Wills 4 - Obtaining a grant

Question 1

Application for grant

Answer 1

His Majesty Courts and Tribunals Service Probate (HMCTS)

Initial assessment -

Identify PRs

Deceased left valid will which appoints executors one or more of whom is willing to act
Executors obtain a grant of probate using form PA1P

Deceased left valid will but no persons able or willing to act as executors.
Administrators obtain grant of letters of administration with the will annoyed (form PA1P)
NCPR 1987 r 20 determines administrators (usually residuary)

Deceased left no will or no valid will -
Administrators obtain grant of (simple) letters of administration using form PA1A.
NCPR r22 determine administrators (usually main beneficiaries on intestacy)

One PR may get grant alone. Even if land.
Administrators required where minor interest
Compared to trustees where need two or trust corporation for land.

Authority of PRs
Grant of probate confirmation,s.
Conclusive evidence of title to assets and validity and contents f will

Administrators -
limited powers, stems from grant which is not retrospective. Vests property. Provides conclusive evidence of title to assets and validity of the will

Question 2

Beneficiaries

Answer 2

Check will valid.

To check;
last will
not validly revoked
executed in accordance with s9
contains attestation clause which indicates will executed in accordance with requirements of Wills Act 1837 (presumption of due execution).

GDPR - solicitor enquires on beneficiaires, lapse etc..
Must inform they are holding personal data on them and rights

Solicitor asks PRs for assets and any associated documents.
Life policies by writing to asset holders.
Unqouted shares from an accountant to assess value.

Question 3

Assets which may pass without a grant

Answer 3

Payment can be made to persons appearing to be beneficially entitled.
Not above £5,000.
Discretionary.

From
Money in National Savings Banks and Trustee Savings Bank
National Saving Certificates and Premium Bonds
Money in buildings societies and friendly societies
Chattells
Cash

Question 4

Assets not passing through PRs hands

Answer 4

Joint property

Pension benefits
e.g. death in service benefits

Question 5

Assessment of IHT position

Answer 5

Before apply for grant send IHT account IHT400 and pay due before grant to HMRC.

HMRC emails receipt (IHT421) to HMCTS and informs PRs has been done.

Grant not issued until HMCTS receives receipt.

Interval of 20 working days between submission of IHT400 and application for grant

Question 6

Preparing application for grant

Answer 6

Application ad fee -
grant of probate - online

Grants of letters of administration - by post but made online if certain conditions fulfilled (only one application, only person entitled).
PA1P if will, PA1A if not.

Fee by cheque

Firm must open HMCTS payment by account.
£273 where estate exceeds £5,000.
No fee is less.
One free copy
EXTRA COPIES £1.50

Additional documents -
send will and codicil.
may require further evidence - affidavit by solicitor not acting for.

Evidence of due execution and or capacity
If no attestation clause, or circumstances raising doubt.
Registrar require evidence - affidavit.

Evidence as to knowledge and approval -absence of attention that read to testator
affidavit or witness statement by someone who can speak as to facts.

Evidence as to remote witnessing -
if no attestation
affidavit or witness statement by anyone present

Evidence of plight and condition -
if condition suggests interfered with -
affidavit or witness statement by someone having knowledge of facts.

Lost will -
known to be in possession but cannot be found. Presumed destroyed
If lost or accidentally destroyed - probate may obtain copy kept on file (application made with evidence to Registrar).

Question 7

IHT 400 required

Answer 7

Send IHT 400 to HMRC before grant, Wait 20 working days for HMRC to send receipt (IHT 421) to HMCTS.
Apply for grant or send PAIP or PA1A as appropriate to HMCTS.
Will and codicil
Additional evidence
Probate fee

Question 8

Excepted estate

Answer 8

Apply for grant online or send PA1P or PA1A to HMCTS
Will and codicil
Additional evidence
Probate fee

Question 9

IHT account

Answer 9

If not excepted IHT 400.
IHT 401 for outside UK.
Supporting schedules (e.g. lifetime gifts schedule 403).

12 months of end of month in which death occurred.
Usually aim for 6 due to interest.

Until account submitted no grant obtained.

IHT payable apply for reference number.

if excepted no form.

HMRC has 60 days from issue of grant of representation to ask for additional information. If not automatic clearance.

If found out estate not excepted - pRs have six months within discovery to submit IHT400

Question 10

Excepted estates

Answer 10

On or after 1 January 2022

Cat 1 - Small estates -
gross value of IHT purpose plus specified transfer and specified exempt transfers in seven years prior to death does not exceed NRB.
Gross value before debts, exemptions and reliefs.

NRB can be increased by civil partner. Unused percentage if predeceased.

Require the following -
deceased died domiciled in UK
value of estate attributable wholly to property passing;
-under will or intestacy
-under nomination of an asset taking effect on death
-under a single settlement in which he was entitled to an interest in possession in settled property or
-by survivorship in joint tenancy, or Scotland special destination.

Of that property
-not more than £250,000 represent property which immediately before death was settled property and
-not more than £100,00 represents property situated outside the UK

The deceased made no chargeable transfers in seven years before death other than specified transfers where aggregate value transferred (ignoring BPR and AR) did not exceed £250,000 and

aggregate of
gross value of estate plus
value transferred by any specified transfers plus
value transferred by any specified exempt transfers did not exceed the NRB (or increased for spouse).

‘Specified transfers for CAT 1 and 2)-
Chargeable transfers of cash, personal chattels or tangible movable property, quoted shares or securities or an interest in or over land (unless settled ie. trust property in which had a life interest) made in seven years before death.

IF MADE GIFT OUTSIDE SPECIFIED TRANSFERS SUCH AS UNQUOTED SHARES CANNOT BE EXCEPTED UNDER CAT 1 OR 2

Specified exempt transfers for Cat 1 and 2 -
Transfers of value made during seven years before death which are exempt under one of the following exemptions
- transfers between spouses
-gifts to charities
-gifts to political parties
-gifts to housing associations
-maintenance funds for historic buildings
-employee trusts

Gifts which are exempt under normal expenditure out of income expenditure treated for purpose as chargeable if exceed £3,000 in one tax year.

Question 11

Category 2 ‘Exempt Estates’

Answer 11

Estates where bulk of estate attracts spouse or charity exemption.

Gross value of estate (plus specified transfers and specified exempt traders made in seven years before death) must not exceed £3million and

net chargeable estate after deduction of liabilities and spouse or charity exemption (plus ST and SET) must not exceed NRB

Transferred NRB can increase threshold.

Requires
-domiciled in UK
-value of estate attributable wholly to property passing
-under will or intestacy
-under nomination of an asset taking effect on death
-under a single settlement in which he was entitled to an interest in possession in settled property or
by survivorship in joint tenancy or Scottish special destination
of that property
chargeable trust property included in estate does not exceed £250,00 and total amount of trust property including exempt amount does not exceed £1million. and
-not more than £100,00 represents property situated outside the UK
-deceased made no chargeable transfer during period of seven years ending with death other than specified transfers where aggregate value transferred did not exceed £250,000
-aggregate of
gross value of that persons estate plus
value transferred by specified transfers made by person plus
value transferred by any specified exempt transfers did not exceed £3million. there is property left after deduction of liabilities to pass to spouse or charity
-aggregate of
value of estate after deducting allowable liabilities, spouse and charity exemptions
plus
specified traders plus
specified exempt transfers did not exceed NRB (accounting for spouse increase).

Question 12

Category 3 - non domiciled estates

Answer 12

Never domiciled or treated as domiciled in the UK, owned only limited assets in UK

Question 13

Procedure for excepted estates

Answer 13

PRs provide no info directly to HMRC.

Instead include following on gnat
-decease full name and DOD
-declaration that estate excepted and whether claiming against estate unused proportion of IHT of pre-deceased spouse.
Following three IHT estate values -
gross value for iHT plus any specified transfers and specified exempt transfers made by deceased in seven years before death
Net value of IHT less allowable debts
Net qualifying value of estate, net value of estate less any spouse or charity exemptions

HM courts and Tribunals Service will have one month to pass information to HMRC>

Non-UK domiciles more information required.

HMRC select random sample to review within 60 days of application for grant.
Will use other information sources to identify estates nearer to IHT threshold where risk IHT may be payable

Question 14

IHT 400

Answer 14

Used where domiciled in UK and not excepted estate.

Completed IHT400 and supporting information to HMRC.

Pay

IHT due before grant.
HMRC email receipted summary (IHT421) to HMCTS and inform PRs done.
grant not issued until HMCTS receives receipt.
Should allow 20 working days from sending IHT400 before applying for the grant.

Application blocked if not waited.

Question 15

Paying IHT

Answer 15

General rule - six months after end of month in which died.

IHT on non-instalemnt property due with six moths but IHT on non-instalment option property paid before the grant.

IHT payable on estate apportioned between instalment and non-instalment option using estate rate formula.

Question 16

Funding IHT

Answer 16

Direct payment scheme - HMRC
voluntary
Prs procure IID require
PRs complete IHT423 for each bank
PRs send each IHT423 to relevant bank or building society at same time they send IHT400 and schedules to HMRC.
Provides reference number
Send money to HMRC.
One HMRC happy send IHT421 to HMCTS and notify solicitor.

• Not quick, private arrangements better

Life assurance -
Ask them

Assets releasable without production of the grant -
£5,000
discretionary

Loans from beneficiaries -
on condition repaid.
Or beneficiarieis already have assets (jointly held banks, or life policy)

Bank borrowing -
lend against undertaking to repay loan.
May also need from solicitor.
‘Such proceeds as come into control’
Expensive (interest)

National Savings and Government stock -
made from NS bank account or proceeds of national savings certificate, any government stock held on National Savings Register or any other National Savings investment

Heritage property -
Secretary of State must agree to accept such assets and standard required is high.
‘Pre-eminent for its national scientific, historic or artistic interest.

Obtaining grant on credit -
If impossible to pay and can demonstrate, HMRC allow

Question 17

Forms PA1P and PA1A

Answer 17

PA1P
grant of probate if will and executors
letters of administration with will annexed (no executors willing or able to act)

PA1A -
no will and died intestate.

Have in common;
To establish rights to take grant

Applicants - identifies applicants. If name differs from will both names written

Deceased - forms identify deceased by name, address, DOB and date of death, with marital status and domicile at date of death,
If known by more thane name included if held assets in another name.

Settled land -
asks whether land vested in deceased, which was previously settled to their death and which remained sealed land notwithstanding their feasth.

Application as an attorney -
If lack capacity, medical evidence.

iHT form and probate state -
final questions relate to value of assets.
Must state whether IHT400 or IHT421 completed.
If not because excepted must provide;
-gross value of estate for IHT plus specified transfers and specified exempt transfers in seven years before death
-net value of estate for IHT less allowable debts
-net qualifying value of estate, net value of estate for IHT less any spouse, civil partner or charity exemptions.

Determines probate fee payable.
Includes only property vesting in PRs.
Reliefs not relevant.

Legal statements -
both end with statement of truth.
Confirm they will administer in accordance to law and content is truthful.
Criminal proceedings for fraud acknowledged.
Legal representative sign where authorised either a type of handwritten statement.
Signs next to their name.
Grant issue in name of applicant.

Question 18

Executors applying for grant of probate

Answer 18

Form PA1P

Identification of will -
original will and codicils sent to HMCSTS.
Date must be entered (of will and codicil)
Details of foreign wiki
Asks whether deceased married after will

One executor may act alone - even if land or infant beneficiary

Executor lacking capacity -
cannot apply for grant.
Other executors deal with
If one - that persons attorneys
If minor - power reserved to them.
If not completed by age of 18 -
application for grant of double probate to act as executor alongside.
If only minor - parents - grant of letters of administration with will annexed for use and benefit of minor.
On obtaining majority - executor may apply for cessate grant of probate.

Renunciation -
can renounce if not intermedled .
Must take grant if intermeddled
Renunciation using form PA15 signed by person renouncing filed with HMCTS.
Will remain trustees if appointed as trustees.

Power reserved -
no limit to executors by will.
Granted to only four executors in respect of same property.
Power may be reserved to others to take grant out if vacancy arises.

Can take grant limited to part (four and four on other) - if special knowledge required.

Question 19

Administrators applying for grant of letters of administration with will annexed

Answer 19

Valid will, but no executor willing and able to act.

Entitlement to the grant - NCPR 1987 r20 -
-the executor
-any residuary legatee or devisee holding in trust for any other person or where residue not disposed any person entitled to share undisposed of residue (including Treasury Solicitor when claiming bona vacant)
-unless registrar directs otherwise residuary legatee or devisee whose legacy or devise is vested in interest shall be preferred to one entitled on contingency.
where residue is not in terms wholly disposed of registrar may if satisfied testator has nevertheless disposed of wholly or substantially whole of known estate allow a grants to be made to any legatee or devise entitled to or to share in the estate so disposed of without regard to persons entitled to share in any residue not disposed of by the will
-PRs of any residuary legatee or devisee (but not one for life or one holding in trust for any other person) or of any person entitled to share in any residue not disposed of by the will
-any other legatee or devisee (including one for life or on holding in trust for any other person) or any creditor of the deceased provided that unless a register otherwise directs a legatee or devisee whose legacy is vested in interest shall be preferred over contingency
-the PRs of any other legatee or devisee (but not one for life or one holding in trust for any other person) or any creditor of the deceased.

Lower may apply only if nobody in higher category willing to take the grant .Applicant must explain basis of entitlement by explaining why nobody in higher willing to take.

Minors cannot act as administrators, nor apply for grant. Others in category will apply. If no such, minors guardians.

Where life interest or property passes to minor - requires two minimum to apply .

Not more than four in relation to same property.
Not possible for power reseed to prove at later stage, where two or more entitled in same degree, grant can be made on application of any one of them without notice to the others.

Renunciation - can renounce in same way as executor (Form PA16), does not lose right once intermeddled.

Question 20

Administrators applying for grant of (simple letters of administration)

Answer 20

Form PA1A.

NCPR 1987 r22 -
Same as entitlement on intestacy

(1) Where the deceased died on or after 1 January 1926, wholly intestate, the person
or persons having a beneficial interest in the estate shall be entitled to a grant of
administration in the following classes in order of priority, namely:
(a) the surviving spouse or civil partner;
(b) the children of the deceased and the issue of any deceased child who died before
the deceased;
(c) the father and mother of the deceased;
(d) brothers and sisters of the whole blood and the issue of any deceased brother or
sister of the whole blood who died before the deceased;
(e) brothers and sisters of the half blood and the issue of any deceased brother or sister
of the half blood who died before the deceased;
(f) grandparents;
(g) uncles and aunts of the whole blood and the issue of any deceased uncle or aunt of
the whole blood who died before the deceased;
(h) uncles and aunts of the half blood and the issue of any deceased uncle or aunt of the
half blood who died before the deceased.
(2) In default of any person having a beneficial interest in the estate, the Treasury Solicitor
shall be entitled to a grant if he claims bona vacantia on behalf of the Crown.
(3) If all persons entitled to a grant under the foregoing provisions of this rule have been
cleared off, a grant may be made to a creditor of the deceased or to any person who,
notwithstanding that he has no immediate beneficial interest in the estate, may have a
beneficial interest in the event of an accretion thereto.

Step-children and step-brothers not entitled to any property on intestacy.

Take grant only if nobody in higher categories.
Explain why nobody in higher (clearing off) can take.
State matter of course whether deceased left spouse or other relatives.
Applicants relationship to deceased.

Unless Treasury Solicitor or creditor must have beneficial interest in estate by virtue of intestacy rules.

Minors - cannot act nor apply

Number of admins - max of four.
Not possible for power reserved to non-providing administrator.
Where two or more entitled in same degree, grant made without notice to other
Min of two where minority interest held on statutory trusts.
Court may dispense with need for tow in special circumstances.

Renunciation -
Can renounce right in same way as administrator with will annexed. Does not affect beneficial entitlement.

Question 21

Rights of beneficiaries and liabilities of PRs

Answer 21

-

Question 22

Rights of beneficiaries

Answer 22

a) Preventing issue of grant -
dispute over will etc..
Lodge caveat at HMCTS.
No grant can be issued until caveat removed or ceases to be effective.
Online using form PA8A.
Last for six months - can be extended
Application for grant issue warning - if not appeared in 14 days setting out interest overrides.

b) Compelling issue of the grant -

Citation to take probate -
lost right to renounce but not administered (intermeddled)
Apply to court for order allowing executor to be passed over and grant letters of admin with will annexed to next person under r20

Citation to propound will -
may be a will to diminish their entitlement under earlier will or intestacy.
Cite executors in will and any person interest.
If fail to enter an appearance or proceed diligently can apply to court for order for grant as if will was invalid.

Citation to accept or refuse a grant -
standard method for clearing off person with prior right to any type of grant who has not applied.
If do not take steps, grant may be issued to the citron.

c) Passing over -
S116 Senior Courts Act 1981 -
passing over in favour of someone else.

d) Right to compel due administration

Unlike trusts - beneficiary do not have equitable interest, PRs vested with legal and equitable.

Accounts and information -
PRs must keep accurate records of receipt and payment.
B can ask to inspect.
If refuse
Apply to court compelling to provide inventory and accounts (s25 AEA 1924)
At end PRs must prepare estate accounts - showing all assets, income and payment made.
Estate accounts sent to residuary beneficiaries who asked to sign receipt approving accounts and discharging PRs from further liability.
Similar to trusts - no automatic disclosure for reasons behind.
If refuse can apply to court.
May still be subject to subject access request

Administration proceedings -
brought by anyone interest in the estate

Two categories;

Applications limited to a particular issue - non-contentious e..g seeking guidance

Applications for a general administration order -
court supervises PRs, cannot exercise powers without permission. Last resort
Or
Court appoint judicial trustee.

Executors year -
Not bound to distribute before expiration of one year from date.
Applies to administrators as well.
Can then call to administrate

Question 23

Actions against PRs for breach of duty

Answer 23

a) breach of fiduciary duty -
Conflict between personal interests and duties.
Must account for unauthorised profit.
If purchase property from estate, transaction voidable within a reasonable time.
profits may be authorised in a will, ac court order, or contest of all Bs aged 18 or over.

• Destavit -
  caused loss by breach of duty.
  Have to pay out of own resources.
  Misuse of assets
  Maladministration
  Negligence

Defences -
S61 Trustee Act - court has discretion to totally or partially relieve if acted honestly, reasonably and ought fairly to be excused for the destavist and for omitting to obtain courts directions.

May escape by exclusion clause in the will.

Acquiescence of beneficiaries -
Adult beneficiary, with full knowledge of the facts consented to a PRs breach of duty cannot claim.

Protection against unknown or missing claimants -
Personally liable if omitted beneficiary brings a claim.
Protected if -
Placed advertisements and followed procedures in s27.
Does not protect against Bs who are known to have existed but cannot be found (missing).
Should have obtained Benjamin order, insurance or indemnity from Bs.
Does not protect successful family provision claimant.
To protect - wait at least six months from date of grant.

Limitation - 12 years from date on which right to receive estate accrued.
No time limit for fraudulent breaches of duty.

Following and tracing assets -
Proprietary claim - unless bona fide purchases without notice.

Removal of PRs - cannot be forced to accept office, can renounce right.
Office for life unless court removes.
Court has discretion to remove under s50 .
Discretion to replace with others or simply terminate an appointment without replacement.
Must ensure at least one PR remaining
Main factor - welfare of Bs

Rights of creditors -
PRs take on all debts and liabilities.
Causes of action against deceased continue against PRs.
Liable only to extent of deceased assets.
Limitation - six years.
May be personally liable for creditors for desttavist - for loss of assets caused by breach of duties.
Personally liable.

Transition from PRs to trustees -
trustee can retire where PRs cannot do sow without court.
Real estate - PRs mark transition by executing an assent to themselves as trustees when finished administration by paying debts and distributing assets.