Obtaining the Grant of Representation Flashcards
What is a grant of representation?
It confirms the personal representatives’ authority to act and their title to the deceased’s assets
What grants of representation and in what circumstances will they be obtained?
- Valid will appointing executors, one or more is able and willing to act - Executors will obtain a grant of probate using form PA1P
- Valid will, but there are no persons able or willing to act as executors - Administrators will obtain a grant of letters of administration with the will annexed using form PA1P
- No will or no valid will - Administrators will obtain a grant of (simple) letters of administration using form PA1A
How many executors or administrators are needed?
One executor is always sufficient
Two administrators are required if there is a minority (under-18) or life interest.
What authority do PRs have before the grant of representation?
- Executor has authority under will; grant confirms this - They need grant to sell land and access deceased’s money from bank
- Administrators gain authority from the grant and the grant vests the property in them
There are some assets which do not require a grant to be obtained. What types of assets can be obtained without a grant?
1) If the entire estate is made up of these, a grant is not needed at all
2) Some assets do not pass to PRs at all (the same things that don’t pass under will or intestacy (beneficial joint tenancy share of property, pension benefit for death in service, life insurance policies))
3) Some assets can pass to the PRs without a grant:
- Administration of Estates (Small Payments) Act 1965 - Orders under this allow payments to be made to those if beneficially entitled and value is £5000 or less
i) Payments are awarded at discretion of institution and can be refused
ii) Examples; money in National Savings and Trustee Savings banks (not other bank accounts); money in building societies; National Savings Certificates and Premium Bonds
- Chattels – can usually be sold without grant
- Cash – actual physical cash found in D’s possession, not bank account
In broad terms, what is the process re IHT with HMRC before obtaining a grant?
Calculate IHT payable on estate
Submit IHT account to HMRC; excepted estates don’t pay IHT
Before applying for grant, if payable, PRs send the IHT account IHT400 to HMRC and pay any IHT due before the grant to HMRC
Wait for HMRC to provide unique code and asset values before applying for grant
How are applications for grant of representation made? What must be included with an application?
1) Applications by legal professionals for grant of probate must be made online
2) Applications for grants of letters of administration are made by post
- By sending form PA1P (if there is a will)
- By sending form PA1A (if there is no will)
3) Same fee for all applications
- £300 where estate exceeds £5000
- No fee is estate is £5000 or less
4) Will and codicil, if any, must be sent to HM Courts and Tribunal Service to obtain grant
If there are issues around the validity of the will, what additional documents would HMCTS require?
1) Evidence of due execution and capacity
- Affidavit from attesting witness (for proper execution)
- Affidavit of doctor (for doubts around capacity)
2) Evidence as to knowledge and approval
- Affidavit or witness statement made by someone who can speak to the facts of signing (maybe attesting witness)
3) Evidence of plight and condition
- If will has been altered since execution, shows attempted revocation or there is a mark suggesting something was attached
- Affidavit of someone with knowledge of the facts needed
4) Lost will
- A will known to have been in D’s possession, but which cannot be found is presumed to have been destroyed with intention to revoke – can be rebutted
- If will lost or accidentally destroyed, probate may be granted using a copy of the will + appropriate affidavit from executor
The IHT400 acts as an inventory of D’s beneficially entitled assets and their liabilities and, until this is submitted, no grant of representation can be issued. When must this be submitted and are there exceptions?
Should be **delivered within 12 months of the end of the month in which D died **
No form needed if estate is ‘excepted’
When will an estate be excepted for the IHT400 form as a ‘small estate?’
- Where gross value of estate + value of ‘specified transfers’ and ‘specified exempt transfers’ in the 7 years prior to death, does not exceed nil rate threshold (£325,000; or higher if increased by spouse’s unused NRB)
- D must not make chargeable lifetime transfers in the seven years before their death which, when aggregated, exceeded £250,000
i) STs – chargeable transfers of chattels, cash, property, interests in land, quoted shares
- Transfers of unquoted shares means estate cannot be excepted under Categories 1 and 2
- Business + agricultural property relief is ignored, so unrelieved value considered
ii) SETs – transfers between spouses, gifts to charities, political parties, housing associations and others
When will an estate be excepted for the IHT400 form as an ‘exempt estate?’
1) Applies where bulk of estate attracts spouse or charity exemption
- Gross value + value of STs and SETs made in 7 years prior to death, must not exceed £3 million; and
- Net chargeable estate after deduction of liabilities and spouse/charity exemption + (STs + SETs made in 7 years prior to death) must not exceed NRB (£325k or higher if increased by spouse’s unused NRB)
- D must not make chargeable lifetime transfers in the seven years before their death which, when aggregated, exceeded £250,000
When will an estate be excepted for the IHT400 form as a ‘non-domiciled estate?’
D never domiciled in UK and owned limited UK assets
When must IHT be paid?
1) IHT due within 6 months of the end of the month where D died – late payment attracts interest
- IHT on non-instalment option property must be paid before the grant
2) Certain types of property, like land and some types of business property, allow payment by instalments
- First instalment due within 6 months of the end of the month where D died
- Remaining 9 instalments are due at annual intervals
- Instalments always carry interest
Given that IHT typically needs to be paid before grant of representation, in what ways can this IHT be funded?
Direct payment scheme – payment of IHT is paid direct to HMRC from D’s bank accounts by the bank - This is done after PRs show the bank ID, complete a form with the bank and send that at the same time as the IHT4000
Life assurance payable to estate – may be released by life assurance company
Realising assets up to £5000 without grant using Administration of Estates (Small Payments) Act 1965
Loans from wealthy beneficiaries
Bank borrowing
In exceptional cases, HMRC will allow the grant to be obtained on credit
How does probate value differ from IHT value when obtaining a grant of representation?
Probate value on form differs from IHT value, as property not passing under grant does not count for probate value but counts for IHT estate
Give some more details about executors obtaining the grant of probate using form PA1P
One adult executor can act alone in all circumstances
An executor lacking capacity to make decisions cannot apply for the grant
Where a minor is named as executor, an adult executor can be granted probate with power reserved to the minor to take the grant later
If a minor is sole executor, someone like their parent takes the grant on their behalf until they reach 18 - A grant of letters of administration with will annexed for the use and benefit of the minor will be made to parents
Executors can renounce their right to take the grant, if they haven’t intermeddled (done anything a PR might do)
Power can be reserved to another, if a vacancy arises before administration of estate complete – must apply to use this power (no automatic substitution) - this can be useful if someone intends to help at a later date
When might the grant of letters of administration with will annexed using form PA1P be required?
There must be a valid will, but no executors willing or able to act
This may occur if:
- The will doesn’t appoint executors
- They all predecease or renounce
- Will appointed a spouse as executor, but they have divorced before death
For grant of letters of administration with will annexed, there is an order of priority to the entitlement of the grant. What is this order?
A person in a lower category can only apply if nobody above them is willing + able to take the grant + they must explain why nobody above is applying (‘clearing off’) and why they are entitled when they apply
(a) Executor
- If appointed by the will, willing + able, they have the best right to the grant
(b) Any residuary legatee holding in trust for anyone else
- If A leaves residue to B on trust for C, B can apply for the grant
(c) Any other residuary legatee or any person entitled to share in the undisposed residue
- Those entitled to residue by intestacy can apply
(d) PR of any residuary legatee
- This applies to someone who survives testator, but not long enough to take the grant themselves
(e) Any other legatee
- Any other beneficiaries in the will
(f) PR of any other legatee
Give some more details about administrators obtaining grant of letters of administration with will annexed using form PA1P
1) Parents or guardians of a minor may apply for a grant ‘for the minor’s use and benefit’ on their behalf, until they reach 18
2) Where there is a life interest or property passes to a minor (vested or contingent), 2 administrators must apply for the grant
- Gift to B aged 5
- Estate left to C for life, the remainder to D
3) Maximum of 4 administrators can get grant, no way to reserve power
4) Can renounce, even after intermeddling + doesn’t affect beneficial entitlement
For grant of (simple) letters of administration, there is an order of priority to the entitlement of the grant. What is this order?
The entitlement is the same as the order for intestacy, but people in lower categories can only take grant if there is nobody above them + they explain why nobody above is applying
Spouse
Children or grandchildren if their parents died before D
Parents
Full siblings or their children if their parents died before D
Half siblings or their children if their parents died before D
Grandparents
Full aunties/uncles or cousins if their parents died before D
Half aunties/uncles or their children if their parents died before D
Treasury solicitor (bona vacantia)
Give some more details about administrators obtaining grant of (simple) letters of administration using form PA1A
Minors cannot apply for a grant
Maximum of 4 administrators can get grant, no way to reserve power
Where intestacy creates minority interests through property held for minors on statutory trusts, 2 administrators are required
Can renounce, even after intermeddling + doesn’t affect beneficial entitlement
