Chapter 12: Administrative powers of personal representatives

Question 1

Do PRs have the power to sell, mortgage or lease property?

Answer 1

PRs can sell, mortgage or lease property in order to pay for administration expenses (tax, funeral costs, debts, pecuniary legacies)

Question 2

What is the power to appropriate?

Answer 2

Use of an asset to satisfy a legacy or interest in the estate provided that the beneficiary consents

Unless will states otherwise and no specific beneficiary is affected

Question 3

Can PR make an appropriation in their own favour to satisfy a pecuniary legacy?

Answer 3

No, unless the asset is cash or the equivalent of cash (e.g. government stocks or quoted shares) and the will provides permission to do so

Question 4

Can a minor give valid receipt of monies or assets transferred to them?

Answer 4

No

Question 5

If a minor has a vested interest in property and monies or assets have been transferred to them, what should the PRs do?

Answer 5

Appoint a trustee for the minor

Question 6

Who can give valid receipt of monies or assets transferred to a minor?

Answer 6

Anyone with parental responsibility for the minor can give valid receipt

Question 7

Do personal representatives have a power to insure trust property?

Answer 7

Yes

Question 8

Can PRs delegate functions to agents?

Answer 8

PRs may delegate duties to agents unless will provides otherwise

Question 9

If a function has been delegated to an agent, will PRs be liable for their actions?

Answer 9

PRs will only be liable if they failed to adhere to their statutory duty of care in appointing or reviewing the agent

Question 10

Can PRs indemnify themselves?

Answer 10

Yes, PRs can reimburse themselves for all properly incurred expenses

Question 11

Do PRs have a statutory power to continue carrying out the deceased’s sole trade business?

Answer 11

• Generally, PRs have no authority to carry on the deceased’s sole trade unless they do so to sell business as a going concern
• Will may contain express provision allowing PRs to run business as going concern

Question 12

Do PRs have a power to invest?

Answer 12

PRs are able to invest in almost anything (save for purchase of land abroad and the purchase of an interest in land with someone else e.g. beneficiary)

Question 13

What is the standard investment criteria?

Answer 13

1. Investment must be suitable
2. Investment should be diversified

PR may be liable if they fail to ensure criteria met

Question 14

If an estate includes a gift to a minor and the gift includes the right of the minor to receive income, can the PRs apply the income for maintenance, education or the benefit of the minor?

Answer 14

Yes and this right applies whether the interest is vested or contingent. Otherwise PRs must accumulate the income until the minor reaches 18

Question 15

Once a minor reaches 18, what will happen to any accumulated income?

Answer 15

• It will normally be added to capital.
• If there is a contigency, income will be paid until contingency satisfied

Question 16

Can a trustee advance capital to a beneficiary?

Answer 16

Yes, but only if they have a vested or contingent interest in capital. Anyone with a prior life interest in funds must give consent

Question 17

If an advance is made on a contingent gift and the contingency fails, does the beneficiary have an obligation to pay back the advance?

Answer 17

No

Question 18

Can a sole PR give valid receipt of the proceeds of sale of land?

Answer 18

Yes

Question 19

If there are several trustees, can just one give valid receipt of land?

Answer 19

No, all must join for the transfer of land and shares in a company