Administration Pre-Grant Flashcards
What is administration?
Legal process for managing distribution of estate when a person dies, paying debts, taxes, estate expenses
What is a personal representative?
Someone permitted to administer the deceased’s estate
What do you call a PR appointed by will?
Executor
What do you call a PR appointed by statute?
Administrator
What is a grant of representation?
It is a court order confirming the authority of the PRs to act, and to confirm the validity of the deceased’s will or that the deceased died intestate
How is a PRs power limited?
PR’s power is conferred by the grant and limited to the assets passing under the will or intestacy i.e. succession estate
What is the role of the PR?
Statutory duty to collect deceased’s assets, ensure debts paid, taxes met, and distribute to all beneficiaries
PR can be a beneficiary of the estate
PR is a fiduciary role
All duties must be performed in accordance with a duty of care - same as for trustees
How are PRs appointed?
Will - executor
Statute - NCPR 1987
When are PRs automatically trustees of a trust?
Intestacy
Statutory trust arises under an intestacy
PRs are the trustees of a trust held on behalf of a minor beneficiary
What is the role of a solicitor in pre-grant administration?
Solicitor can be instructed by PRs for advice on administration
Solicitor has been appointed as executor under deceased’s will
Solicitor has been instructed to act on behalf of a party to a contentious probate matter
When is a grant of probate required?
Deceased left a valid will
Will appointed executors
At least one of the executors appointed is going to act
When is a Grant of Letters of Administration (with will) required?
Deceased left a will
But appoints no executors who are willing / able to act
Administrators are appointed under NCPR Rule 20
When is a Grant of letters of administration - no will - required?
Deceased died intestate
Appointed under NCPR Rule 22
Which assets can be released without a grant?
Assets which can be distributed under Administration of Estates (Small Payments) Act 1965
Personal household possessions (chattels)
Cash
Assets which can be released without a grant: What assets are covered by AOE (Small Payments) Act?
National Savings (including bank accounts, savings certificates, premium bonds)
Friendly Society and Industrial and Provident Society deposit accounts
Arrears of salary and wages
Pensions where deceased was in the police, fire authority, air force or army
Building society accounts
Upper limit of £5k per asset - if above, whole asset will need the grant to be released.
What steps must be completed before the grant?
Death certificate / funeral
Secure estate assets
Locate will / codicil
Basis of distribution and identify beneficiaries
Schedule of assets and lifetime transfers
No strict chronological order
Is cost of funeral redeemable from the estate?
Yes - payable from estate fund as long as reasonable
What must PRs consider when securing the estate?
Duty to preserve the value of the estate
Must ensure items / documents are safe
Security of digital assets / closure of social media accounts
What should PRs consider when they locate will or codicil?
Need original will at start of the administration process
Copy is not sufficient to get grant
Check will is valid
Make sure codicil makes sense when read with the will
What should PRs consider if they think an individual died intestate?
Evidence will was made but cannot be located - PRs need to find out what happened
Revoked or lost? If lost - steps should be taken to reconstruct will
Commercial organisations charge a fee for searching against national wills register [completely optional]
Once grant issued will is a public document
What should PRs consider when creating a schedule of assets and lifetime transfers?
PRs must compile an accurate list of the deceased’s assets and liabilities to:
Identify and value estate assets
Identify the deceased’s creditors (to whom PRs also owe a duty)
Work out steps needed to manage distribution of assets
Calculate IHT due
Establish if estate is solvent
Estimate what each beneficiary is entitled to
Once schedule of assets and liabilities has been prepared how should PRs approach contacting organisations to acquire assets?
Bank accounts: PRs should request from bank a summary of account balance plus interest
Joint accounts: establish proportion owned by deceased (50/50 presumption but check)
Low value chattels – ok to estimate, probate value will be less than cost to replace
Single items worth more than £500: formal probate valuation should be obtained; companies will do this, costs are payable from estate funds
Quoted shares: special rules for this: taking lower of two prices on Stock Exchange Daily List and adding ¼ of the difference between the higher and the lower value
Private shares / partnership interests / sole trader business: specialist valuation instructed
Financial investments otherwise: broker will provide a list of shareholdings and date of death values
Land: PRs will instruct estate agents to prepare a valuation
Common that more than one instructed and average value used to avoid HMRC issues
Jointly owned; value of deceased’s share should be established
PR may need to see Land Registry copies to establish basis on which joint property owned and identity of co-owners
Details of debts and liabilities: credit card statements, loan documents, bills, etc
Lifetime transfers: PRs must check nature of any transfer, date made, amount or value, identity of donee
When will an executor be considered unable to act?
If they have pre-deceased the testator – or survived, but died before taking out the grant
Are a minor: appointment remains valid and the power can be reserved to the minor who when they turn 18 can make an application later if administration remains incomplete
Lack capacity
Are testator’s former spouse / CP and divorce took place after will was made – S18A/C Wills Act 1837 - Unless the will expressly overrides the effect of this
What happens if an executor appointed by a valid will is a minor?
Appointment remains valid and power can be reserved to the minor who can apply to be executor when they turn 18 is administration is incomplete.
What is S18A/C Wills Act and how can it be ignored?
Says that a testator’s former spouse / CP cannot be an executor if they divorced after the will was made
Ignored if will expressly overrides the effect of this
How many people can be on the grant?
Four - if more than four appointed, they should decide who is going to take out the grant
What is an application for a grant of double probate?
When power is reserved to remaining executors who are not on the initial grant - if a vacancy arises and administration remains incomplete, can apply.
What happens if a proving PR dies?
If there is a surviving PR - can continue with administration
If there is no PR left - either chain of representation, or grant of letters of administration de bonis non issued.
When does the chain of representation apply?
When the last surviving executor dies having appointed an executor of their own estate, and this person takes out the grant probate for the dead executor’s estate
The second executor becomes executor of the original testator’s estate, as well as for the original executor. No additional grant is required.
Does not operate where administrators are acting.
What are letters of administration de bonis non?
A grant of goods not yet administered, authorising a new PR to deal with the remaining estate
Requirements:
Administration is incomplete
No remaining personal representatives
There has been a previous grant of representation
Who is entitled to the grant on a letters of administration with will? List in order
NCPR Rule 20 applies here:
Executor
Trustee of the residuary estate
Any residuary beneficiary (whether taking absolutely or for life) or if there is a partial intestacy, a beneficiary of the estate under intestacy
PRs of anyone other than a trustee or life tenant of the residue
Any other beneficiary or a creditor
PRs of any beneficiary or creditor
What rules apply to applications under NCPR Rule 20?
A person in a lower category cannot apply if someone in a higher category is able and willing to act as administrator
Those in the same category have an equal right to apply
Must clear off those in higher categories, but no need for same category.
What happens if one of two residuary beneficiaries applies for the grant?
Applicant must clear off:
- No trustee of the residue is appointed
- Confirming sole appointed executor has pre-deceased
- No need to clear of any fellow residuary beneficiaries.
List in order the priority to the administratorship of estate under NCPR Rule 22
Surviving spouse or civil partner
Children of the deceased, or their descendants (if a child predeceased)
Parents of the deceased
Siblings of the whole blood, or their descendants (if a sibling predeceased)
Siblings of the half blood, or their descendants
Grandparents
Uncles and aunts of the whole blood, or their descendants
Uncles and aunts of the half blood, or their descendants
Bona vacantia
What conditions apply to eligibility under the NCPR rule 22?
For all categories, you must already be beneficially entitled under the intestacy rules
Must clear off anyone with a better right to apply
Spouse must survive deceased by 28 days
PR of any applicant who survived the deceased but died before taking a grant may apply on their behalf although an application by a living person within the same category is preferred
When is an administrator unable to act?
Lacking capacity
Minor - can get someone to apply on your behalf, but application by an adult with equal entitlement would be given priority
How many administrators are needed?
Only one, unless there are minor or life interests in which case two are needed
Max of four
Can be from different categories of NCPR 22
What can executors do if they are unwilling to act?
Renunciation
Reserving power
Appointing an attorney
How can an executor renunciate their role?
Signing a form of renunciation
Those who apply for grant will submit form to Probate Registry as evidence of why an executor appointed by will is not making the application.
Renunciation noted on the grant when it is issued. Final
When is an executor unable to renunciate a grant?
Once they have intermeddled
What constitutes intermeddling?
Taking steps to indicate you have accepted appointment and are fulfilling your duty to administer estate
NOT arranging a funeral, taking steps to secure estate assets
If you have intermeddled, can you still reserve power as an executor?
Yes
How can an executor delegate functions?
Power given by an executor to an attorney called power of attorney
Can be delegated for a maximum of 12 months
Can be renewed with notice given to the other executors
Power of attorney must be provided to the Probate Registry as part of the application
What happens if no executors are willing to act?
No grant issues
Administrator appointed under NCPR 20
What options are available to administrators who are unwilling to act under NCPR 20 / 22?
Renounce
Appoint an attorney
Cannot reserve powers
What happens if an administrator renunciates?
This is final
Form signed and submitted to the probate registry
Can renounce even if has intermeddled.
Executor who renounces has not automatically renounced as administrator - may need to do so on both fronts.
How can an administrator appoint a power of attorney?
Power can be given by the administrator to the attorney
After administrator has been appointed: PR may delegate their functions to an attorney for maximum of 12 months (can be renewed if needed), with notice given to other administrators once appointed the attorney can carry out administrative steps on behalf of the donor
Before a grant has been obtained: applicant is delegating the power to apply for a grant, permitted under Rule 33 NCPR
What can be done if an eligible PR both refuses to act and refuses to renounce?
Possible to obtain a court direction to:
Require a person to take out a grant
Remove their right to apply
Authorise another person to take on the administration
What is the grant?
A court order confirming the authority of those named in it to administer the estate
How can you submit an application to the Probate Registry?
Complete and post a paper application form
Submit an online application form via HMCTS service
When MUST an application be made online?
Most grants of probate
When is an online application possible, but not mandatory?
Some simple applications under NCPR 20 and 22 - sole applicants, no minority or life interests
When is a paper application mandatory?
Non-standard grants
More complex applications under NCPR 20 / 22
When must paper form PA1A be used?
If the deceased did not leave a valid will
When should paper form PA1P be used?
When the deceased left a valid will
What should any application to the probate registry include?
Identity of deceased and applicants
Justify type of grant requested and their entitlement to act as PR
Information about value and IHT status of the estate
When an executor is applying for a Grant of probate, what should they include?
Original testamentary documents (will / codicil)
Explanations of why executors name is different to any name in the will
If any executor named is not applying - evidence needed e.g. death certificate, form of renunciation, etc.
When an administrator is applying for a grant under NCPR 20, what should they include?
Which category of application they fall within
Clear off anyone with a better right
Say if anyone is a minor / any life interest
When an administrator is applying for a grant under NCPR 22, what should they include?
Familial relationship to dead
Confirm they are beneficially entitled
Clear off anyone with a better right to apply
If any beneficiary is a minor
Should IHT be paid before grant of probate?
Yes
Above what threshold is a fee payable to the Probate Registry?
£5,000
How will the probate registry provide the grant?
Number of sealed copies as requested by the PRs - number will depend on the number of assets in the estate.
When applying for grant - name 2 formalities that are always needed, and 5 that are required for some applications
Always: Online application / PA1A / PA1P and application fee
Sometimes: original will / codicil, form of renunciation, affidavit evidence, power of attorney, certified copy of death certificate
When is an affidavit required when applying for the grant?
If there is something about a testamentary document that renders its validity uncertain
What are the legal requirements for an affidavit?
Authenticating statement, ‘Jurat’ must be:
Signed by all parties and dated
Completed and signed by the person witnessing (solicitor or commissioner for oaths) + name, address qualification stated
Must follow immediately on from the text and not on a separate page
When is an affidavit of due execution needed?
Doubts about the following:
- S9 Wills Act validity
- Knowledge and approval
- Date of will
When is an affidavit of alterations required?
When there are problems with the physical conditions of the will
What must an affidavit include if the original will is missing?
Evidence will / codicil existed / facts which rebut the presumption that the missing will was revoked during the testator’s lifetime
Confirmation will / codicil was executed
That document accurately records testamentary wishes of the deceased
