Grants 2

Duties Before Grant

Dispose of the body and comply with HMRC reporting and IHT payment obligations.

Duty to Inform HMRC

PRs must report estate assets and liabilities under s.216 IHTA 1984.

Duty to Pay IHT

PRs must pay IHT due before a grant will be issued (s.226 IHTA 1984).

Duty to Administer (Post-Grant)

Collect assets, pay debts, and distribute estate according to law.

Inventory and Account

PRs must maintain and produce estate accounts if requested.

Executor’s Year

Administration should normally be completed within 12 months of death (s.44 AEA).

Fiduciary Duties

PRs must act honestly, avoid conflicts, and not profit from their role.

Power to Sell (ss.33 & 39 AEA)

PRs may sell estate assets to pay debts or distribute estate.

Power to Appropriate (s.41 AEA)

PRs may transfer assets in satisfaction of a beneficiary’s entitlement with required consent.

Consent for Appropriation

Required from the beneficiary receiving the asset unless the will states otherwise.

Valuation for Appropriation

Asset is valued at the date of appropriation, not the date of death.

No Prejudice Rule

Appropriation must not prejudice another beneficiary or specific gift.

Self-Dealing Rule

PRs must not appropriate non-cash assets to themselves without consent or court approval.

Special Rule for Surviving Spouse

May appropriate family home under intestacy without breaching self-dealing rules.

Power to Insure (s.19 TA 1925)

PRs may insure estate assets using estate funds.

Power to Invest (ss.3

8 TA 2000)

Power to Charge for Services (s.29 TA 2000)

Professional PRs may charge with written consent of co-PRs.

Reimbursement of Expenses (s.31 TA 2000)

PRs may recover reasonable out-of-pocket expenses only.

Power to Delegate (s.11 TA 2000)

PRs may delegate certain functions subject to statutory safeguards.

Power to Appoint Trustees for Minors (s.42 AEA)

PRs may appoint trustees to hold a minor’s legacy.

Power to Run a Business

PRs have limited common law power to sell a sole trader business but require express authority to run it.

Deadline to submit account (IHT account)

12 months from the end of the month of death

Deadline to pay (IHT)

6 months from the end of the month of death

S19 TRUSTEE ACT 1925

Power of trustees to insure trust property against loss or damage

SCOPE OF INSURANCE

Trustees may insure any property subject to the trust

PREMIUMS

Insurance premiums can be paid out of the trust fund

DUTY LEVEL

Trustees must act reasonably when deciding whether and how much to insure

BREACH RISK

Failure to insure where reasonable may amount to breach of trust

PURPOSE OF S19

Protects trust assets and reduces trustee liability risk

POWER OF ATTORNEY REQUIREMENT

Delegation must be made by a formal power of attorney

MAXIMUM PERIOD delegation

Delegation cannot exceed 12 months

NOTICE REQUIREMENT (delegation)

Written notice must be given to each co-PR (if any) before OR within 7 days of delegation

CONTENTS OF NOTICE

Must specify date of commencement and duration of delegation

REVOCATION

PR can revoke the delegation at any time

LIABILITY

PR remains liable for acts of the attorney unless statutory conditions are complied with properly

DUTY OF CARE

PR must exercise reasonable care in selecting the attorney

NON-DELEGABLE FUNCTIONS

Core duties requiring personal judgment should not be delegated improperly