W4 Flashcards
What is estate administration?
Estate administration is the process of collecting the deceased’s assets, paying debts and liabilities, and distributing the remaining assets in accordance with the deceased’s will or the intestacy rules.
Who are the personal representatives (PRs) in estate administration?
The personal representatives (PRs) are the people permitted by law to administer a deceased’s estate. A PR appointed by a person’s will is called an executor, while a PR appointed by operation of statute is called an administrator.
What is the grant of representation?
The grant of representation is a court order that confers authority on the PRs to carry out the administration of the estate. It establishes the PRs’ right to deal with the deceased’s assets and confirms the validity of the deceased’s will or that the deceased died intestate.
What is the role of a personal representative (PR) in estate administration?
The role of a PR is to administer the estate of a deceased. This involves collecting the deceased’s assets, paying the deceased’s debts and estate expenses, and distributing the estate funds to the correct beneficiaries.
What is the importance of obtaining the grant of representation in estate administration?
Obtaining the grant of representation is a priority for all PRs as it confirms their authority to act and allows them to collect and distribute the deceased’s assets. Many asset holders require sight of the grant before releasing funds to the PRs.
What are the powers, duties, and liabilities of a personal representative (PR) in estate administration?
The role of a PR is fiduciary in nature, similar to that of a trustee. They have powers to carry out the administration, but must also fulfill legal and fiduciary duties. PRs may also act as trustees of any trust arising following the deceased’s death. They may seek assistance from solicitors in carrying out their duties.
What is the process of applying for a grant of representation in estate administration?
The process of applying for a grant involves initial steps taken following death, determining who will be appointed as PR, options for those who do not wish to act as PR, compliance with Non-Contentious Probate Rules, reporting to HMRC and paying inheritance tax, and completing the application.
What are the steps involved in the collection and distribution of assets in estate administration?
The steps involved in the collection and distribution of assets include collecting the deceased’s assets, paying the deceased’s debts, addressing estate tax liabilities, managing beneficiary tax liabilities, making distributions, and preparing estate accounts. These steps may be carried out in parallel to ensure a smooth administration process.
What are the legal requirements for a personal representative (PR) in estate administration?
Under the Administration of Estates Act 1925, a PR must collect and get in the real and personal estate of the deceased and administer it according to law. The role of a PR is fiduciary in nature, and they must perform all duties in accordance with their duty of care.
What is the difference between an executor and an administrator in estate administration?
An executor is a PR appointed by a person’s will and derives authority from the will itself. They may act from the death of the deceased, and the grant of representation confirms their authority. An administrator is a PR appointed by operation of statutory rules and derives authority from the grant. They have no authority to act until the grant is issued.
What are the powers and duties of a personal representative (PR) in estate administration?
The powers of a PR include collecting and getting in the deceased’s assets, administering the estate according to law, and distributing the assets to the beneficiaries. The duties of a PR include fulfilling their fiduciary duty of care, acting in accordance with legal requirements, and ensuring the proper administration of the estate.
Under what circumstances would a personal representative (PR) also be a trustee of the estate?
A PR will be a trustee of some or all of the estate property if the will expressly appoints executors to act in the capacity of a trustee of any trust arising. Additionally, a statutory trust may arise under an intestacy, in which case the PRs will be the trustees of that trust on behalf of the minor beneficiary.
What is the role of a solicitor when instructed by the personal representatives (PRs) in estate administration?
When instructed by the PRs, a solicitor may assist with the administration if the PRs are unable to carry out the tasks themselves due to time constraints or a lack of technical knowledge or confidence. The solicitor must act on the PRs’ instructions and check the identity of the PRs. The cost of providing legal advice is an administration expense and can be paid using the estate assets.
What is the role of a solicitor when appointed as an executor under a will?
If a solicitor acts as an executor, they become a professional PR and owe duties to the estate, creditors, and beneficiaries. The solicitor may act alone or in conjunction with another executor. The solicitor’s services are charged to the estate, and the testator should be given sufficient information to make an informed decision about the appointment and related costs.
In what situations may a solicitor be involved in contentious probate matters?
A solicitor may be involved in contentious probate matters when the terms or validity of the will is challenged, when a disappointed beneficiary wants to make a claim under the Inheritance (Provision for Family and Dependants) Act 1975, or when the solicitor is acting for the estate PRs or beneficiaries to bring or defend a claim. The solicitor owes a duty to their client in these situations.
What are the key duties of a personal representative (PR) in estate administration?
The duties of a PR in estate administration include providing information about the estate to HMRC and paying any inheritance tax due, collecting and administering the deceased’s estate, and providing an inventory and account of the administration. PRs must administer the estate according to the law, act with due diligence, and complete the administration within the executor’s year (12 months from the date of death).
What are the fiduciary duties of a personal representative (PR)?
The role of a PR is fiduciary in nature, and PRs are subject to fiduciary duties. They are personally liable for loss caused by a breach of duty. PRs have various statutory and common law duties, including reporting to HMRC and paying inheritance tax, administering the estate according to law, and acting with due diligence.
What are the duties of a personal representative (PR) before the issue of a grant?
Before the issue of a grant, the duties of a PR include the common law duty to dispose of the deceased’s body and the statutory duty to provide information about the estate to HMRC and pay any inheritance tax due. The PRs must notify HMRC about the assets and liabilities of the estate and complete form IHT 400. These duties must be complied with before the grant of representation is obtained.
What is the significance of completing the administration of an estate within the executor’s year?
PRs should complete the administration of an estate within the executor’s year, which is 12 months from the date of death. This timeframe is important as it provides a guideline for the efficient administration of the estate. However, the exact duration may vary depending on the complexity of the estate and any unforeseen circumstances.
What are the duties of a solicitor when instructed by the personal representatives (PRs) in estate administration?
When instructed by the PRs, a solicitor should assist with the administration if the PRs are unable to carry out the tasks themselves. The solicitor must act on the PRs’ instructions and check the identity of the PRs. The cost of providing legal advice is an administration expense and can be paid using the estate assets.
What does the duty to ‘collect in’ entail for PRs?
To comply with the duty to ‘collect in’, PRs must identify and locate the deceased’s assets, including sums owed to the deceased, as well as identify the deceased’s liabilities and creditors. They must also obtain control, possession, or legal ownership of the assets.
What is the duty of a PR to administer the estate?
Once assets have been collected in, the PRs must administer the estate in full. This includes keeping the assets secure, paying the deceased’s debts and liabilities, meeting administration expenses, paying legacies, and distributing the residue to those legally entitled.
What is the duty of a PR to provide an inventory and account?
PRs must keep a list of assets and values (inventory) and a record of the steps they have taken in the administration (account). This information is usually recorded in the Estate Accounts. Beneficiaries or creditors may ask to see the estate accounts, and if the PRs refuse or have not maintained adequate records, an application to court for an order to produce an inventory and account may be made.
What is the duty of due diligence for PRs?
PRs are free to make their own decisions about how best to carry out their duties but must always act within the scope of their powers conferred by the will and/or statute. They have a general duty to carry out the administration with due diligence and within a reasonable time. If a breach of duty occurs, the court can make a declaration as to the breach and direct an inquiry as to damages.