Powers of Personal Representatives Quiz

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Questions and Answers

What is one of the primary responsibilities of personal representatives regarding the deceased's assets?

To preserve and realize the estate's assets. (correct)

To distribute assets without consideration of the will.

To ensure beneficiaries are informed of all potential debts.

To acquire new assets for the estate.

Which of the following best describes the duty of personal representatives when acting for beneficiaries?

They should act solely in the interests of the estate.

They can disregard beneficiaries' opinions if they disagree.

They must exercise reasonable care and skill in beneficiaries' interests. (correct)

They are required to act based solely on personal knowledge.

What power do personal representatives NOT have according to their administrative powers?

Power to lease estate property.

Power to mortgage estate property.

Power to redistribute the entire estate without beneficiary consent. (correct)

Power to sell estate property.

What must a personal representative do before appropriating an estate asset?

Secure the consent of the beneficiary. (A) Signup and view all the answers

Under what condition can a personal representative avoid liability for another representative's breach of duty?

If they were negligent in preventing the breach. (C) Signup and view all the answers

What is the financial limit concerning UK total estate shares that personal representatives should be aware of?

Total shares not exceeding £150,000 are excluded. (A) Signup and view all the answers

Which duty of personal representatives emphasizes the importance of specialized knowledge?

Duty to act in the best interests of beneficiaries. (A) Signup and view all the answers

Which option describes a permissible action by personal representatives concerning estate property?

They have the power to mortgage estate property. (B) Signup and view all the answers

What is NOT required from personal representatives when carrying out their duties?

They must communicate every decision with all beneficiaries. (B) Signup and view all the answers

What authority does a Personal Representative NOT have regarding the deceased's business?

To operate the business without any authorization. (B) Signup and view all the answers

What is a requirement for investments made by a Personal Representative?

They must be suitable and diversified for the trust. (B) Signup and view all the answers

When can a Personal Representative advance funds to a beneficiary?

If the beneficiary has either vested or contingent interests. (A) Signup and view all the answers

Which of the following powers allows a Personal Representative to appoint someone to manage assets for minor beneficiaries?

Appointing Trustees (C) Signup and view all the answers

What responsibility does a Personal Representative have when delegating duties to agents?

They must ensure the agent acts diligently. (C) Signup and view all the answers

If a Personal Representative incurs expenses while managing the estate, what can they do?

They can be reimbursed for expenses incurred properly. (C) Signup and view all the answers

What happens to the income from a gift to a minor if no specific use is designated?

It accumulates until the minor turns 18. (D) Signup and view all the answers

What is not considered among the powers granted to a Personal Representative?

Trading under the deceased's name. (C) Signup and view all the answers

What is required for a Personal Representative to continue the deceased's sole trade business?

Express authorization from the will. (A) Signup and view all the answers

Study Notes

Powers of Personal Representatives (PRs)

PRs can appoint trustees for minor beneficiaries who are unable to give a valid receipt for monies or assets transferred to them.
PRs have the power to ensure property of the estate.
PRs may delegate duties to agents and are liable for breaches by the agent only if the PR failed to use reasonable care in appointing the agent.
PRs may indemnify themselves (that is, reimburse themselves) for expenses they properly incur on behalf of the estate.
A PR does not have a statutory power to continue carrying out the deceased's sole trade business; such power must be given by provision in the deceased's will.
PRs have the power to invest.
- PRs may invest in almost anything but the investment must be suitable for the trust and investments should be diversified.
- A PR can be liable to a beneficiary harmed by breach of the above principles.
If an estate includes a gift to a minor and the gift includes the right of the minor to receive income, the PRs may accumulate the income for the maintenance, education, or benefit of the minor.
- Once the beneficiary reaches age 18, the accumulated income is normally added to capital.
  - If the gift still has a contingency (for example, the income is to be paid to the beneficiary until reaching age 21, and then the principal is to be paid to them), the income will be paid to the beneficiary until the contingency is satisfied.
PRs may advance funds to any beneficiary with a vested or contingent interest in the estate.
- The advance may be for up to the entire presumptive share of the beneficiary.
- Anyone with a prior interest in the funds must give consent.
- If an advance is made on a contingent gift and the contingency fails, the beneficiary has no obligation to pay back the advance.

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Description

Test your knowledge about the powers and responsibilities of Personal Representatives (PRs) in estate management. This quiz covers key aspects such as appointment of trustees, delegation of duties, and investment powers. Understand the legal responsibilities that PRs hold and the implications of their actions for beneficiaries.