WAE 8 - PR role, powers, duties, liability and protections Flashcards
What is the difference between an executor and an administrator?
- Executor: Appointed by will, authority from the will.
- Administrator: Appointed by court (NCPR) if no executor is named/able/willing; authority from the grant.
What does the grant of representation do?
- Confirms PRs’ authority.
- Confirms validity of the will or intestacy.
- Grants legal authority to deal with succession estate only.
When do PRs become trustees?
- A trust is created under the will.
- Holding estate on statutory trust (e.g., intestacy for minors).
- Will acts as the trust instrument.
What are key responsibilities of PRs?
- Collect in estate, pay debts, distribute residue.
- May act as beneficiary.
Fiduciary role – must act honestly, no conflict/profit. - Must administer within reasonable time (Executor’s year = 12 months).
When can solicitors be involved in administration?
- Instructed by PRs (act for PRs, not beneficiaries).
- Appointed as executor.
- Act in contentious probate disputes.
What duties do PRs have before and after grant?
- Before: Dispose of body, submit IHT info (Form IHT400).
- After: Administer estate under AEA 1925 (collect, pay, distribute).
What is the standard of care for PRs?
- Ordinary PRs: Reasonable care.
- Professional PRs: Higher standard under Trustee Act 2000.
What fiduciary duties do PRs owe?
- No conflict of interest.
- No profit, unless authorised (e.g., s29 TA 2000).
- Must act in good faith.
Can PRs sell or lease estate assets?
Yes, under statutory powers.
But all joint PRs must act together unless otherwise stated.
What is appropriation and when can PRs do it?
PRs may transfer an asset instead of cash if:
* Beneficiary consents.
* No prejudice to others.
* Value assessed at transfer date.
What must PRs do when investing estate assets?
- Follow standard investment criteria.
- Take professional advice.
- Review investments regularly.
Can PRs delegate their powers?
Yes, but cannot delegate decisions about:
* Distribution of assets.
* Fees/income/capital split.
* Appointment of trustees/nominees.
When do PRs appoint trustees?
- To hold a minor’s legacy until 18.
- Parent can give receipt unless will says otherwise.
Can PRs run a deceased’s business?
- If the testator was a shareholder, the company continues after death; provisions in articles of association or shareholders’ agreement will apply.
- If the testator was a business partner, the partnership agreement will determine how the business continues after death.
- If the testator was a sole trader, PRs have a limited common law power to sell the business as a going concern within a year of death.
- PRs can only access business assets at the date of death, not other estate funds.
- PRs are personally liable to business creditors but may indemnify themselves from estate assets for liabilities incurred while managing the business for realisation.
- Express powers in the will are recommended to allow PRs to run/manage the business as per the testator’s wishes.
Can a joint PR act alone?
- Not generally – must act jointly.
- Exception: A joint PR can act alone when selling or transferring an estate asset during administration (e.g., passing title of personal possessions).
- Stocks/shares require all PRs.
When are PRs personally liable?
- Breach of duty (e.g., delay, poor investments).
- Devastavit = wasting estate.
- Liability may extend to co-PRs.
What types of breach can PRs commit?
- Maladministration (wrong distributions).
- Misuse of assets (personal use).
- Negligence (delay or bad investments).
- Fiduciary breach (conflict, profit, self-dealing).
How can a PR be removed?
- Court order under s50 AEA.
- Administration action where court takes over administration.
How can PRs get court protection?
- Apply for court directions (costly).
- Use s48 AJA 1985: act on legal opinion (only applies if no dispute). Opinion given by qualified person.
What does a s27 Trustee Act 1925 notice do?
- Protects PRs from unknown claims.
- Must publish in London Gazette + local paper where asset+ any other appropriate newspaper.
- Wait 2 months before distributing.
What is a Benjamin Order?
- Court order allowing PRs to distribute estate assuming a missing person has died.
- Requires extensive efforts to find missing person.
- Does not protect other beneficiaries.
When can PRs apply under the Presumption of Death Act 2013?
- If person not seen for 7+ years.
- Court can declare them deceased.
- Often faster than a Benjamin Order.
How can PRs protect themselves?
- Insurance (for missing bens or creditors).
- Indemnity from beneficiaries (may be limited by their solvency).
- PRs can pay legacy amount into court and distribue rest of the estate - suitable for when ben is refusing to accept inheritance.
When can PRs avoid liability under s61 TA 1925?
PR can apply for court protection from personal liability if the PR:
* Acted honestly and reasonably.
* Ought fairly to be excused.
* Had no chance to get directions earlier.
Can a will limit PR liability?
Yes, but:
* Cannot exclude fraud/dishonesty.
* May vary protections for lay vs professional PRs.
