Administration: the role of a PR, powers, duties and liabilities Flashcards
What is a PR appointed by will known as?
Executor.
What is a PR appointed by statute known as?
Administrator.
What is the grant of representation?
An order of the High Court establishing the authority of the PRs to act and the validity of the deceased’s will, or that the deceased died intestate.
What is the role of a PR?
S25 AEA 1925: a PR must ‘collect and get in the real and personal estate of the deceased and administer it according to law’.
The role of the PR is to administer the estate of a deceased. They have a statutory duty to collect in the deceased’s assets, ensure the deceased’s debts are paid and outstanding tax liabilities are met, and then to distribute the assets to the beneficiaries who are entitled.
What are the pre-grant duties of a PR?
-Common law duty to dispose of the deceased’s body: Williams v Williams (1882)
-Statutory duty to provide information about the estate to HMRC and pay IHT due. This is done by completing Form IHT 400.
These duties must be complied with before the grant of representation is obtained.
What is the PRs duty of due diligence?
PRs have a general duty to carry out the administration with due diligence and within a reasonable time.
When should PRs complete the administration?
PRs should complete the administration within 12 months of the date of death known as the executor’s year (S44 AEA). If longer, the PRs are required to justify any delay.
Can a joint PR act alone?
If more than one PR is appointed then, they are required to make decisions together and should exercise discretionary powers unanimously.
However, when exercising a lawful power to sell or transfer an estate asset during the administration, a jointly appointed PR will usually have authority to act alone.
What may a claim against a PR be based on?
-maladministration e.g. incorrectly administering the estate
-misuse of assets e.g. making personal use of the estate assets
-negligence e.g. failing to invest or unreasonable delays
-breach of fiduciary duty e.g. breach of no conflict and no profit rules
How may a PR be removed?
A PR who fails to carry out their duties properly may be effectively removed from the role by:
-A Court order under s50 AJA 1950 appointing a replacement PR
-An administration action, where the Court would take over the administration itself
Outline how PRs may obtain protection from personal liability by seeking Court directions.
PRs can seek Court guidance if they foresee difficulties in the administration. Administration proceedings could take the form of an administration application or specific relief. This can be very expensive and time consuming.
Outline how PRs may obtain protection from personal liability by making a S48 AJA 1985 application.
PRs may instead make an application under this section if there is a question over the construction of the will. A written legal opinion will be provided.
Outline how PRs may obtain protection from personal liability by publishing a S27 TA 2005 notice.
Trustees may publish a notice of their intention to distribute to know beneficiaries two months after the date of the advertisement. The notice must be placed in:
i) The London Gazette
ii) Any newspaper circulating the area in which any land held on trust is situated
iii) Any other newspaper which is appropriate
This does not protect they PRs if they distribute assets ignoring the claim of a known but missing beneficiary creditor.
Outline how PRs may obtain protection from personal liability by seeking a Benjamin Order.
In the case of known but missing beneficiaries, PRs may seek a Benjamin Order permitting them to distribute the estate on the basis that the missing beneficiaries have died/different assumption.
The order relieves the PRs from personal liability if they administer an estate in accordance with the Court order and the assumption turns out to be incorrect.
What is the Presumption of Death Act 2013?
The PRs may make an application under this act for a Court order declaring that a person thought to have died, or not known to have been alive, for 7 years or more has died.
