Wills 11

Question 1

What are the 3 duties of PRs imposed under law?

Answer 1

• Duty to collect the deceased’s assets* Duty to administer the estate* Duty of care under the Trustee Act 2000

Question 2

What is required under the duty of PRs to collect the deceased’s assets?

Answer 2

• Within a reasonable time, the PRs must collect the monies due and other assets of the deceased which vest in them (usually will need a grant of representation)* The PRs will be liable for loss only if it resulted from their unreasonable conduct. * Note that the duty to collect the deceased’s assets only relates to property which devolves on the PRs, not to assets which pass directly to beneficiaries

Question 3

When will the PRs will be liable for loss to the deceased’s estate?

Answer 3

If it resulted from their unreasonable conduct

Question 4

What is required under the duty of PRs to administer the estate?

Answer 4

• Reasonable steps must be taken to preserve the deceased’s estate (within the ‘executor’s year’ of 12 months) and realise any investments which it is not proper for them to retain. * PRs then pay off debts and legacies and then distribute the residue per the will or intestacy rules.

Question 5

What is required under the duty of care of PRs?

Answer 5

PRs must act with reasonable care and skill, taking account of any specialist knowledge or experience, or what is reasonably expected of them if professional PRs.They must also ensure any professional advisor they engage complies with this standard of careThis is additional to the fundamental duties to:* act in the best interest of beneficiaries and * comply with the terms of any trust imposed

Question 6

When will a PR be liable for breach of duty of care?

Answer 6

PRs may be liable to the beneficaries or creditors for losses arising from their breach of duty- e.g. from * misappropriation of assets, * maladministration, or * negligence.Note, typically, a will excludes PRs’ liability for breach of this duty of care, except for cases of fraud, dishonesty or gross negligence.

Question 7

Is a PR responsible for a fellow PR’s breach of duty?

Answer 7

No, unless negligence is an issue.

Question 8

When can the court relieve a PR from breach of duty?

Answer 8

At its discretion, if it is satisfied that the PR “has acted honestly and reasonably and ought fairly to be excused for the breach”

Question 9

A PR missed the fact that the deceased had a joint account with another person. Despite making reasonable inquiries into the deceased assets, the PR didn’t discover the account, and therefore didn’t include it in the estate assets. Later, a beneficiary sues the PR for not including the account in the estate assets. Is the PR liable for the loss to the estate?

Answer 9

In the actual case these facts apply to, the court dismissed the claim on the basis that the PR had made reasonable inquiries into the deceased’s assets and had been guided by a solicitor in the administration of the estate.