodge a caveat
doubt eg think executor lacks capacity
what to do if there is a caveat
applicant for grant issues a warning to caveator who must make interest known in 8 days or applicant can remove caveat
what is a citation
a way of forcing the party with right to grant to act
who can apply for a citation
B applies to probate registry
types of citation
take probate
propound will
accept or refuse grant
citation of take probate
if PR lost right to renounce by intermeddling but hasn’t applied for grant - if they still don’t can get letters with will annexed by person entitled under NCPR r20
citation to propound
if there is a will that would deminish entitlement under other will or intestacy - see if other Bs come forward, if they don’t can continue
citation to accept or refuse grant
clear off people with prior right to grant who have not applied - if they don’t take steps to get grant then citor can get one
better option to citation of probate
apply to probate registry for an order passing over that person in favour of someone else - if they don’t want to do it they will probably do a bad job so no point forcing them
who can bring administration proceedings
anyone interested in the estate
2 categories of administration proceedings
applications limited to a particular issue (eg PR needs guidance on wording)
application for general administration order where court supervises the PR or replaces them
what is a general administration order
court supervises PR and PR cannot exercise powers without courts permission or court may appoint a judicial trustee to act as PR with another person or alone
who can bring a devastavit claim and why would they do this
B can claim when PR has caused loss to the estate through breach of duty
what if a devastavit claim is successful
PR liable to pay out of own assets
when would B bring a devastavit claim
misuse of assets (takes for self)
maladministration of assets (not in accordance with will)
negligence
defences to devastavit claim
s61 - honestly and reasonable and ought fairly be execused
exclusion clause in will
Bs consented
S27 order, benjamin order, insurance or indemnity
limitation period
what is the limitation period for an underpaid B to claim their share
12 years from date on which right to receive estate accrued
no time limit if fraud or PR took property for themselves
can the court remove a PR
yes - but must be at least 1
can a court replace a PR
yes
what will the court consider when replacing or removing a PR
welfare of B
can a cause of action continue against T after death
yes would be against PR
what happens to Ts liability under contracts
PR must perform these to extent of deceased’s assets
6 years limitation
remedy for B if PR distributes assets to someone who isn’t entitled
can follow assets to recipent and either bring proprietary claim for assets or replacements (unless bona fide purchaser) or bring personal claim for compensation against recipient as long as all remedies against PR are exhausted
time limitation period for B to bring a proprietary or personal claim against recipient of assets who should not have received the assets
12 years
