Wills (Pre-Grant Administration)

Question 1

What does a PR do?

Answer 1

• Collect and get in the real and personal estate of the deceased
• Ensuring the deceased’s debts are paid
• Ensuring outstanding tax liabilities are met
• Distributing assets to beneficiaries under the will or intestacy.

Question 2

What is the difference between an Appointed Executor and Administrator (NCPR)?

Answer 2

• A PR appointed by will is an executor.
• Where there is a will but no executor appointed, a PR appointed by NCPR will be known as ‘Administrator’ whose authority derives from the grant.

Question 3

What is the relationship between PRs and Trustees?

Answer 3

• A PR is not automatically a trustee.
• When a PR finishes administration, their role is complete, and any continuing trusts created transferred to the trustee.
• The PR should record the date on which estate assets are transferred to the trustees (even if they are a trustee).

Question 4

What are the exceptions to PRs not being trustees?

Answer 4

Despite a PR not automatically being a trustee, there are exceptions…

• the will expressly appoints the executors to act as trustees of any trusts arising;
• in intestacy - the PRs hold the estate generally ‘on trust with a power to sell’ per s.33 ARA;
• a statutory trust arises under intestacy: PRs will be trustees on behalf of minor beneficiaries per s.46 AEA.

Question 5

What is the role of solicitors in relation to PRs?

Answer 5

Solicitors may be instructed by lay PRs if they are unable to carry out the administration (e.g. time constraints).

In this case, the PR is the firm’s client, and the solicitors act on the PR’s (not beneficiaries) instructions.

A solicitor can be appointed as an executor by a will. If a solicitor acts as executor, they will be professional PRs

Question 6

What are the three types of grants?

Answer 6

• A grant of representation is a court order confirming the authority of those named in it to administer the estate.
• Grant of Probate
• Grant of Letters of Administration with Will
• Grant of Letters of Administration.

Question 7

What is a Grant of Probate?

Answer 7

Required where

• the deceased left a valid will
• the will appointed executors
• at least one of the executors appointed is going to act.

It is issued in the name(s) of the executors who apply. It is required even if the will does not dispose of any/all of the property.

Question 8

What is a Grant of Letters of Administration with Will?

Answer 8

Appropriate where the deceased left a valid will, but the** will appoints no executors who are willing/able to act**.

Administrators are appointed under NCPR. Rule 20 applies and lists, in order of priority, those entitled to apply for the grant.

Question 9

What is a Grant of Letters of Administration?

Answer 9

Appropriate where the deceased died without a valid will (died intestate).

Administrators are appointed under NCPR. Rule 22 applies and lists, in order of priority, those entitled to apply for the grant.

Question 10

When is a grant not required?

Answer 10

No grant is required to deal with assets that fall outside the succession estate + three exceptions that fall within the succession estate but do not require a grant of representation:

1. Assets under Small Payments Act;
2. Personal Household Possessions; and
3. Cash.

Question 11

What is the Small Payments Act?

Answer 11

The following payments can be made to persons who appear to be beneficially entitled without formal proof of title from the following assets:

• National Savings (bank accounts, premium bonds)
• Friendly, Industrial and Provident Society Accounts
• Arrears of salary and wages
• Pensions where member of police, fire, air force, army
• Building society accounts.

There is an upper limit of £5,000 per asset. **If the value of the asset is greater than £5,000, a grant is needed for the whole sum **(not just for the amount above £5,000).

Question 12

What are Personal Possessions & Cash?

Answer 12

Title to personal household possessions passes by delivery and proof of ownership is not required when sold

PRs are usually able to dispose of chattel without formal proof of authority.*

Likewise, a PR does not need a grant to take possession of cash found at the deceased’s home.

Question 13

What is property not devolving on PRs?

Answer 13

Assets which pass outside the succession estate do not devolve on the PRs and do not require a grant to be released. However, PRs will need to show a death certificate and any other information required by the asset holder for these assets.

• Property owned as joint tenants in common - the Land Registry/Bank will transfer title into the name of the surviving owner automatically;
• Life Policies written in trust, discretionary pension lump sums nominated for a 3rd Party and other nominated assets - on production of death certificate, these funds will be payable to the beneficiaries;
• Death bed gifts - the deceased transferred ownership during their lifetime;
• Assets held in trust in which the deceased had an interest - Trustees should be notified of the death and trust deed will determine what happens.

Question 14

What are the preliminary steps for a Grant application?

Answer 14

• PR may register a death but this is likely to be done by the family
• PRs need official copies of the death certificate to send to institutions holding assets (e.g. banks).
• Government organisations can be notified of the death via a centralised service when registering death (e.g. HMRC).

Question 15

What should PRs do to secure estate assets?

Answer 15

• PRs have a duty to** preserve the value of the estate**.
• PRs may be personally liable to account for loss or damage to the estate assets and should take steps to ensure safety.

Question 16

What should PRs do to locate the Will and Codicils?

Answer 16

• PRs should obtain the original will and codicils -** a copy will not suffice**.
• If it appears the deceased died intestate, the PR should verify this by making enquiries. If a valid will has been lost, appropriate steps must be taken to reconstruct it.

Question 17

What should PRs do regarding the basis of distribution and identifying beneficiaries?

Answer 17

• The PR and codicils should be used to identify beneficiaries.
• The PR should provide a realistic timescale for distribution.

Question 18

What should PRs do for a schedule of assets and lifetime transfers?

Answer 18

The PR must compile a list of assets and liabilities to identify estate assets, creditors, calculate IHT, and establish who is entitled to what.

The following are principles of valuation:

• Bank Account - PR should request summary of account balance on date of death + interest accrued;
• Joint Account - Establish proportion owned by deceased (often presumed 50/50);
• Low Value Chattel: Estimate their value - probate value (if sold) is often lower than value for insurance (replacement);
• Single items worth more than £500 (or usual items) - a formal probate valuation should be obtained;
• Land: instruct estate agent for valuation (often multiple for average value).

Question 19

What is the entitlement to the grant for Executors?

Answer 19

Entitlement to act as executor derives from the will. All executors appointed by will are entitled to take out the grant of probate subject to number restrictions.

Question 20

How manu people can be executors?

Answer 20

• Only one executor is required
• The testator may appoint as many executors and they like.
• Maximum of four people can be named on the grant. If more than four are appointed in the will, they must decide who takes out grant.

Question 21

What if the number of PRs fall below the minimum needed (e.g. due to deaths)

Answer 21

If no PR remains, there are two options:

(1) chain of representation applies; or

(2) a grant of letters of administration de bonus non is issued.

Question 22

What is a Chain of Representation?

Answer 22

If the last surviving executor (E1) dies, having appointed an executor of their own estate, if this person can take out the grant of probate for E1s estate (E2) , they becomes (automatically) the executor of the original testators estate, as well as for E1s estate.

No additional grant is needed.

Question 23

What is the entitlement to the grant for Administrators?

Answer 23

Administrators are PRs appointed under the Non-Contentious Probate Rules 1987 (NCPR)

Question 24

How many administrators are needed?

Answer 24

• One administrator is required, unless any part of the estate is passing to a minor beneficiary or is to be held in life interest trust (two are then require)
• If two are required, but only one is able or willing, that person may apply for the grant with someone from the next category of entitlement.
• **A maximum of four applications can apply. **

Question 25

What is the significance of the grant for creditors and beneficiaries?

Answer 25

The grant serves as evidence of the PR’s authority to administer the estate and is often required to access assets, pay debts, and distribute to beneficiaries. Creditors may need to see a grant before they can claim from the estate.

Question 26

What is the Order of Priority a grant of for Letters of Administration (with will)?
NCPR 20

Deceased left a valid will but there are no executors willing or able to act

Answer 26

• Executor
• Trustee of Residuary Estate
• Any Residuary Beneficiary (or if intestacy, a beneficiary of the estate under intestacy)
• The PRs of anyone in (c) other than a trustee or life tenant in residue
• Any other beneficiary or creditor
• PRs of anyone in (e)

The applicant must explain why anyone with a better right to apply is not doing so (clearing off)

A person in one category cannot apply if anyone in a higher category is able and willing to act as administrator.

Question 27

What if someone has equal rights within the same category for a grant of letters of representation?

Answer 27

Those in the same category have equal rights to apply. For example, if there are three residuary beneficiaries (and no executor or trustee of residuary estate) all three beneficiaries have equal rights to apply.

Question 28

If the deceased died without a will (NCPR 22) what is the order of priority?

Answer 28

• Surviving spouse or civil partner
• Children of the deceased *
• Father and mother of deceased
• Whole blood siblings
• Half blood siblings
• Grandparents
• Uncles & Aunts of whole blood
• Uncles & Aunts of half blood

Thus is the intestacy priority order

Question 29

Under NCPR 22, what must applicants show for a grant?

Deceased died without a valid will.

Answer 29

The nature of their familial relationship with the deceased and that they have **beneficial entitlement **under the estate.

If they do not have such a beneficial entitlement, and no one in the order of priority has such a beneficial entitlement, they can apply but so can persons with no immediate entitlement

Note, it isn’t just about the relationship but about entilment nder the will!!

Question 30

What if an executor is unwilling or unable to act?

Answer 30

If an executor is unable to act, the remaining executors can apply for the grant of probate but need to explain to the Registry why it is the others are not applying.

Question 31

What must an unwilling executor do?

Answer 31

(1) Renunciation
(2) Reserving Power
(3) Appointing an Attorney

Question 32

Can an administrator with the best right to apply under NCPR 20 or 22 act to NOT ACT?

Answer 32

Yes, as an executor, they can renounce or appoint an attorney.

**Unlike an executor they cannot reserve power **

Question 33

What does it mean for an executor to renounce?

Answer 33

• Formally give up their right to apply for probate and administration continues without them.
• The executor must **sign a form **of renunciation.
• Those applying, must submit the renunciation form to the probate registry as evidence.
• Renunciation is final and irreversible without court approval

IMPORTANT - An executor cannot however renounce if they have intermeddle with the estate.

Question 34

What is intermeddling?

Answer 34

• The executor has taken steps indicating they accepted their appointment.
• For example by obtaining, receiving or holding the deceased assets or disposing of such property.
• However, common humanity acts are not intermeddling (e.g. arranging a funeral or securing the estate).

Question 35

What if an executor reserves power?

Answer 35

An executor may wish to retain the option to apply for probate later by reserving the power to do so.

• To reserve, there must be at least one other executor who does take out the grant of probate.
• **An executor who has intermeddle can still reserve power. **
• To act later, **the executor must apply for grant of double probate to run concurrently. **

Question 36

Can executor appoint an attorney instead of acting as PR?

Answer 36

Yes - power can be given in two ways:

1. After the executor has obtained grant, they can delegate to an attorney for a maximum of 12 months that can later be renewed; or
2. Before a grant has been obtained, if other executors apply, the executors would apply for grant of probate whilst the attorney makes a parallel application for letters of administration (with will)

Question 37

What is the duty of the PRs regarding reporting to HMRC and payment of IHT?

Answer 37

The PRs of an estate have a duty under s.216 ITA 1984 to (i) deliver an account to HMRC regarding the deceased’s estate; and (ii) pay any IHT due.

Question 38

What should PRs include when delivering an account to HMRC?

Answer 38

PRs should deliver an account to HMRC specifying:

• the property comprising the deceased’s taxable estate immediately before death,
• the value of each item at the date of death
• the exemptions and reliefs that apply.

Question 39

What form is used to submit the report on assets and liabilities?

Answer 39

The report on assets and liabilities is submitted in form IHT 400 unless excepted.

Question 40

What happens if the estate is excepted regarding the IHT 400 submission?

Answer 40

If the estate is excepted, the PRs are not required to submit the complex IHT 400; rather, they provide information as part of the grant of representation which is sent to HMRC.

Question 41

What should be done if there are inaccuracies in IHT 400?

Answer 41

If there are inaccuracies in IHT 400, revised information should be sent to HMRC using Form C4.

Question 42

What are Professional Applications?

Answer 42

Professional Applications are applications made by solicitors or probate practitioners often as a result of being appointed as PRs or instructed by PRs to submit applications on their behalf.

Question 43

How are most grants of probate submitted?

Answer 43

Most grants of probate must be made online (mandatory) and cannot be submitted using PA1A or PA1P.

Question 44

What do mandatory paper applications include?

Answer 44

Mandatory paper applications include non-standard grants and complicated NCPR 20 and 22 grants including:

• second grants
• grants to PRs under Chain of Representation
• grants where the original will is missing or with issues
• grants to Attorneys
• grants under NCPR 20 with life interests.

Question 45

What forms are used for paper applications?

Answer 45

PA1A is for cases where the deceased did not leave a will (NCPR 22 applies)

PA1P is for cases where the deceased left a** valid will**.

Try to remember P for Prepared - pa1[P]repared with a will. Whereas pa1(A)nnoying

Question 46

What do all applications require?

Answer 46

All applications require

• confirmation of the identity of the deceased and applicants
• justification of the type of grant requested
• entitlement to act as PR.

Question 47

What information is needed about the estate value in an application?

Answer 47

Provide the value of the gross and net estate passing under the grant (succession estate).

Question 48

What is required regarding inheritance tax status in an application?

Answer 48

Confirm IHT was completed and **provide the HMRC issue code **and estate value.

Question 49

What fees are involved in the application process?

Answer 49

• Pay registry fee - amount varies;
• No fee for estates worth less than £5000**
• A certified copy of the death certificate must be provided.

Question 50

When applying for a granrt, what must be provided if a valid will exists?

Answer 50

If a valid will exists, provide the original will and codicils.

Question 51

What form should be included if an executor wishes to renounce?

Answer 51

An executor appointed by will wishing to renounce should complete a form of renunciation and include it.

Question 52

What details must be provided when appointing an attorney?

Answer 52

Where an executor or beneficiary appoints an attorney to make an application on their behalf, details must be provided in the application, and Form PA11 must be completed.

Question 53

What is an affidavit?

Answer 53

An affidavit is a formal written statement of fact signed under oath that the contents are true.

Question 54

What must an affidavit include?

Answer 54

An affidavit must be signed by all parties and dated, completed and signed by the person witnessing (solicitor or commissioner for oaths), with their name, address, and qualification stated.

Question 55

When might an affidavit be needed?

Answer 55

An affidavit may be needed if there is a valid will but something about the document renders its validity or interpretation uncertain.

Question 56

What is an Affidavit of due execution?

Answer 56

An Affidavit of due execution (s.9 formalities) is used where the PR believes the will is valid but it is unclear if the execution requirements set out in s.9 Wills Act are complied with.

Question 57

What is an Affidavit of due execution (Knowledge)?

Answer 57

An Affidavit of due execution (Knowledge) is used where a will is properly executed but there is reason to doubt the presumption of knowledge.

Question 58

What is an Affidavit of due execution (date)?

Answer 58

An Affidavit of due execution (date) is used where the date may be missing, incomplete, or multiple dates used.

Question 59

What is an Affidavit as to alterations?

Answer 59

An Affidavit as to alterations is submitted if the physical condition of the will raises problems, such as a scribble over a signature that may indicate a revocation.

Question 60

What is an Affidavit of plight and condition?

Answer 60

An Affidavit of plight and condition is signed by someone confirming the condition of the will when executed.

Question 61

What is an Affidavit of search?

Answer 61

An Affidavit of search is submitted if there is evidence to suggest a testamentary document was meant to be attached, confirming what inquiries were made.

Question 62

What can be done if the original will is missing?

Answer 62

If the original will or codicil cannot be located, NCPR 54 permits a copy to be admitted with a court order, and an affidavit may be used when applying to court for an order confirming the copy accurately records the wishes.

Question 63

If a gift of residue fails, and there is no substitution clause, when won‘t there be a partial intestacy?

Answer 63

If a gift of residue fails, and there is no substitution clause, remember that s.33 applies so that the residue passes to surviving grandchildren in equal shares. However, if s.33 is disapplied, there will be a partial intestacy.

Question 64

Aside from a beneficiary witnessing a will, when will the witness result in the invalidation of a gift?

Answer 64

When it comes to witnessing wills (per s.15) a beneficiary or spouse/civil partner of a beneficiary cannot witness a will.

If they do, they lose their legacy/gift under the will.

However the rest of the will remains valid.

Note, it is only beneficiary and their spouse. Other family relationships (e.g. daughters) do not impact witnessing.

Question 65

Can executors charge for their time?

Can they claim reasonable expenses?

Answer 65

Executors can only charge for their time if….

(a) they are professional executors; or (b) the will allows for it.

If neither (a) or (b) apply, the executor can only claim for reasonable expenses.

Remember, every type of executor can charge for reasonable expenses incurred

Question 66

Does arranging a funeral constitute intermeddling?

Answer 66

Arranging a funeral does not constitute intermeddling.

Question 67

If you renounce, do you always have to be included in the grant application and reserve a future power?

Answer 67

No.

If you renounce, you do not need to be included in the grant application nor reserve your power.

However, if you wish to be involved in the future, you may reserve power.

Question 68

If a beneficiary is known but missing, how best can an executor/administrator protect themselves?

Answer 68

By….

(a) making an application for a Benjamin Order;

(b) Pay the share into court; or

(c) Claim beneficiary insurance.

You do not need to apply for a Benjamin Order, insurance is usually the better option.

Note however that if the question asks about ‘removing liability’ the answer would be a Benjamin Order.

Question 69

How to value a portfolio of quoted shares?

Answer 69

Quarter up rule

Take one-quarter (25%) of the difference between the highest and lowest valuations of the shares on the date of death, added to the lowest value.

Question 70

An estate has a liability to inheritance tax.

The assets of the estate include a bank savings account which contains enough to pay half of the inheritance tax

How should the PRs proceed?

Answer 70

The bank should be asked for a cheque payable to HMRC or direct payment to HMRC and the executors should arrange a loan to pay the remainder.

Question 71

An estate with a value of more than £3,000,000 passes to a spouse. No IHT is due.

Is Form IHT 400 required?

Answer 71

Yes

Whilst there is no tax to pay, it is higher than the £3,000,000 limit.

IHT400 needs to be completed.

Question 72

When will HMRC allow a grant on credit?

Answer 72

It is possible to obtain a grant without first paying the IHT which is due on the IHT400.

In exceptional cases, HMRC will permit PRs to obtain a grant without paying the IHT first. This will not be granted if it will be possible to use one of the other options to raise money to pay the IHT.

However, it is no longer necessary to have sought commercial loans to pay IHT prior to requesting a grant on credit.

Question 73

When will HMRC allow transfer of property in lieu of IHT?

Answer 73

If it is a heritage property.

The property will only be accepted if it is pre-eminent for its national, scientific, historic or artistic interest.

Question 74

When will an estate be excepted from Form IHT 400 in relation to a ‘foreign domciled estate’ ?

Answer 74

If the deceased was not domiciled in the UK and owned a relatively small amount of UK assets:

• Deceased was never domiciled in UK
• Gross value doesn’t exceed £150,000
• Estate only consists of cash, securities or quoted shares
• Assets pass by will, intestacy or survivorship
• No indirect interest in UK residentail property
• No chargeable transfer during 7 years prior to death

Question 75

If a foreign domcile has an estate exceeding £150,000 in the UK, must they submit IHT400?

Answer 75

Yes.

The foreign domcile exemption only applies to estates in the UK below £150,000

Question 76

A woman has died domiciled outside England and Wales. She had a very small estate in the UK (£120,000 in cash and shares) and has never been domiciled in the UK. Her assets pass on intestacy.

Must IHT 400 be completed?

Answer 76

No form IHT400 need be completed as the estate is a foreign domiciled excepted estate.

An estate in the UK of less than £150,000 in cash and stocks and shares owned by a deceased person who has never been domiciled in the UK, is a form of excepted estate and no form IHT400 is required.

Question 77

Where the coroner has ordered an inquest when and what can the executors do?

Answer 77

It is possible for the coroner to issue a interim death certificate

This can be used to carry out valuations and preliminary administrative tasks related to the administration of the estate.

Question 78

A man has died leaving a will which appoints all three of his children as his executors.

The man’s youngest child will be 18 three months after the date of the man’s death.

What should happen?

Answer 78

As the youngest child is almost 18, an application may be made that reserves power to them until they are 18 and able to participate in the administration of the estate.

Question 79

A will is returned to a solicitor with a covering letter paper-clipped to it.

When removed, this makes a small paper clip mark.

What should the solicitor do?

Answer 79

The solicitor should swear an affidavit or make a witness statement supported by a statement of truth to explain the paperclip mark and file it with the will.

Question 80

If an executor is not able to administer the estate of the deceased person what opton is available?

Answer 80

Where an executor is not able to administer the estate of the deceased person, their attorney may apply for a grant of representation on their behalf in these circumstances.

The attorney may apply for a grant of representation for the use and benefit of the incapacitated executor.

Question 81

What effect does an intestacy of an executor have on chains of representation?

Answer 81

The chain of representation which allows the executor of the estate of a deceased executor to complete the administration does not apply where the chain is broken by an intestacy

Question 82

Where a sole executor under the will is a minor at the time of death, can someone apply on their behalf?

Answer 82

Yes

If they are the sole executor, someone else will need to apply for a grant of representation for their use and benefit.

Once they becomes 18, the grant will come to an end, and an application for a further grant may be made by the executor.

Question 83

If a will is in dispute, will a grant of representation be given?

How can an executor defend the action?

Answer 83

Where there is litigation relating to the estate, such as a contentious probate matter, a grant of representation will not be given until resolution.

However, it is possible for a temporary grant to be obtained to allow the litigation to be completed, and the outcome to be determined. At that point, a full grant application may be undertaken.

Question 84

If a business is left in a will that will be The business will be sold as a going concern, how can executors ensure that, prior to the issue of the grant, the business is able to continue?

Answer 84

Where a grant is needed quickly in order to preserve the assets of the estate, it is possible to apply for a temporary grant ad colligenda bona.

This allows the PRs to protect the business until such time as the estate can be valued, and the formalities of the application for a full grant completed.

Question 85

Where there are possible grounds to challenge the validity of a will, or the appointment of an executor what can a party interested in the estate do?

Answer 85

A party who is interested in the estate, such as a beneficiary or someone who may benefit under an intestacy if the will is found to be invalid, may enter a caveat to prevent the issue of a grant in relation to an estate.

Question 86

Where an administrator has not made an application for a grant of representation in a reasonable time, what can someone lower down the order of entitlement do to intervene?

Answer 86

They may issue a caveat, and then follow the citation process to compel that person to either apply for a grant, or to step aside and allow the citator, who is making the application, to do so.

Question 87

To whom should the estate accounts be sent to?

Answer 87

The accounts should be sent to the executor for him to sign off, and then to the residuary beneficiaries unless the executor instructs otherwise.

Question 88

If the will is silent regarding interest on pecuniary legacies, is interest payable? If so, from when?

Answer 88

Interest will be payable on outstanding amounts from the end of the year following the death.