Role of a PR Flashcards
What is the primary role of a Personal Representative (PR)?
To administer the estate of the deceased
- collect assets
- ensure debts are paid
- meet tax liabilities
- distribute to entitled beneficiaries
Can a Personal Representative be a beneficiary of the estate?
Yes, a Personal Representative may be (but not always) a beneficiary of the estate.
What must the wording of the appointment in a will be?
Must be clear who is being appointed and must make it clear they are being appointed to the role of executor
What happens when there is a will but no executor willing to act?
There is an administrator.
Where does the legal title to the estate lie?
With the PRs by virtue of their appointment.
They can decide to formally transfer the deceased’s assets into their name
Does a Personal Representative automatically become the ‘trustee’ of the estate?
No, a PR is not automatically the ‘trustee’ of the estate.
What happens when estate administration is complete?
The role of PR ends. Any property held on trust should be transferred to the trustee.
When will a PR also be a trustee?
When the will expressly appoints executors to act in the power of trustee or there is intestacy
PRs hold the estate generally ‘on trust with a power to sell’ in intestacy
What type of trust may arise under intestacy?
A statutory trust, e.g., where there is a minor beneficiary.
What is the nature of the role of a Personal Representative?
Still fiduciary in nature - lots of duty of care provisions apply
When might solicitors be involved in the administration of an estate?
- instructed by lay PRs
- appointed as executor
- contentious matters
Who is the firm’s client when solicitors are instructed by lay PRs?
The PR rather than the beneficiaries.
How can legal fees be covered if a solicitor is instructed by a lay PR?
Legal fees may be paid using estate assets.
What is a common law duty of a PR?
To dispose of the deceased’s body.
What is a statutory duty of a PR regarding HMRC?
To provide information about the estate and pay inheritance tax.
This includes completing IHT 400 to notify HMRC about assets and liabilities and using estate funds.
What does the duty to administer entail?
- collect in and get the real and personal estate of the deceased (identify assets, liabilities, creditors, obtain control of possessions)
- administer estate (keeps assets secure, pay debts, distribute)
- provide inventory and account in estate accounts
i.e identify assets, liabilities and creditors and obtain control, possession or legal ownership of the assets
What is the duty of due diligence for a PR?
PRs should complete administration within 12 months of the date of death, and must justify any delays.
What happens if additional assets, liabilities, or beneficiaries arise?
PRs may be personally liable or obliged.
What is the statutory duty of care for PRs?
PRs are subject to the same statutory duty of care as trustees.
This applies when they make investments, acquire land or insure estate assets. Pro PRs will be subject to a higher standard.
What is the nature of the role of a PR?
The role of PR is fiduciary in nature.
- no conflict
- no profit
