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Personal Representative Responsibilities

When you agree to become a Personal Representative of someone’s Will, you become responsible for winding up their affairs after their death. This includes paying off any debts, sorting out their tax liabilities and distributing their assets in accordance with the terms of the Will and the law.

Administering an Estate is an onerous task, even where the assets are relatively modest. If you don’t administer the Estate properly you may be held personally liable out of your own pocket to make good any loss suffered.

At first sight you might think the Estate is simple and straightforward, but things are not always what they seem and you may need assistance from us.

The Will

You must interpret the Will to find out what types of gifts are to be made, to whom, how and when. There are a number of issues that may arise such as:-

  • Do you know all the beneficiaries?
  • What happens if a beneficiary has already died or is missing?
  • What is the effect of the deceased being divorced?
  • Is there a pre-condition to be fulfilled before the gift can take place, e.g. reaching the age of 21?

 

A gift can fail if the subject matter does not form part of the Estate because it has been sold or destroyed.

If the subject matter of the gift or the beneficiaries cannot be properly identified the gift may fail for uncertainty.

The Will may make a gift to a Trust. These can range from Trusts for a Nil Rate Band Discretionary Trust, to trusts for the disabled, children or charities.

If a gift fails, it does not necessarily fall back into the Estate to be distributed in accordance with the terms of the Will. Instead a partial intestacy may arise. You have a duty to account to the correct person or Trust. If you get it wrong then you are personally liable to the rightful beneficiary.

Identifying the assets

Many assets cannot pass under the Will as they are governed by other rules. Joint property, such as a bank account or the home (if held as joint tenants), passes by survivorship to the surviving owner.

Certain investments must be paid to a nominated person on the death of the insured.

Assets may be held in Trust and pass outside the Estate.

Would you be able to identify which assets do form part of the estate and which do not?

 

Obtaining the Grant and paying Inheritance Tax

Delivery of Accounts to HM Revenue & Customs must be within 12 months of the death and Inheritance Tax is due 6 months after the end of the month in which the death occurs. Tax due on land or properties can be paid in instalments. Late payment of Inheritance Tax or failure to properly value the assets and calculate the tax may arise in penalties and interest.

The Grant of Representation authorises you as the Personal Representative to collect in and deal with the deceased’s assets.

When to transfer

Section 4 4of the Administration of Estates Act 1925 provides:-

"A Personal Representative is not bound to distribute the Estate of the deceased before the expiration of one year from the death”.

This ‘year’ commonly known as “the Personal Representative’s year” is a convenience only, in order for you to identify all the assets and liabilities. Any delay in the administration may have to be justified. If there is a delay in paying legacies without good reason you could be personally liable to pay interest.

You will face delays throughout the administration which are beyond your control. It is important that you manage the progress.

On the other hand if you distribute too early and then someone makes a claim against the Estate, you will be personally liable for that claim if it is successful.

Need some help?

Slee Blackwell can assist you in some or all of the aspects of the administration of an Estate so that you as a Personal Representative will be fully advised and protected.

*Prices exclusive of VAT and Disbursements

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