Five things you may not know about administering an estate:
- The way an estate is administered depends on whether or not the person who has died has left a Will. If they have, their estate is ‘testate’ and the people responsible for administering the estate and distributing the assets in accordance with the Will are the ‘executors’. The executors will apply for a ‘grant of probate’ to give them the authority to administer the estate. If a person dies without leaving a Will, they will be ‘intestate’ and their estate will be distributed in accordance with the Intestacy Rules, which set out a prescribed order confirming how the estate should be distributed. The people responsible for administering the estate and distributing the assets in accordance with the Intestacy Rules are the ‘administrators’. The administrators will apply for a ‘grant of letters of administration’ which will give them the authority to administer the estate.
- Not all executors named in a Will are obliged to act as executors if this would be impractical, or even if one executor simply does not want to act. It is possible for an executor to renounce their rights to take out the grant of probate. Once an executor has renounced their rights, they are unable to act in the administration of the estate any longer. It is also possible for an executor to have ‘power reserved’ to them. This means that the other executors appointed in the Will can deal with administering the estate on a day-to-day basis and sign any documents required without the input of the executor who has had power reserved to them. However, if the acting executor(s) become incapable of acting during the administration of the estate, the executor with power reserved to them can step in and act. An executor may want to have power reserved to them if they have been appointed as an executor in a Will but do not live locally or are abroad.
- Under the Intestacy Rules, any member of the same ‘class’ is equally entitled to take out the grant of letters of administration. If, for example, an estate passes equally between four children of the deceased under the provisions of the Intestacy Rules, each of those four children is equally entitled to take out the grant of letters of administration. The grant can be taken out in the names of all four children, and they would all act as administrators. Alternatively, one child alone, or more than one of them, can take out the grant without the remaining children having to be joined in the application for the grant.
- An executor or an administrator of an estate (generically known as a ‘personal representative’ of the estate) has a duty to administer the estate properly in accordance with the deceased’s last Will or the Intestacy Rules. A personal representative can become personally liable if an estate is not distributed in accordance with the Will or Intestacy Rules. Problems can arise in the event that a personal representative is not aware that there is a Will in existence, or does not know of the existence of a more recent Will. It is vital to ensure that the most recent Will is the version of the Will used to obtain the Grant of Probate. We can advise you on adequate searches to ensure that the valid Will is discovered.
- A personal representative of an estate may also be personally liable to any creditors that come forward for payment of a liability if they have distributed the estate to the beneficiaries without paying that liability. However, there are ways in which a personal representative can protect themselves against this liability and ensure that the liability passes to the beneficiaries once they have received their share of the estate. We can help with putting the appropriate protection in place to protect a personal representative against any such liability.
If you would like to speak to the Wills, Trusts and Probate Department for friendly and sympathetic advice about any aspects of administering an estate, please call on 0161 926 9969