Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?

Upon your death, whether you have a will or not, some one needs to distribute your property on your behalf. There are many statutory rules for these people to follow, especially if there is no will for the estate. But are these rules necessary? Do they just make bereavement even harder for the loved ones to cope with?



Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
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Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
Yes because...

if there is a will, only the executors of the will can administer the property

If the deceased made a valid will, the executors on that will are the only ones who will be permitted to distribute the property. Often executors are the solicitors who helped the deceased make the will, or other professional individuals. This makes the distribution hard as not only does this require the loved one's to find the will, but also to find the solicitors who executed the will. They then need to compel the solicitor to act in accordance with their executing duties. They cannot merely distribute the property themselves.

No because...

Whilst this may make it hard for the families to distribute immediately, it does ensure that once distributed, the property is legally in the right hands. As there are so many formal requirements and documents that need to be filed, it is best if there are only set individuals who can administer the property. That way there is less confusion. The last thing a bereaved loved one needs is hassle[[http://www.pindorialaw.com/estate-administration-probate-law-solicitos-uk.html]] and so that is why solicitors are often appointed as the only ones to ensure the property is distributed in accordance with the will and in accordance with the law.

Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
Yes because...

even if named as an executor, you still need a grant of probate

Even if the deceased made a will and named a person or people to distribute that estate on their behalf, they still need to obtain a 'Grant of Probate'. This is a formal document required by all those who currently hold the property of the deceased before they release the property into the hands of the executor. This is a strange legal phenomenon as the will, duly executed, can be used in a court of law as proof, so why is this not enough proof for a bank to release funds from the deceased's account? This merely elongates the procedure of administering estates.

No because...

If your property is worth under 15,000 GBP an executor on a duly executed will need not obtain the grant of probate[[http://www.yourlegalrights.co.uk/family/probate]]. This would cover almost all of the ordinary persons funds in banks and personal assets. The only thing that would not be covered is the deceased's house, if they owned one. With a house, there are so many forms to file regarding the mortgage and the preparation for sale that applying for the Grant of Probate will not delay the process.

Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
Yes because...

if will does not state any executors, there is a strict order of who is allowed to distribute property

You would think that if a will did not state any executors, the most logical thing to do would be to grant the right to distribute the property to the next of kin. However, this is not the case. Trustees of property that is not contained in the will are in fact the next people who can apply to administer the property. These could be people who have pension schemes written in trust for the deceased or insurance policies written in trust, or any property that does not pass under the will [[http://debatewise.org/debates/3087-if-you-die-without-a-will-is-your-property-going-to-be-distributed-fairly]]. In fact, in the order of people who are allowed to apply to distribute the property, family members are not listed![[http://www.inbrief.co.uk/estate-law/types-of-grant-who-can-apply.htm]]

No because...

This makes perfect sense for the deceased and for the family members. Far from making the process difficult, it eases the burden off of the family members. Family members do not Feature on the order of entitlement [[Non-Contentious Probate Rules; 20]] because they should be coping with their bereavement not having to deal with forms. In addition, if they were not explicitly stated as executors by the deceased then it is obvious that the deceased did not want them to be involved ( be it because they did not trust them or that they did not want them to deal with the hassle).

Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
Yes because...

Non-Contentious Probate Rule 20 - you still need to prove that no one else is entitled to distribute

Under N-CPR 20, there is an order of who is allowed to distribute the property if executors were not appointed. Even if you are the first person in the order who can distribute the property, you have to prove it when you apply for the Grant of Letters of Administration[[http://www.hmrc.gov.uk/manuals/ihtmanual/ihtm05101.htm]]. This means going through all the categories above the one you fall into and stating that there is no one alive in that category. The finding out of this information is hard enough, let alone proving it. It means that family members would have to seek a solicitor or other professional in order to distribute the will, otherwise it could possibly never get done. This imposes hassle and costs on to the family of the deceased.

No because...

Once again, the law does not impose these restrictions for any reason other than for the ease of the family and the process. If a person applied for the Grant of Letters of Administration with will annexed and got the grant without having to prove that all those who had a higher right to distribute that property, then there would be claims made against the distributions. This would mean that the original grant would have to be revoked, the property given back to the holders prior to the distribution (so the banks or other such organisations) and then the whole process would have to start again! The formality here is for family protection to make the distribution easier not harder.

Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
Yes because...

Inheritance tax is payable before grant is given!

Before the grant is given, personal representatives (be they executors applying for the grant of probate, trustees applying for the grant of letters of administration with will annexed, or beneficially entitled loved ones applying for the letters of administration) will need to pay the inheritance tax due on the estate first. This means they will need to list all of the property that the deceased owns that will pass under the estate, they will need to list all the deceased's debts that need to be paid and list the costs of the funeral. These figures will then need to be sent to the HMRC [[http://www.hmrc.gov.uk/inheritancetax/intro/probate-process.htm]]. They will then calculate the tax that is payable on the estate and that needs to be paid before they will issue any grant which would make the person a personal representative of the deceased's estate and therefore able to distribute it. It is a long procedure to sit here and type, but it is an even longer procedure to administer and longer still if you are going through bereavement.

No because...

Whilst the preparation may sound like a long time, once this is all done and the tax is paid, the Personal Representative (as they will be called once they have received their grant) will be able to start distributing the property. As all the forms are filled, there will be no more to do than distribute.

In addition, unless you go over the inheritance tax threshold, of 325,000 GBP, no tax will be payable[[http://debatewise.org/debates/2479-is-inheritance-tax-calculated-fairly#point_11439_headline]]; you need only fill the IHT205 form to prove that no tax is payable [[http://www.hmrc.gov.uk/inheritancetax/iht-probate-forms/help-iht205-C5.htm]]

Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
Yes because...

Liability is imposed on those administering the estate!

If the Personal Representative ('PR') ( the person holding the grant of probate or one of the letters of administration) misadministrates the property by giving people the wrong proportions or giving property to the wrong beneficiaries, then they are liable for their mistakes[[S1 Trustee Act 2000]]! This means that a bereaved loved one of the deceased could actual face civil liability for distributing the property! The law imposes on them a statutory duty of care which they must comply with. This also includes a liability for delay in distribution. This is the law making the process of administering the deceased's estate very hard. Not only do the PRs have to go through the process of applying for grant and then applying and paying inheritance tax, they are then lumbered with a liability for delay!

No because...

This is the law seeking to protect loved ones, not cause them undue stress. The reasoning behind the law is that everyone is advised to take out a will. If a will is taken out then it is advised that a solicitor or a professional will be the executor. In this situation then, which the law is trying to promote, the solicitor will be liable for the maladministration of the estate. This will compel the solicitor into appropriate action and it will ensure that they comply with their duties as PR and they will do so on time. This is reflected by the Trustee Act 2000 as the duty of care imposed on professionals is of a much higher threshold.

Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
Yes because...

there is no statutory power to run a business

If the deceased leaves behind a business to a minor beneficiary, the PRs have no power to run that business in order to get income for the beneficiaries. This prevents PRs from administering the property how they and the beneficiaries may wish. What the PR will have to do is sell the business in assets, and this may attain less money for the minor beneficiaries if the business was continued and kept running until the beneficiaries were over the age of 18.

No because...
Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
Yes because...

there is no statutory power to run a business

If the deceased leaves behind a business to a minor beneficiary, the PRs have no power to run that business in order to get income for the beneficiaries. This prevents PRs from administering the property how they and the beneficiaries may wish. What the PR will have to do is sell the business in assets, and this may attain less money for the minor beneficiaries if the business was continued and kept running until the beneficiaries were over the age of 18.

No because...
Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
Yes because...

PRs must pay debts from the sale of the asset over which the debt is charged to

This primarily involves mortgages. Where a mortgage is held over the property, this property is to be sold in order to pay off the debt [[S 35(1) AEA 1925]]. This is regardless of the fact that some of the beneficiaries may want to continue residing in the property, or the loved ones not wanting to sell the property.

No because...

This is the general position. However, if the house were of special interest, and deceased would be able to make provision in their will for the debt to be satisfied out of some other asset in the estate. They could specify another property which could be sold. [[S 35(2) AEA 1925]].

Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
No because...

Small payments have no formalities

Under the Administration of Estates (Small Payments) Act 1965 certain large banking organisations can make payments directly to the beneficiaries of an estate (the people who are due to inherit the money). This requires no proof of grant which is ordinarily required. The only thing is the payment needs to be under a certain sum. This amount has gradually been rising. In 1965 the amount was originally set at 500 GBP, however, due to orders by the Secretary of State the upper limit is now 5,000 GBP[[http://www.independent.co.uk/news/business/why-the-bereaved-must-wait-rules-governing-the-release-of-money-when-a-person-dies-can-cause-hardship-for-the-survivors-1420519.html]]. This means that any sums of this amount in a bank account can be distributed as the deceased wished without any 'grant of probate' or other formality.

Yes because...

This application is restricted. Whilst the Act may grant the right of certain organisations to release money in these circumstances without formality, it does not force those organisations to do so. Many still require proof of the right to administer the property in order for the money to pass to the beneficiaries. In addition, 5,000 is not a lot of money in these days. With inflation continuing, money is worth less now than it was in 1984 when the limit was set to 5,000 GBP. With these qualifications on the application of the Small Payments act, we can see that the laws do make it hard for loved ones to distribute the deceased's property.

Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
No because...

If there is no will, loved ones can apply to distribute the property

If the deceased died intestate (without a will) then loved ones of the deceased may apply to the courts to administer and distribute the property[[Non-Contentious Probate Rule 22]]. This means that solicitors will not be needed and people can start applying as soon as they feel ready. There is no need to wait for anyone else to comply.

Yes because...

Like with Grant of letters of administration with a will, the loved ones will still need to 'prove' that there is no one else with a better title to be a personal representative for the deceased in distributing their estate. Once again there is an order of entitlement. It follows the same order as the strict order of entitlement under the intestacy rules [[s.46 AEA 1925]][[http://debatewise.org/debates/3087-if-you-die-without-a-will-is-your-property-going-to-be-distributed-fairly]]. This means that the spouse has the most right, followed by children of the deceased, then by the parents of the deceased and then the siblings of the deceased. A parent of the deceased, in order to distribute the property of their dead child will first need to prove that no-one else fits into any of the catagories above them. If it is the parents administring the estate, we can imagine that the deceased is quite young, and the parent would have to go through the process of proving that there is no spouse and no children of the deceased. This must be an extremely upsetting process which the law could make easier by abolishing the order of entitlement.

Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
No because...

once grant of probate has been obtained, the Personal Representative (PR) has absolute power to invest

The power to invest is a an important power granted to PR's. It means that if a person is not absolutely entitled to a peice of property as of yet then the PR can invest the property[[S. 3 Trustee Act 2000 (TA 2000')]]. This is particularly important where children are involved. A will may specify that a child is not to become entitled to a piece of property until they attain a certain age. In the case of money, the value will decrease due to inflation unless the money is invested. The law on administering wills gives PRs this such power. In the case of actual property such as a house, if it were left completely unsupervised, it would waste away. Therefore the trustee would have a power to invest via putting the property up for rent. This would keep the property maintained by the tenants and it would also make money via rent. This rent would then be added to the value that the children were supposed to receive.

Yes because...

This right is qualified. PRs are to have regard to 'standard investment criteria' [[S. 4 TA 2000]]. This criteria is the duty to assess the suitability of the investment and to consider the need to diversify the investment. It also requires the trustee to look into whether they will need independent advice on how to invest and they will need to regularly review the investment. This is a heavy burden. Especially when viewed in light of the personal liability of the PR[[S1 TA 2000]] for any mistakes they make.

Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
No because...

PRs can buy property for those entitled under the will

If a trustee considers it wise to invest a sum of money in property they may do so as long as the property is in England and Wales[[S. 8 TA 2000]]. The Act states that the reason for this acquisition may be as a pure investment, may be for the person who is entitled to it at a later stage to live in, and it could be for any other reason. This is a wide power granted by the Act and it allows the PR to take into account the circumstances of the people who the property is to belong to in the future(the 'beneficiaries'). However, until those people are absolutely entitled, the PR has the power to deal with that property how they wish for the advancement of interests of that beneficiary.

Yes because...
Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
No because...

PRs can devise the property according to Beneficiary wishes

PRs have the power to appropriate property how they see fit [[s 41 AEA 1925]]. This means that they can appropriate (take control of) an asset to satisfy a beneficiaries entitlement. This can be of use whereby a beneficiary under a will has been awarded a lump sum of money. The beneficiary actually really would like an asset that belongs to the deceased. The PR can, instead of giving the lump sum of money, give the beneficiary the asset. They will also have to make up for the short fall in value. So if the beneficiary were entitled to a higher sum of money than the asset is worth, then the beneficiary would also be entitled to a lump sum to make up the difference in value.

Yes because...

This may seem like a great power, but with great power comes great responsibility. In order to appropriate the property as you have described the PR will have three hurdles to overcome.
1) A specific beneficiary must not be prejudiced [[s41 (1)(i) AEA 1925]]. This means that a PR cannot appropriate an item if it is promised in the will to a different beneficiary.
2) You will need the consent of the beneficiary who wants the item [[s41 (1)(i) AEA 1925]]. This is tedious for the PRs as if the person is a child or mentally incapable they will need the consent of the relevant parent or representative. This can be particularly difficult where the beneficiary has requested the item and yet their parents or representatives state thy do not consent.
3) the value of the asset is to be taken at the date of transfer to the beneficiary, not at the date of death. This means that another valuation will have to be completed, even though one was already completed close to the death of the deceased for Inheritance Tax reasons. This is more expense, and more hassle for the PR who by this stage will just want to divide the property in accordance with the deceased's wishes as soon as possible!

Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
No because...

PRs can give money to minors for their benefit

Even though a minor is not to inherit under a will unless they reach the age of 18 (or more if prescribed by the will), a PR can give the minor money for that persons maintenance, education or benefit. 'Maintenance, education, benefit'[[S.31 (1) (i)Trustee Act 1925 ]] is an extremely wide drafting of words. This rule enables PRs to give money to minor Beneficiaries if they need the money now. It would be unsatisfactory if the PRs could not advance the money in this way as it could lead to a situation where a beneficiary is entitled to a large sum of money at a future date, but have to live in poverty until they can claim this money.

Yes because...

If we look carefully at the wording of the grant of power in question, Section 31 of the Trustee Act 1925 ('TA 1925'), the right to advance money to beneficiaries is limited to the income of such property. Therefore, if a minor beneficiary in entitled to a property, the PR cannot sell the property and give the Beneficiary the proceeds. They would only be able to distribute whole or part of the rent [[S. 31 (1)(ii) TA 1925]]

Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
No because...

a PR can apply to the court for clarification

If an executor is unsure of his obligations he can apply to the court for specific relief. Under this the court will provide the executor with directions as to what to do and then the executor will not be liable for any losses of the estate to the beneficiaries or creditors of the estate. The court may also give an order for administration of estate detailing where all of the estate is to be distributed to. This helps loved one's (if they are the executors) to administer the property in a way which does not incur liability on them.

A court can also make a Benjamin Order [[http://www.probertencyclopaedia.com/A_BENJAMIN_ORDER.HTM]]. This is an order of the court that permits the executor to distribute the property as if a beneficiary were dead if they do not know whether the beneficiary is dead or alive or not. Then the executor is not liable for any losses that arise to that beneficiary if it is subsequently discovered that he is alive. However, that beneficiary could claim their share off of the other beneficiaries.

Yes because...

But the Benjamin Order will only be made if the Court is satisfied that every possible step was take to trace that beneficiary. Every possible step is a hard hurdle to satisfy. This makes wills hard to administer. [[http://desktoplawyer.co.uk/dtl/index.cfm?event=base:article&node=A76991BD77107]]

Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
No because...

a PR can issue a public notice in order to extinguish their liability

If a PR is struggling with the administration of the estate they are in trust of they can issue a notice in order to avoid personal liability of the distributions made. A PR is liable to all creditors and beneficiaries of the estate; that is people who are entitled to the estate by way of a debt of the deceased or an entitlement under the estate. A PR is liable to everyone who fits into those two catagories, whether they know of that person or not. To avoid liability the PR can make a public notice[[S.27 TA 1925]].

Yes because...

The Act is not as simple as that. There are several hoops that a PR must jump through before a valid notice is made under S. 27.

The public notice must state that a distribution is being made out of the deceased's estate.
It must be made in the London Gazette and another local are newspaper.
It must state a time in which a creditor or beneficiary is to respond, that period being no less than two months.

In addition, the PR is no freed from liability of the beneficiaries or creditors it knows about and does not free the PR from the obligation to make sufficient searches to find such beneficiaries and creditors [[s. 27(2)(b) TA 1925]]

Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
No because...

a PR can advance money to any benficiary for their benefit

This right arises to any beneficiary entitled, absolutely or contingently, and of any age (remember that the right to give money otherwise solely belongs to minor beneficiaries) to receive capital of the estate instead of waiting for that benefit to materialise [[S32 (1) TA 1925]]

Yes because...

This is a very limited power. Only 50% of what the beneficiary is entitled to is allowed to be advanced as capital[[S. 31 (1)(a) TA 1925]].
Once the person become fully entitled to the property, if they were not so at the time of the advancement, what they received is to be deducted from what they are due to receive upon entitlement [[s.31(1)(b) TA 1925]]. In addition, this must not effect the right of anyone who has been given a life interest in that property. So if a house has been granted to two people, one in life, and one in residual (so only entitled once the person with the life interest has died) the advancement of capital for the person who holds a residual benefit is unlikely. The only way around is consent. [[S.31 (1)(c) TA 1925]].

Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
No because...

a PR has power to insure

In order to help with the effective distribution of the estate and to avoid liability for loss, a PR can get insurance for any estate property to be distributed[[s 34 (1)(a) TA 2000]]. The money to pay any insurance premium can be deducted from the estate's capital[[s.34 (1)(b) TA 2000]]. This will take the liability away from the PR of any liability that may otherwise arise if their is a decrease of value in the estate due to the passage of time before the estate was administered.

Yes because...

However, if the Beneficiaries of a bare trust (those who are absolutely entitled to that particular asset and the PR has no discretion as to how to distribute[[s.34 (3)(a) and (b) TA 2000]]) they can disallow any insurance to be applied[[s. 34 (2)(a) and (b)]]. This makes administering the wills very difficult for the executor as it will put pressure on them to distribute the property as soon as possible in order to minimise the risk of personal liability in respect of that property.

Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
No because...

a PR can appoint a trustee to look after the interest of a child

If someone under the age of 18 is entitled to property under the estate, the PR of that estate can appoint someone to look after that property until the child attains the age of 18. This means that the PR is no longer liable for that property and the duty passes to the trustees that the PR appoints[[S. 42(1) AEA 1925]].

Yes because...

Although this may seem like an easy task for a PR appointed under a will, it is more difficult than it first appears. In order for the trust to be made valid, and so for personal liability to pass, there must be at least two trustees and not more than four.

The power to create a trust and pass liability is also only available where the child is absolutely entitled to the property under the estate. It must not be a 'contingent interest'; an interest that only materialised if a certain event occurs [[S.42(1) AEA 1925]].

Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
No because...

a PR can pass a child's interest to their parental guardians

If under a will a child is entitled to property. Rather than holding on to the property or creating a trust by appointing two trustees as above, the PR can pass the property to the parental guardians of the child. Parental guardians are allowed to recover in their own name anything to which the child is entitled [[s3(3) Children Act 1989 (CA 1989)]]. This is a simple process for PRs and will make the distribution easier.

Yes because...
Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?
No because...

PRs can regain their expenses in administering the trust

PR's are essentially trustees. They are looking after the interests of other people contained in the estate of the deceased, whether or not there is a will. Therefore, under the Trustee Act 2000, PRs administering a will can gain their expenses back from dealing with the estate[[S31 TA 2000]]. This would include any estate agent fees, any traveling expenses and any other costs that naturally arise from dealing with the distribution of the estate. This ensures that PRs are not financially worse off for dealing with the estate.

Yes because...

Whilst the TA 2000 may grant PRs (who are mainly the loved ones who applied for the grant of probate as per the rules above) they are not allowed to claim payment for the time they have spent on administering the estate. Only those who distribute the estate in a professional capacity are entitled to remuneration[[S29(2)(a) TA 2000]]. This is considerably hard for those who have to distribute the estate as a loved one as there are so many duties that they must comply with (as shown by this whole debate) and all of this takes time, which they will not be paid for by virtue of them being a loved one and not a professional.



Do the laws on administering wills make it excessively hard for relatives to distribute their deceased loved one’s property?

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