PR Liability and Protection Flashcards
When may a PR be liable for breaches by co-PRs?
If they failed to make reasonable effort to monitor co-PRs’ conduct.
To whom does a PR owe duties?
Estate beneficiaries and creditors.
What is a claim of devastavit?
Legal action against PR for breach of duty, meaning ‘wasting of assets’.
When can devastavit be brought?
When estate suffers loss due to PR wrongdoing.
When can devastavit be brought without a loss? What is remedy?
Only if breach of fiduciary duty occurred
May seek account or set aside transaction.
Causes of action against PR?
1) Maladministration
2) Misuse of assets
3) Negligence
4) Breach of fiduciary duty.
What does maladministration include?
Incorrect distributions, misapplication of funds, premature legacies leaving unpaid debts.
What does misuse of assets include?
Personal use of estate assets.
What does negligence include?
Unreasonable delays, poor or no investment in breach of duty of care.
What could breach of fiduciary duty include?
1) Conflict of interest
2) Profiting
3) Self-dealing.
How can a PR be removed?
By court order or administration action.
Ways a PR can protect themselves?
Court directions, s48 AJA 1985, s27 Trustee Act notice, Benjamin order, Presumption of Death Act, insurance, court payments, indemnity from beneficiaries, s61 Trustee Act 1925.
When would court directions be used?
If PR foresees administration difficulty—guidance or court takeover.
Downside of court directions?
Time consuming and expensive.
What is s48 AJA 1985?
Application to distribute based on legal opinion, if criteria met.
How can PR protect against unknown beneficiaries/creditors?
Publish notice in London Gazette, local press, relevant trade paper (s27 TA 1925).
Who does s27 notice protect you against?
Claims by unknown beneficiaries or creditors.
Does s27 protect against known but missing parties?
No.
Does s27 protect overpaid beneficiaries?
No; disappointed parties may claim against them.
How to protect against known but missing beneficiaries?
Apply for a Benjamin order.
Requirements before granting Benjamin order?
PR must make full enquiries and show no reasonable chance of establishing facts without disproportionate cost.
When can Benjamin order assumptions be used?
To assume, for example, that a missing beneficiary has no children.
Effect of Benjamin order?
Removes PR’s personal liability if assumption later proves wrong.
What is the Presumption of Death Act 2013?
Court can declare person dead after 7+ years missing; confirms presumption of death.
