Administration: Preliminary Steps Flashcards
What is the first formal legal step in administering a deceased person’s estate?
A. Applying for a grant of representation
B. Distributing personal belongings
C. Paying inheritance tax
D. Reading the will to the family
A. Applying for a grant of representation
Explanation: The grant is the legal authority that allows the personal representatives to collect and manage estate assets.
What document is essential for notifying institutions about the death of an individual?
A. Copy of the will
B. ID of the deceased
C. Death certificate
D. Grant of representation
C. Death certificate
Explanation: A death certificate is standard evidence of death and is required by most banks and institutions before they take any action.
Who is legally responsible for preserving the estate assets after death?
A. The personal representatives
B. The deceased’s next of kin
C. The main beneficiary
D. The funeral director
A. The personal representatives
Explanation: PRs have a legal duty to preserve the value of estate assets and can be held personally liable if they fail to do so.
Which assets usually do NOT require a formal valuation for probate?
A. Jointly owned land
B. Private company shares
C. Chattels under £500
D. Quoted stocks
C. Chattels under £500
Explanation: Low-value items (chattels under £500) can be estimated without formal valuation for probate purposes.
Which type of property passes outside of the estate under survivorship?
A. Tenancy in common
B. Sole ownership property
C. Trust-held property
D. Joint tenancy property
D. Joint tenancy property
Explanation: Joint tenancy property passes automatically to the surviving co-owner under the right of survivorship and does not form part of the estate.
Why must the PRs check the will early in the process?
A. To check for validity and instructions
B. To estimate funeral costs
C. To calculate inheritance tax
D. To notify the beneficiaries
A. To check for validity and instructions
Explanation: PRs must ensure the will is valid and understand the deceased’s intentions for estate distribution.
What is the effect of the grant of representation?
A. It passes ownership of land to the beneficiaries
B. It authorises the PRs to administer the estate
C. It is only for intestate estates
D. It acts as the death certificate
B. It authorises the PRs to administer the estate
Explanation: The grant gives PRs legal authority to manage the deceased’s estate, collect assets, and pay debts.
Who typically arranges the funeral?
A. The solicitor
B. The government
C. The personal representatives
D. The family
D. The family
Explanation: The family usually handles funeral arrangements, although PRs may do so if necessary.
What happens if there is no will?
A. The estate passes to the government
B. The estate is distributed under the intestacy rules
C. The court selects the executor
D. All assets pass to the eldest child
B. The estate is distributed under the intestacy rules
Explanation: If no will exists, the estate is distributed according to statutory rules of intestacy.
What is used to value quoted shares for probate?
A. Purchase price
B. Average of opening and closing values
C. Mid-market value
D. Quarter-up method from the daily list
D. Quarter-up method from the daily list
Explanation: Quoted shares are valued using the quarter-up method: low price + ¼ of the difference between high and low.
Which of the following debts would NOT reduce the estate for IHT purposes?
A. Loan to buy excluded assets
B. Utility bills
C. Unpaid credit card bill
D. Mortgage on a buy-to-let
A. Loan to buy excluded assets
Explanation: Loans used to acquire excluded assets (e.g. exempt from IHT) will not reduce the IHT value of the estate.
Why is a schedule of assets and liabilities needed?
A. To calculate funeral costs
B. To avoid paying debts
C. To apply for a grant and calculate IHT
D. To identify trustees
C. To apply for a grant and calculate IHT
Explanation: The PRs need a full breakdown of estate assets and debts to calculate IHT and apply for the grant.
