personal representatives and trustees in the administration of estates and consequent trusts. The rights, powers and remedies of beneficiaries of wills and consequent trusts

Question 1

What is the consequence of a beneficiary (or their spouse) acting as a witness to execution of the testator’s will?

Answer 1

They are no longer entitled to any gifts under the will (Wills Act)

Question 2

What presumption does a properly constructed attestation clause give rise to?

Answer 2

Presumption of due execution in line with s.9 Wills Act

Question 3

Are burial and funeral wishes legally binding on personal representatives?

Answer 3

NO

Question 4

What pre-grant duties are owed by PRs?

Answer 4

1) Dispose of the deceased’s body
2) Provide information to HMRC and pay IHT

Question 5

What duties does a PR owe UNDER a grant of representation?

Answer 5

1) Collect + administer succession estate
2) Estate account
3) Due diligence + reasonable time
4) Act within powers
5) Statutory DoC
6) Fiduciary duties

Question 6

What can beneficiaries/creditors do if a PR refuses to show estate accounts or fails to maintain adequate records?

Answer 6

They can apply to court under NCPR for an order to produce one

Question 7

How long should a PR take to administer an estate?

Answer 7

12 months from the date of death (‘executor’s year’)

Question 8

What is the consequence of exceeding the ‘executor’s year’?

Answer 8

Not necessarily a breach, but PRs must justify any delay

Question 9

Does a PR have any liability to unknown creditors/beneficiaries who come to light AFTER administration is completed?

Answer 9

YES - personal

Question 10

When do PRs owe a statutory duty of care?

Answer 10

When exercising their powers to invest, delegate, insure and to purchase land

Question 11

What fiduciary duties are owed by PRs and trustees?

Answer 11

1) No conflicts
2) No self-dealing
3) No profit

Question 12

Which PRs owe a higher standard of care under the statutory duty of care under a grant?

Answer 12

Professional PRs and those with special knowledge (implied or actual)

Question 13

Can PRs purchase estate assets for themselves?

Answer 13

NO - breach of fiduciary duty (self-dealing)

Question 14

Can PRs purchase estate assets for themselves if they are paying a fair market value?

Answer 14

NO - still self-dealing

Question 15

Can a PR’s statutory powers of administration be excluded/modified by a will?

Answer 15

YES

Question 16

Do the powers for ‘trustees’ under the Trustee Act and TOLATA also apply to PRs?

Answer 16

YES

Question 17

What 7 statutory powers to PRs have?

Answer 17

1) Sell/charge/lease
2) Appropriate
3) Insure
4) Invest
5) Charge
6) Delegate
7) Appoint trustees

Question 18

Which assets can PRs choose to appropriate to beneficiaries in settlement of their entitlement?

Answer 18

Any residuary assets, provided their value on the date of appropriation doesn’t exceed the beneficiary’s entitlement

Question 19

If the value of an asset requested by/appropriated to a beneficiary is less than the value of their entitlement, can they claim the remainder of their entitlement?

Answer 19

YES - a balancing cash transfer must be paid

Question 20

What are the requirements for a PR to be able to appropriate a specifically requested asset to a beneficiary, e.g. a watch?

Answer 20

1) Consent of the receiving beneficiary
2) Not specifically gifted
3) Same/lower value on date of appropriation

Question 21

How can PRs pay for insurance premiums on estate assets?

Answer 21

By using estate assets

Question 22

When should PRs exercise their power to invest?

Answer 22

If it is likely that the administration will take some time

Question 23

What land can PRs/trustees acquire under their power of investment?

Answer 23

Only freehold/leasehold land in the UK

Question 24

What duties does a PR/trustee owe under the power of investment?

Answer 24

1) Regard to standard investment criteria
2) Regular review
3) Obtain advice

Question 25

What is required for a professional PR to be able to charge for their services?

Answer 25

1) Reasonable remuneration 2) Not acting alone 3) Co-PRs give written consent

Question 26

Which PRs require express power in a will if they are to charge for their services?

Answer 26

Lay PRs and professional PRs acting alone

Question 27

Can PRs reimburse for expenses out of the estate?

Answer 27

YES (although only expenses properly incurred e.g. travel)

Question 28

Can PRs claim reimbursements from the estate if they have had to turn down work to carry out their role?

Answer 28

NO

Question 29

Which decisions can PRs NOT delegate under their statutory power to delegate?

Answer 29

1) How and whether assets should be distributed 2) Whether fees/costs payable out of income or capital 3) Appointment of trustees/nominees/custodians

Question 30

Can PRs delegate their role to a beneficiary?

Answer 30

NO

Question 31

What is the procedure for delegating PR powers?

Answer 31

1) In writing to the agent 2) Written policy statement agreed by agent 3) Regular review

Question 32

When might a PR exercise their power to appoint a trustee, if at all?

Answer 32

If the beneficiary is a minor and the PR doesn't want to be a trustee themselves

Question 33

Can PRs ever accept receipt from a minor beneficiary?

Answer 33

YES - if expressly provided for in the will and the minor is 16+

Question 34

What additional common law power does a PR have if the deceased was a sole trader?

Answer 34

To sell the business as a going concern within a year of death

Question 35

Where will a PR's power to run a business be found (if at all) where the testator was a shareholder/partner?

Answer 35

In the shareholders'/partnership agreement

Question 36

Can jointly appointed PRs usually act alone?

Answer 36

NO - they should act unanimously unless provided for in the will or lawfully using the power of sale/transfer

Question 37

When can jointly-appointed PRs exercise powers alone?

Answer 37

If they are appointed by will and are lawfully using the power of sale or transfer (unless stocks and shares in PRs' joint names)

Question 38

Can PRs be liable for the breaches of co-PRs?

Answer 38

YES - if they didn't make a reasonable effort to monitor their conduct

Question 39

What is a devastavit?

Answer 39

A claim against a PR where their wrongdoing has caused loss

Question 40

What claim may be available against a PR if there was no loss but they nonetheless breached a fiduciary duty?

Answer 40

Account of profits and/or transaction set aside

Question 41

What 4 grounds can a claim against a PR be based on?

Answer 41

1) Maladministration 2) Misuse of assets 3) Negligence 4) Breach of fiduciary duties

Question 42

What 2 ways can PRs effectively be removed for failure to carry out their duties properly?

Answer 42

1) Court order for replacement PR 2) Administration action

Question 43

Can a PR be simultaneously liable for a breach of trust duty as well as PR duty?

Answer 43

YES - if they are a PR-trustee

Question 44

How might a PR seek to protect themselves if they are unsure as to their obligations under a will?

Answer 44

1) Court direction; OR 2) s.48 AJA application (legal opinion)

Question 45

What is the effect of a s.48 AJA application?

Answer 45

The will is distributed in accordance with a written legal opinion

Question 46

What is a s.27 TA notice? When is it used? A notice in the London Gazette/newspaper

Answer 46

in the relevant area/trade giving unknown creditors or beneficiaries 2 months to claim an entitlement

Question 47

How might a PR seek to protect themselves against claims from unknown creditors/beneficiaries?

Answer 47

Seeking a s.27 TA application (2 months' notice of distribution)

Question 48

How might a PR seek to protect themselves against claims from known but missing creditors/beneficiaries?

Answer 48

1) Seeking a Benjamin Order 2) Presumption of Death Act (if presumed dead for 7+ years)

Question 49

What is a Benjamin Order?

Answer 49

Protects PRs from claims against known but missing PRs, e.g. on the assumption that they have died/have no children

Question 50

What must PRs do

Answer 50

Delegate in writing to the agent; provide them with a written policy statement which agent must agree to comply with

Question 51

What must PRs do before a Benjamin Order is awarded?

Answer 51

1) Make full enquiries to establish the true position 2) Show there is no reasonable prospect of knowing the true position without disproportionate expense

Question 52

How might a PR seek to protect themselves from claims against known beneficiaries/creditors, and/or from disappointed beneficiaries?

Answer 52

1) Insurance 2) Payment into court 3) Beneficiary indemnities 4) Exoneration under s.61 TA 5) Exemption clauses in the will

Question 53

How might a PR seek to protect themselves against a beneficiary who has been located but refuses to accept their inheritance

Answer 53

1) Make a payment into court 2) Insurance 3) Beneficiary indemnities

Question 54

How might a PR seek to protect themselves against claims from disappointed beneficiaries/creditors?

Answer 54

1) Insurance 2) Beneficiary indemnities 3) s.48 AJA(legal opinion) 4) Court directions

Question 55

What is required for a PR to apply for total/partial exoneration from personal liability under s.61 Trustee Act?

Answer 55

1) Act honestly and reasonably 2) Ought fairly to be excused from breach and omitting to obtain court directions

Question 56

What type claim might a creditor make if they are not paid, despite there being sufficient funds available to meet all debts/legacies?

Answer 56

Maladministration

Question 57

Can a will limit PR liability for ALL/ANY type of breach?

Answer 57

NO - not for fraud or liability to creditors

Question 58

Where should money collected in be paid into?

Answer 58

Either: 1) PR's (separate) bank account 2) Law firm's client money account

Question 59

How long after death should creditors expect to be paid by?

Answer 59

12 months, i.e. executor's year

Question 60

What liability(ies) does a PR owe if they fail to pay any debts despite there being sufficient assets to do so?

Answer 60

Personal liabilities to both creditors and beneficiaries for any consequent loss

Question 61

Can a PR's liability to creditors be limited by an express provision in a will?

Answer 61

NO

Question 62

A man has died leaving a will. Probate has been granted and, after six months, an interim distribution is made. The solicitor then notices that the will contains a clerical error which is detrimental to a beneficiary and applies for rectification. are the PRs liable?

Answer 62

The personal representatives would not be personally liable, although the beneficiary may be able to recover money or property from other beneficiaries if necessary.