Administration: PR Liability & Protection Flashcards
What is the legal term for a claim against a PR for mismanagement of estate assets?
A. Devastavit
B. Breach of trust
C. Misapplication
D. Misfeasance
A. Devastavit
Explanation: A devastavit is a claim brought when a PR mismanages or wastes estate assets, causing loss to creditors or beneficiaries.
What notice can PRs publish to protect themselves from liability to unknown creditors or beneficiaries?
A. Trustee advertisement
B. s27 Trustee Act 1925 notice
C. Executor clearance form
D. Legal indemnity notice
B. s27 Trustee Act 1925 notice
Explanation: A properly published s27 notice protects PRs from claims by unknown parties after distribution.
A PR pays themselves for time spent administering the estate, without authority. What duty have they likely breached?
A. Duty of confidentiality
B. Duty to invest
C. Fiduciary duty not to profit
D. Duty of impartiality
C. Fiduciary duty not to profit
Explanation: Unless authorised by will or co-PRs, PRs must not profit from their position. Unauthorised payments breach this duty.
A PR is unsure how to interpret an ambiguous clause in the will. What is the most cost-effective protective step?
A. Apply under s48 AJA 1985 for court-approved opinion
B. Apply for full administration proceedings
C. Take out indemnity insurance
D. Publish a s27 notice
A. Apply under s48 AJA 1985 for court-approved opinion
Explanation: s48 allows PRs to rely on a qualified legal opinion, saving cost and time compared to full court proceedings.
A PR distributes the estate without checking for missing beneficiaries and is later sued. Which method could have helped?
A. Payment into court
B. Benjamin Order
C. s27 notice
D. Legal statement of truth
C. Benjamin Order
Explanation: A Benjamin Order protects PRs when distributing based on the assumption that a missing beneficiary is dead.
A PR administers the estate with honesty and care, but a minor technical breach occurs. What could protect them from liability?
A. Application under s61 Trustee Act 1925
B. Renunciation
C. Indemnity from beneficiary
D. s27 TA 1925 notice
A. Application under s61 Trustee Act 1925
Explanation: s61 allows the court to relieve a PR from liability if they acted honestly, reasonably, and fairly.
A PR knows of a missing beneficiary. Which of the following protections does not apply?
A. Benjamin Order
B. Indemnity from known beneficiaries
C. Insurance
D. s27 TA 1925 notice
D. s27 TA 1925 notice
Explanation: s27 protects against unknown claims. For known missing beneficiaries, a Benjamin Order or insurance may be needed.
PRs suspect a missing relative may be dead after 10 years. What statutory route provides certainty of death?
A. s61 Trustee Act
B. Benjamin Order
C. Presumption of Death Act 2013
D. Trustee Exemption Clause
C. Presumption of Death Act 2013
Explanation: This Act allows a court to declare a person legally dead if not seen/heard from in 7+ years.
Which of the following would not protect a PR personally if they ignore a known claimant?
A. s27 notice
B. Benjamin Order
C. Insurance
D. Payment into court
A. s27 notice
Explanation: s27 only protects PRs from unknown claims. Ignoring a known creditor/beneficiary can still result in liability.
What must PRs do before the court will grant a Benjamin Order?
A. Obtain insurance
B. Demonstrate full enquiry into the missing person’s whereabouts
C. Seek indemnities from all other beneficiaries
D. Renounce probate
B. Demonstrate full enquiry into the missing person’s whereabouts
Explanation: The PR must show reasonable attempts were made to trace the missing person before a Benjamin Order is granted.
A PR is also a residuary beneficiary and receives too much under a mistaken distribution. What is their position?
A. They are protected by s27
B. They can keep the excess as PR
C. They may be sued in their capacity as a beneficiary
D. They must repay only if they acted dishonestly
C. They may be sued in their capacity as a beneficiary
Explanation: s27 protects PRs, but overpaid beneficiaries remain liable to repay even if they are also PRs.
Which of the following is a clause in a will that limits a PR’s liability for unintentional breaches?
A. Renunciation clause
B. Indemnity clause
C. Executor override provision
D. Exemption clause
D. Exemption clause
Explanation: An exemption clause in a will protects PRs (often lay PRs) from liability for negligence, excluding fraud or dishonesty.