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SQE 1 - WAE > personal representatives and trustees in the administration of estates and consequent trusts. The rights, powers and remedies of beneficiaries of wills and consequent trusts > Flashcards

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

1
Q

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

A

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

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2
Q

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

A

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

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3
Q

Are burial and funeral wishes legally binding on personal representatives?

A

NO

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4
Q

What pre-grant duties are owed by PRs?

A

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

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5
Q

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

A

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

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6
Q

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

A

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

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7
Q

How long should a PR take to administer an estate?

A

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

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8
Q

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

A

Not necessarily a breach, but PRs must justify any delay

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9
Q

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

A

YES - personal

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10
Q

When do PRs owe a statutory duty of care?

A

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

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11
Q

What fiduciary duties are owed by PRs and trustees?

A

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

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12
Q

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

A

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

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13
Q

Can PRs purchase estate assets for themselves?

A

NO - breach of fiduciary duty (self-dealing)

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14
Q

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

A

NO - still self-dealing

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15
Q

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

A

YES

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16
Q

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

A

YES

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17
Q

What 7 statutory powers to PRs have?

A

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

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18
Q

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

A

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

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19
Q

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?

A

YES - a balancing cash transfer must be paid

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20
Q

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

A

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

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21
Q

How can PRs pay for insurance premiums on estate assets?

A

By using estate assets

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22
Q

When should PRs exercise their power to invest?

A

If it is likely that the administration will take some time

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23
Q

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

A

Only freehold/leasehold land in the UK

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24
Q

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

A

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

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25
Q

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

A

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

26
Q

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

A

Lay PRs and professional PRs acting alone

27
Q

Can PRs reimburse for expenses out of the estate?

A

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

28
Q

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

A

NO

29
Q

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

A

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

30
Q

Can PRs delegate their role to a beneficiary?

A

NO

31
Q

What is the procedure for delegating PR powers?

A

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

32
Q

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

A

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

33
Q

Can PRs ever accept receipt from a minor beneficiary?

A

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

34
Q

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

A

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

35
Q

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

A

In the shareholders’/partnership agreement

36
Q

Can jointly appointed PRs usually act alone?

A

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

37
Q

When can jointly-appointed PRs exercise powers alone?

A

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

38
Q

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

A

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

39
Q

What is a devastavit?

A

A claim against a PR where their wrongdoing has caused loss

40
Q

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

A

Account of profits and/or transaction set aside

41
Q

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

A

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

42
Q

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

A

1) Court order for replacement PR
2) Administration action

43
Q

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

A

YES - if they are a PR-trustee

44
Q

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

A

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

45
Q

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

A

The will is distributed in accordance with a written legal opinion

46
Q

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

A

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

47
Q

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

A

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

48
Q

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

A

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

49
Q

What is a Benjamin Order?

A

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

50
Q

What must PRs do

A

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

51
Q

What must PRs do before a Benjamin Order is awarded?

A

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

52
Q

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

A

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

53
Q

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

A

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

54
Q

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

A

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

55
Q

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

A

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

56
Q

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

A

Maladministration

57
Q

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

A

NO - not for fraud or liability to creditors

58
Q

Where should money collected in be paid into?

A

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

59
Q

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

A

12 months, i.e. executor’s year

60
Q

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

A

Personal liabilities to both creditors and beneficiaries for any consequent loss

61
Q

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

A

NO

62
Q

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?

A

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

SQE 1 - WAE (5 decks)

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