FLK Wills Flashcards
What is the order of priority for entitlement to grant for simple letters of administration?
NCPR s22
a) Surviving spouse or civil partner,
b) Children of the deceased or their issue if they are dead,
c) Deceased’s parents,
d) Deceased’s siblings of whole blood, or their issue if they are dead,
e) Deceased’s siblings of half blood, or their issue if they are dead,
f) Deceased’s grandparents,
g) Deceased’s uncle and aunts of whole blood, or their issue if they are dead,
h) Deceased’s uncle and aunts of half blood, or their issue if they are dead,
I) Treasury solicitor (if Crown is claiming under bon vacantia),
j) Creditor of the deceased.
What is the order of priority for an application for grant of letters of administration with will annexed?
a) Executor, or
b) Trustee of the residuary estate, or
c) Any other residuary beneficiary under the will or anyone entitled to a share of the residue under the intestacy rules or if none,
d) The PRs of the residuary beneficiary (in c) but not the life tenant of the residue, or if none,
e) Any other beneficiary or creditor, of if none,
f) Any PRs of the beneficiary or creditor (in e)
What is the order of priority for intestacy if both spouse and issue are deceased?
a) Issue on statutory trusts, but if none,
b) Parents, equally if both alive, but if none,
c) Brothers and sisters of whole blood on the statutory trusts, but if none,
d) Brothers and sisters of half blood on the statutory trusts, but if none,
e) Grandparents, equally if more than one, but if none,
f) Uncles and aunts of whole blood on the statutory trusts, but if none,
g) Uncles and aunts of half blood on the statutory trusts, but if none,
h) The Crown (bon vacantia)
What business property qualifies for 100% relief?
A business or an interest in a business (including a partnership share) and company shares that are not listed on a recognised stock exchange i.e. private company.
AND
The assets must have been owned by the transferor for a period of two years.
What business property qualifies for 50% relief?
a. Company shares listed on a recognised stock exchange where the testator had voting control immediately before death and
b. Land, buildings, machinery or plant owned by the transferor personally but used for building purposes (by a partnership of which the transferor is a member or a company whether quoted or unquoted of which the transfer has voting control).
Voting control means ability to exercise over 50% of votes in all resolutions. Voting control can be met by considering the combined shareholding of the spouse and the deceased. If it is over 50% then their combined share has voting control.
AND
The assets must have been owned by the transferor for a period of two years.
What is a citation?
A citation is a method of forcing a party with a right to the grant to act.
Can an IPFDA claim be made against someone who is domiciled outside of England and Wales?
No
What is the deadline for making an IPFDA claim?
6 months from issue of the grant
If there is a cause of action against the deceased, do the PRs take on the cause of action? If so, what is the limitation period?
Yes because PRs take on all of the debts and liabilities of the deceased.
PRs must also perform the deceased’s contracts.
They will only be liable to the extent of the deceased’s assets.
The limitation period is six years.
What is the time limit for a proprietary or a personal claim against a PR who has distributed assets to someone who is not entitled to them?
12 years for both
Who can make applications to the court to remove or replace PRs?
The PR themselves or the beneficiaries.
However, the court must ensure that there is at least one PR left.
The main consideration for the court is the welfare for beneficiaries.
What are the defences to claim of devastivit?
- The court has discretion to totally or partially relieve a a PR of personal liability if they acted honestly and reasonably and ought fairly to be excused for devastivit and for omitting to obtain the directions of the court in the matter.
- Exclusion clause in the will.
- Acquiescence of beneficiaries. If an adult beneficiary who has full knowledge of the facts has consented to the PRs breach, they cannot succeed in a claim against the PR.
- PR will be protected from claims from unknown beneficiaries if they placed advertisements and followed procedures for advertising (s27).
- PRs will be protected from claims from missing beneficiaries if they have a Benjamin order, insurance or indemnity.
- But s27 does not protect from IPFDA provisions so should wait 6 months to take out the grant.
- Limitation. The time limit for an unpaid or underpaid beneficiary to bring a claim is 12 years running from the date on which the right to receive the estate accrued. There is no time limit for fraudulent breaches or where PR has taken property from estate for their own use.
What is the consequence if the PRs are found to have breached their fiduciary duty?
The transaction is voidable by the beneficiaries within a reasonable time. They must account to the estate for any unauthorised profit (whether or not the estate has actually suffered any loss).
Can profits that would ordinary be a breach of fiduciary duty be authorised and by whom?
Wills
- Profits may be authorised by a provision in the deceased’s will,
- A court order or
- The consent of all the beneficiaries who must be aged 18 or over.
What is the deadline for executors and administrators to distribute the estate?
Executors and administrators have a year from the end of the month of death the distribute the estate. If the year passes, the beneficiaries can call upon them to distribute.
Who can bring administration proceedings?
Administration proceedings can be brought by anyone interested in the estate including beneficiaries, creditors and PRs.
What are the two categories of administration proceedings?
Wills
a) Applications limited to a particular issue
This application may be non-contentious e.g. just need from court guidance.
b) Applications of a general administration order
Under this order, the court supervises the PRs. The PRs cannot act until the court has given permission.
This is a last resort and the court will not decide to do this lightly.
An alternative would be for the court to appoint a judicial trustee to act as PR with another person or alone.
Do beneficiaries have an equitable interest in the estate before distribution?
Beneficiaries of an unadministered estate do not have an equitable interest in the deceased’s property until the PRs transfer or assent the property to them. The PRs have both the legal and equitable interest. This differs from trusts.
The beneficiaries do have a right to compel due administration even if they do not have an equitable interest.
Do beneficiaries have a right to demand inspection of accounts?
Beneficiaries have a right to demand inspection of accounts (records of receipts and payments kept by PRs throughout the administration). If the PRs refuse to comply, the beneficiaries can apply for a court order.
Do beneficiaries have a right to demand disclosure of reasons for PR decisions and deliberations on a discretionary matter?
There is no automatic entitlement to disclosure of reasons for PR decisions and deliberations on a discretionary matter. However, if they refuse, beneficiaries can apply to court.
What is a citation to take probate?
This may be applicable where an executor has lost their right to renounce probate by intermeddling in the estate but has not applied for grant of probate and will not do so.
Once they have been cited, they have to take out the grant.
If they do not take out the grant without good reason, the citor can apply to court to get the executor to be passed over. If there is no other executor, the grant to take out would then be a grant of letters of administration with with will annexed.
What is a citation to propound a will?
This is used where it becomes apparent that there may be a will but administration has already been carried out under another will or intestacy.
In order for beneficiaries to protect their entitlements from being diminished, they can cite the executors in the later will and any interested persons under the will.
If the citees fail to act on it or enter an appearance, the citor can apply to the court for an order for a grant as if the will were invalid.
What is a citation to accept or refuse a grant?
This is the standard method of clearing off a person with prior right to a type of grant who has not applied and shows no intention of applying for a grant.
If the person cited does not take steps to take out the grant, the grant may be issued to the citor.
What is the best option if the PR is incompetent or unwilling?
Compelling a person to take an grant could cause more issues if they are incompetent and unwilling.
Another option is to apply for a court order to pass them over in favour for someone else. E.g. an executor has intermeddle but will not do anything.
What can be done to prevent the issue of a grant e.g. in a situation where someone needs more time to investigate the situation?
If a person has just cause to dispute the validity of a will or has another reason why the grant should not be issued, they can lodge a caveat at HMCTS. Other reasons could be a beneficiary not believing the executor has the capacity to act.
What does a caveat do?
A caveat prevents a grant from being issued, until the caveat is removed or it ceases to be effective.
How is an application for a caveat lodged?
An application for a caveat can be made online or using form PA8A.
How long does a caveat last?
A caveat lasts for six months although its duration can be extended.
An applicant for a grant may issue a warning to the caveator which requires the caveator to enter a appearance within 14 days setting out their interest.
If the caveator fails to do so they can remove the caveat.
What is passing over?
Compelling a person to take an grant could cause more issues if they are incompetent and unwilling.
Another option is to apply for a court order to pass them over in favour for someone else. E.g. an executor has intermeddled but will not do anything.
Why do PRs need to produce estate accounts?
PRs need to produce estate accounts for the residuary beneficiaries to show all the assets of the estate, the payment of debts, administration expenses and legacies and the balance remaining for the residuary beneficiaries.
The balance is usually a combination of assets transferred to the beneficiaries and some cash. Interim payments need to be taken into account and shown on the estate accounts.
The residuary beneficiaries then sign the accounts to indicate their approval.
Does the residuary beneficiary signing accounts absolve PRs from liability?
The residuary beneficiaries then sign the accounts to indicate their approval which also absolves PRs from future liability. But does not absolve them from liability for fraud or failure to disclose assets.
Is there a prescribed form for estate accounts?
There is no prescribed form for estate accounts. The account should show capital assets and income produced during the administration period, in separate capital and income accounts.
Are estate accounts always necessary?
Not for small estates. Although it is always necessary to prepare separate accounts if the will/intestacy rules creates a life or minority interest. This is because the capital and income need to be distinguished throughout the period of the trust and when it ends.
Can a beneficiary request to see the estate accounts before administration is complete?
If a beneficiary wants to see the estate accounts before the administration is complete and the executors refuse to comply, a beneficiary can apply to the court for an order to compel the executors to provide the estate accounts.
What do PRs need to consider when making final distributions to residuary beneficiaries?
Before making distributions, need to consider if they have made interim distributions already on account of their entitlement.
These must be taken into account when considering what is left to be transferred.
Whether they are adults/minors or have a vested/contingent interest.
What do PRs need to consider when making final distributions to residuary beneficiaries who are adults with a vested interest?
Apart from any interim distributions that must be taken into account when considering what is left to be transferred, if they are adults and have a vested interest, their interest can be transferred straight to them.
What do PRs need to consider when making final distributions to residuary beneficiaries who are adults with a contingent interest?
Apart from any interim distributions that must be taken into account when considering what is left to be transferred, if they have a continent interest, the property has to be transferred to a trustee who will hold it on trust for them until they fulfil the contingency.
What do PRs need to consider when making final distributions to residuary beneficiaries who are minors?
Any interim distributions that must be taken into account when considering what is left to be transferred.
If the beneficiaries are under 18, it does not matter whether they have a vested or a contingent interest, they cannot give good receipt. The property will be held on trust for them, either until they reach 18 or they fulfil their contingency.
How do PRs transfer personalty to beneficiaries?
Personalty = usually delivery (no particular form of assent is required)
How do PRs transfer company shares to beneficiaries?
Company shares = stock transfer form (PRs must also show their grant to the company as proof of title to the shares) and beneficiary must apply to be on the register of members.
How do PRs transfer freehold/leasehold to beneficiaries?
Freehold/leasehold = by means of an assent, which will become the document of title to the estate. If the PRs continue to hold in the capacity of trustees then another assent is necessary to formally vest it in themselves. Must be in writing, signed by PRs and in name of the person in whose favour it is made. A deed is not necessary to pass the legal estate. But this can be useful/necessary e.g. if an indemnity covenant needs to be given.
The PRs need to calculate the income tax and CGT liability for each tax year in the administration period or part of the year.
They can make an informal payment without having to provide a tax return in most cases. The exception is for complex estates.
What is a complex estate?
Complex estate:
- Value of the estate exceeds £2.5 million
- Tax due for the whole of the administration period is over £10,000
- The value of the assets sold in the tax year exceeds £500k
The payment is usually made in a lump sum at the end of the administration period (not complex estates). CGT for disposal of UK residential land must be paid within 60 days of completion.
What matters do the PRs need to consider in terms of tax when completing the administration?
a) Adjusting inheritance tax - corrective amount
b) PRs continuing tax liability - corrective amount
c) Income tax for administration period
d) Capital gains tax
When will PRs have to adjust the inheritance tax assessment?
An adjustment for either/or the instalment or non-instalment option may be necessary if:
- New assets or liabilities have been discovered since the IHT account
- Lifetime transfers made in the 7 years before death have been discovered
Asset valuations for e.g. shares and land, have come back - PRs and HMRC have agreed the tax liability or repayment of the deceased’s income or capital gains before death
Sales made by PRs after the death have given rise to inheritance tax loss relief. This is when qualifying assets are sold within 12 months of the date of death for less than their value calculated at the date of the death. The sale price (the loss) is swapped with the market value at death and the IHT is adjusted accordingly. Qualifying investments are shares or securities which are quoted on a recognised stock exchange at the date of death and also holdings in authorised unit trusts. The relief is not automatic so the PRs must make a claim. It is usually only available to a PR making a claim and not a beneficiary to whom the assets have been transferred.
Do PRs have continuing inheritance tax liability?
Yes, when the IHT is being paid by instalments, the PRs should consider retaining some assets to pay the future instalments. If they do not do so and distribute all assets, the PRs continue to be liable to pay the remaining instalments so it is risky for them to rely on the promise that the beneficiaries will pay the tax. If they disappear/become insolvent, there are no assets to pay the IHT and PRs will be liable.
In terms of IHT on lifetime transfers:
When a deceased dies within 7 years of a PET or LCT, the donee has to pay (more) IHT. However, if the donee has failed to pay IHT on the gifts within 12 months after the end of the month of death, the PRs of the donor’s estate become liable.
However, the deceased’s liability is limited to the extent of the deceased’s assets that they have received or would have received, but for their neglect or default.
In terms of IHT on GROB:
If the deceased made a GROB, this property is treated as part of the estate on death. Whilst the donee of a gift is primarily liable to pay the tax, if the IHT is unpaid 12 months after the end of the month of death, the PRs are liable.
What actions do PRs need to take if there needed to be tax adjustments?
When all tax variations considered, the PRs report the outstanding matters (if there are any) to HMRC in a ‘corrective account’.
What is IHT clearance?
The PRs will want to obtain confirmation from HMRC that there are no other IHT liabilities. They can apply for this using IHT30. The confirmation is provided in a clearance certificate. Once received. The certificate discharges all people, including PRs from IHT. This does not absolve them from fraud or non-disclosure.
Do the PRs have liability for the deceased’s income and CGT?
The PRs have liability immediately following the death to make HMRC return for the deceased’s income and capital gains.
Tax liability is debt that the PRs must pay during the administration.
The debt is deductible when the IHT is calculated. Alternative, if tax was overpaid and tax refund is obtained, then this is an asset and increases the size of the estate for IHT purposes.
How is the deceased’s tax liability calculated?
Calculated from the period of 6 April before the death and ends with the date of death. This is the tax that was due before the deceased died. Even if they die part way through the income tax year, the same tax reliefs and allowances can be claimed as if they lived throughout the whole year.
What happens to any capital gains or income from assets that is received during the administration period?
PRs must pay CGT on taxable gains made following a disposal of estate assets and pay income tax on any income received during the administration period.
What are the differences between the PRs paying income tax and the deceased paying income tax?
There are some differences with PRs managing income tax than when a live person sorts out their income tax:
The PRs do not pay income tax on any higher rates (so it is 8.75% on dividends and 20% on other income).
PRs do not benefit from any allowances available to individuals for income tax.
However, if the only income received is interest payment of less than £500, then PRs do not need to pay any income tax.
The interest is therefore paid to the beneficiary who is entitled to it (who owns the asset) and they have to submit it in their own income tax return.
PRs may be able to claim relief for interest paid on bank loans to pay inheritance tax on a deceased’s personal property located in the UK.
Once the PR’s tax position has been settled, the rest of the net income is transferred to the beneficiary who is entitled. The beneficiary then deal with it as their property and their income tax position relates to their own finances but they will get credit for the tax paid by the PRs on that asset.
At what value do the PRs acquire the deceased’s assets for CGT purposes?
The PRs acquire all of the deceased’s assets at their probate value at death. This means that any gains made during the deceased’s lifetime are forgotten so they are not charged. The asset is taken as the value on death. For future CGT issues, the probate value is the base cost so any actual purchase price becomes irrelevant.
What are the differences between the PRs paying CGT and the deceased paying CGT?
If the PRs then make a sale of an asset during the administration e.g. to raise capital, this is a disposal that would attract CGT.
Again the CGT position differs from a non-probate disposal. The CGT payable for PRs is 20% although this is increased to 28% for gains on residential property which is taxed at 28%.
The PRs can claim annual exemption for disposals made in the tax year in which the deceased died and the following two tax years (if administration is ongoing). This is £6,000 for 23/24.
It is possible for the PRs to plan the disposal carefully so that the annual exemption can be used for the three tax years it is available.
If the assets are worth less at death than when they were bough i.e. they have depreciated in value, then an allowable loss for CGT will arise.
This allowance loss can be set off against gains made by the PRs on other sales. These are either sales in the same year or a future tax year during the period of administration.
If a loss has not been relieved at the end of administration, it cannot be transferred to the beneficiaries.
The tax therefore has to be planned carefully e.g. planning the sale of their assets or transferring assets that have depreciated directly to the beneficiaries/trustees. The beneficiary/trustee is deemed to have acquired the asset on its probate value rather than the original purchase value. This is therefore the base cost for any future CGT disposals.
What do the PRs need to consider before distributing specific legacies?
Before distributing, the PRs need to ascertain that the specific legacy is not needed to pay debts and expenses.
What is the process of dealing with distribution of specific legacies?
a. Check it is not needed to pay/debts expenses
b. Transfer asset
Who is assessed on income tax during the administration period?
The vesting of the asset is retrospective to the date of death. This means that any income produced by the beneficiary belongs to the beneficiary during this time.
However, they are not entitled to the income as it arises and need to wait until the property vests in them.
As the beneficiary is entitled to the income, the beneficiary will be assessed on the income tax from death.
Who bears the cost of transfer of a specific legacy?
The beneficiary bears the cost of transferring the assets e.g. necessary insurance cover. The beneficiaries should therefore reimburse the PRs for the expenses incurred. This obviously only applies as long as there is no other intention expressed in the will.
If the deceased’s title to an asset is being disputed, who bears the costs?
If the deceased’s title to the asset is being disputed, the costs fall on the beneficiary.
What is the general approach to pecuniary legacies regarding where the asset is paid from?
If the will does not designate assets for this, the PRs must decide.
The general approach is that they should be paid from the residue and real property is to be avoided.
When should pecuniary legacies be paid?
The general rule is at the payment of the end of the executor’s year. PRs are not bound to distribute it before the expiration of the one year from death.
What happens if the pecuniary legacy is not paid within the correct time frame?
But the beneficiary is entitled to interest* compensation payment if its takes them longer than the executor’s year. *Either the rate defined in will or the rate payable into court. Dependant on when the pecuniary legacy vests in the beneficiary i.e. immediately on death or on fulfilment of a contingency, the date the interest becomes payable is a year after the date it becomes possible for it to vest in them.
What are the exceptions to the interest payment rule regarding pecuniary legacies outside the correct time frame?
However, there are four exceptions to the rule. The exception are where interest is payable on a pecuniary legacy from the date of the death rather than from the end of the executor’s year.
This happens when the legacies are:
Payable in satisfaction of a debt owed by a testator to a creditor
Charged on land owned by the testator
Payable to the testator’s minor child
Payable to any minor where the intention is to provide maintenance to that minor
When should PRs pay the deceased’s outstanding debts and the funeral account?
Once some money has been collected from immediate sources e.g. bank accounts, the PRs should pay the deceased’s outstanding debts and the funeral account.
When do PRs need to pay back a loan taken out for IHT?
If they took out a loan for IHT, the PRs will need to pay this back. It may be that the undertaking that was given was a ‘first proceeds undertaking’. Failure to do would be a breach of the undertaking.
What do PRs need to consider when paying the debts and expenses of estate assets?
Any of the estate’s assets can be used to pay the debts and expenses. This may involve selling assets. The PRs should consider:
a. The provisions of the will
The will may state where the expenses and debts should be paid from. If no provision, they are usually paid from the residue.
b. Beneficiaries wishes
The wishes of the beneficiaries of the residuary estate should be respected if possible. Pls may have the power to sell any assets in the residuary estate but the residuary beneficiaries should be consulted beforehand. May be necessary to get professional advice on the sale.
c. Tax consequences
The PRs should consider any capital gains or losses that could arise out a sale and exemptions. Annual exemptions should be fully used for capital gains tax.
If assets are to be sold at a loss compared to their value at the date of death, loss reliefs for capital gains tax and inheritance tax purposes may be available for the PRs.
Do PRs need to pay funeral expenses from the estate?
PRs are required to pay reasonable expenses of a funeral that is suitable for the deceased’s means and circumstances (question of fact). PRs are only liable to do so to the extent they have sufficient assets of the deceased’s estate to make the payment.
What is the order of priority for solvent estates?
a. Secured debts
A beneficiary who takes an asset with a secured debt, takes the asset subject to the debt. It effectively moves with the asset so the beneficiary recipient will have to deal with it.
The above rule is subject to any variation (in the will or other document). However, the rule cannot by a general provision in the will e.g. “the debts should be paid out of the residue”. A direction like this would be construed to mean a direction to pay debts from residue other than secured debts.
For contrary intention to be effective, there must be express reference to a secured debt e.g. my cottage to my daughter free of mortgage. This would be enough to ensure the asset was free of debt.
b. Unsecured debts and expenses
There is a statutory order of priority:
- Property not disposed of by a will (i.e. passing by full/partial intestacy not subject to the retention of a sum for pecuniary legacies)
- Residue gift (subject to the retention of pecuniary legacy fund if not already done)
- Property the will sets aside (or charges with) the repayment of debts
Money in the pecuniary legacy fund (if insufficient money, the legacies abate i.e. are reduced proportionately according to value) - Property specifically given e.g. chattels
Generally the residue is used first before specific gifts.
The statutory order applies subject to contrary intention in the will.
What is the order of priority for payments of debts/liabilities in insolvent estates?
The order of distribution in the Administration of Insolvent Estates of Deceased Persons Order should be followed:
- Secured creditors - they are ranked first and are paid first.
- Unsecured creditors - will be paid out of any remaining assets.
a. Funeral expenses and testamentary expenses are paid first.
b. Ordinary unsecured debts and liabilities of the deceased - if more than one, they will abate equally.
If there is any doubt as to whether the estate is solvent or insolvent, the estate should be treated as insolvent. This is because the PRs are liable for failing to administer the estate in accordance with the statutory order.
How do assets devolve on PRs?
If the assets are passing under the will or intestacy rules, the assets will devolve on the PRs automatically. Devolution means that the PRs have ownership of the assets in the estate but they still need to collect the assets in. Real property passes under statute and personal property under common law.
When does property devolve on executors?
For executors the devolution happens immediately on death.
When does property devolve on administrators?
For administrators, the devolution happens when the grant of representation is issued.
How are assets collected in?
Some assets can be collected in immediately e.g. cash in home. But most assets will require a grant of representation to collect the asset. An office copy of the grant is usually acceptable - it does not have to be the original copy.
What do the PRs do when the assets have been collected in?
Once the assets have been collected, the PRs must preserve the assets pending the completion of the administration.
Preservation essentially means that they have to manage the assets. This is under the same duties as those of trustees in terms of management and investment and they are subject to the same reasonable care and skill.
What options do the PRs have to protect themselves from missing beneficiaries and creditors?
a. Keeping assets in case claimant appears.
b. Indemnity from beneficiaries
c. Insurance to provide funds if they reappear
d. Benjamin order
e. Waiting 6 months to distribute
How can PRs protect themselves from unknown beneficiaries and creditors?
a) Make searches of property and b) make an s27 advertisement.
How long do PRs need to wait before distributing the estate if they have made a s27 advertisement?
2 months - The PRs should starting advertising (for min two months) as early as possible in the administration. For executors the earliest time would be after death. For administrators this would be from obtaining grant of representation.
Where do PRs need to advertise a s27 notice?
The advertisement should be in the London Gazette, a local newspaper in district where the deceased owned the land and anywhere that a court in administration would direct to advertise in.
What should PRs do if they do not know where to advertise a s27 notice?
If the PRs are not sure where they should advertise, they can apply to court for directions.
What does a person need to do in response to a s27 notice?
If a person who is interested in making a claim, they need to send in a particulars of claim within the time specific in the notice. The time specified in the notice cannot be less than two months.
What searches should PRs do to investigate whether there are any unknown creditors?
The PRs should make searches that ‘a prudent purchaser of land would make’. This includes Land Registry, the Land Charges Register and the Local Land Charges Registry (if relevant).
Until when do PRs hold office?
PRs hold the office for life so if further assets or liabilities are discovered after the residue has been transferred then the PRs are still required to deal with them.
What is a PRs liability?
If they accept office, they are liable for the loss to the estate resulting from a breach of duty they commit in the office of PR. They are not generally liable for breaches committed by a co-PR.
What is the test for liability of a PR?
Whether there has been a loss caused by the breach. The test is not whether the PR is culpable.
Does the court have discretion with regard to PR liability?
The court has the discretion to relieve a PR from liability for breach of duty if satisfied that the PR has “acted honestly and reasonably and ought fairly to be excused for the breach”.
Can an exclusion clause in the will protect the PRs from liability?
An executor might be able to rely on a clause in the will providing protection from liability for mistakes made in good faith.
Can step-children take out a grant of simple letters of administration?
No
Can a people in a lower category of order of priority for grant of letters to administration take out the grant?
People in the lower category can only take the grant if they clear off the above category. In form PA1A they also need to state their relationship to the deceased as well as clearing off.
Unless the applicant is the Treasury solicitor or a creditor, the applicant must have a beneficial interest under the estate through the intestacy rules.
What is the minimum number of administrators?
Normally one but if there is a life interest or a minor, two administrators need to be appointed but the court may dispense of this in special circumstances.
What is the maximum number of administrators?
If there are many possible administrators in the same category, then the grant will not be issued to more than 4 administrators.
Is it possible to reserve a power for an administrator?
No
What happens if there are two or more people entitled to apply as administrators for letters of grant of administration with or without will in the same category?
If there are two or more people entitled to apply in the same category, they can make grants without giving each other notice.
How can a person denounce their right to grant for letters of administration with or without will?
They can renounce their right by submitting Form PA16. Renunciation does not affect their beneficial entitlement or any appointment as a trustee.
Do administrators lose their right by intermeddling?
No
What needs to be sent to HMCTs to apply for a grant of probate?
Form PA1P, the original will and any codicils.
The dates of the will and codicils must be entered onto the form and details must be provided of any foreign wills in case they revoke the UK will.
The form asks whether the deceased married or formed a civil partnership after making the will.
How many executors are required to take out a grant of probate?
Only one executor is needed (even if there is an interest of land or a minor interest).
How many executors can apply for a grant?
There is no limit to how many executors can apply to a grant but ONLY 4 can take out a grant of probate. The power can be reserved to the others so they can take it out if a vacancy arises.
What happens when an executor lacks mental capacity?
An executor who lacks capacity to act cannot apply for the grant. If there are other appointed executors, they can act. If there is no-one else, if they have an attorney who has power of attorney, they can take out the grant.
Can a minor take out a grant of probate?
No
If there are multiple executors and only one is a minor, what options does the minor have?
The minor can reserve their power.
This means that when they are old enough they can take out a grant when they turn 18 and if the estate is not yet completed.
What is a grant of double probate?
This is the grant that is taken out by a minor when they have historically reserved a power and they turn 18 and the administration is not yet complete so they take out a grant.
What happens when a minor is the only executor named in the will?
If minor is the only executor appointed by will, they cannot take out a grant of probate so it will have to be a grant of letters of administration with will attached for use and benefit of the minor. Usually made to the parent/guardian until minor attains 18. When they reach 18, they could then apply to stop the grant if the administration has not been completed.
What do PRs need to do before they apply for a grant?
With effect from January 2024, the requirement for PRs submitting a form IHT400 to obtain a form IHT421 from HMRC no longer applies. The process now is that following submission of the IHT400, HMRC will write to the PRs providing a unique code and details of the estate values. The PRs must include the code and estate values in the relevant grant application form.
The grant will not be issued if the code is not included HMCTS. An interval of 20 days should be allowed for this to be done.
The application forms for a grant include a question asking when the IHT400 was submitted and the application will be blocked if insufficient time has elapsed.
What is an IHT400?
The IHT400 is an inventory of assets to which the deceased was beneficially entitled and of their liabilities.
This is the form that is used to show reliefs and exemptions and is used for calculating IHT.
What is the deadline for sending the IHT400 to HMRC?
It should be sent to HMRC within 12 months of the end of the month in which the death occurred.
PRs will however want to send it within six months of the end of the month of death to avoid paying interest in IHT.
If the estate is excepted, is it necessary to submit an IHT400 form to HMRC?
HMRC then has 60 days from the issue of the grant of representation to ask for additional information. If it does not make this request it is automatically cleared.
Under what sum is the application fee for a grant not payable?
Estates of £5,000 or less.
In which forms can evidence for grant be submitted to prove validity of the will?
This evidence can be an affidavit sworn before a solicitor who is not acting for the PRs or a witness statement verified by a statement of truth.
When will evidence of due execution and/or capacity be required?
The registrar will require evidence of due execution and/or capacity if: a) there is no attestation clause, b) there are circumstances raising doubt about the execution of the will, c) the attestation clause is defective.
The evidence should come from an attesting witness.
If the doubt is about mental capacity, the affidavit may have to be from a doctor. It will be helpful if the doctor had examined the testator at the time the will was made.
