Wills and Estate Administration Quiz
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Questions and Answers

When is a sole practitioner able to issue a valid receipt for the proceeds of a land sale?

  • Only when the sale involves a share in a company.
  • When the sale is completed by multiple practitioners working together.
  • Always, regardless of the number of practitioners involved.
  • When there is a single practitioner handling the sale. (correct)

What is the primary method for PRs to protect themselves against claims from unknown creditors, according to the provided text?

  • Obtaining a Benjamin Order from the court.
  • Purchasing insurance against the risk of a missing claimant.
  • Placing advertisements in the *London Gazette* and other relevant newspapers. (correct)
  • Distributing the estate with an indemnity from the beneficiaries.

When a PR cannot locate a known beneficiary, which action is NOT mentioned as a possible option?

  • Distributing everything with an indemnity from the beneficiaries.
  • Making payment owed to the beneficiary into a designated account. (correct)
  • Distributing the estate with an indemnity from the beneficiaries.
  • Seeking a Benjamin Order from the court.

What is the primary purpose of a Benjamin Order, according to the text?

<p>To distribute the estate assuming a missing beneficiary has died. (C)</p> Signup and view all the answers

What is the legal principle that PRs must pay estate creditors before distributing assets to beneficiaries?

<p>Order of payment of debts. (D)</p> Signup and view all the answers

According to the content, which legal framework allows potential claimants to make claims against an estate?

<p>The Inheritance (Provision for Family and Dependants) Act 1975 (A)</p> Signup and view all the answers

If a PR is concerned about a possible claim under the Inheritance (Provision for Family and Dependants) Act 1975, what action should they take?

<p>Wait six months from the grant date before distributing the estate. (D)</p> Signup and view all the answers

Under what circumstances would a PR be justified in selling property specifically gifted in a will to pay debts?

<p>When all other assets have been exhausted. (D)</p> Signup and view all the answers

What is the primary function of the London Gazette, as described in the content?

<p>To announce and publish official notices, including death notices. (C)</p> Signup and view all the answers

Which of the following is NOT a valid option for a PR when they cannot find a known beneficiary or creditor?

<p>Waiting five years from the grant date before distributing the estate. (D)</p> Signup and view all the answers

If a will specifies that debts should not be paid from the residue, how will unsecured creditors be paid?

<p>From the property specifically designated for debt payment by the will, then from pecuniary legacies, then from specifically devised or bequeathed property, then from gifts for property that are &quot;free of mortgage&quot;. (D)</p> Signup and view all the answers

In an insolvent estate, which type of debt is paid first?

<p>Secured debts (C)</p> Signup and view all the answers

In an insolvent estate, which of the following would be considered a "preferred debt"?

<p>Wages owed to the deceased's employees for the six months prior to death. (D)</p> Signup and view all the answers

If a will specifies that debts should not be paid from the residue, and the estate has insufficient pecuniary legacies to cover the outstanding debts, how will the debts be paid?

<p>The debts will be paid proportionally from the specifically devised or bequeathed property. (A)</p> Signup and view all the answers

In the context of unsecured debt payment, what does "proportionate" mean?

<p>The amount paid to each creditor is calculated as a percentage of the total debt owed. (C)</p> Signup and view all the answers

When a will specifies that a gift of property is "free of mortgage", what does this mean in terms of debt payment?

<p>The mortgage is paid from the residue of the estate, if sufficient funds are available. (B)</p> Signup and view all the answers

Which of the following is NOT considered an unsecured debt in an insolvent estate?

<p>A secured loan on the deceased's property. (B)</p> Signup and view all the answers

If a will specifies that debts should not be paid from the residue, and the estate does not have enough funds to pay all debts in full, how will the debts be paid?

<p>The debts will be paid proportionally from available funds according to their order of priority. (D)</p> Signup and view all the answers

In an insolvent estate, which of the following types of debts has the lowest priority for payment?

<p>Deferred debts (A)</p> Signup and view all the answers

If an estate has sufficient funds to cover all liabilities, how will the unsecured creditors be paid?

<p>In the order outlined for unsecured debt payment, as described in the content. (C)</p> Signup and view all the answers

Flashcards

Unsecured creditors

Creditors who have no legal claim on specific assets of the deceased.

Residue of the estate

The remaining assets after all specific gifts are distributed.

Unsecured debts paid from legacies

When a will instructs to pay debts from the residue, but there isn't enough, unpaid debts are paid proportionally from specific legacies given in the will.

Insolvent Estate

If an estate cannot cover all its debts, they are paid in a specific order based on their priority.

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Secured debts

Debts that are secured by specific assets, like a mortgage on a house.

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Unsecured death

Debts that are not secured by specific assets of the deceased.

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Funeral & administration expenses

Expenses related to the funeral and administration of the estate. These are paid first from an insolvent estate.

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Preferred debts

Prioritised debts owed to deceased employees in the last four months before death, up to £800 per employee.

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Ordinary debts

Standard debts, including taxes owed to HMRC and other unpaid obligations.

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Deferred debts

Loans provided to the deceased spouse are paid last in an insolvent estate.

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Sole Practitioner Land Transfer

A sole practitioner can issue a valid receipt for land sale proceeds. But if there are multiple practitioners, all must sign the transfer of land and company shares.

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PR Liability to Beneficiaries

Personal representatives (PRs) are personally liable for unpaid beneficiaries or creditors even if unknown, unless they follow specific legal steps.

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PR Protection from Unknown Claims

PRs can protect themselves from unknown claims by advertising in specific publications to alert potential claimants.

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Dealing with Missing Beneficiaries

PRs can make payments to missing beneficiaries into court, distribute with beneficiary indemnity, seek court orders, or get insurance to protect against potential claims.

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Waiting Period for Inheritance Claims

PRs must wait six months after the grant date to distribute the estate if they're concerned about a potential claim under the Inheritance (Provision for Family and Dependants) Act 1975.

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Priority of Creditors

PRs must pay estate creditors before distributing assets to beneficiaries.

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Protecting Specific Gifts

PRs should avoid selling specifically gifted property to pay debts unless other assets are exhausted.

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PR Protection Publications

The London Gazette, a local newspaper where the deceased's land is located, and other relevant publications are used for PR protection.

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Benjamin Order

A Benjamin Order allows PRs to distribute the estate on the assumption that a missing beneficiary died before the deceased.

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Seeking a Court Order

PRs can seek a court order allowing them to distribute the estate, assuming a missing beneficiary died before the deceased.

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Study Notes

Wills and the Administration of Estates

  • Unsecured creditors should be paid from the estate's assets in the following order:

    • Property undisposed of by the will (for example, in a partial intestacy), then Residue
    • If the will provides debts specifically provides should be used for the payment of debts (if any)
      • Property that the will specifically provides
      • From pecuniary legacies which abate proportionally - so if one pecuniary legacy is £10,000 and the other is £20,000 and funds are needed
      • If there are no pecuniary legacies or they weren't sufficient to pay the debts owed, from specifically devised or bequeathed property; proportionally to the property's value compared to the whole
      • If a gift provides a property that is "free of mortgage", the mortgage must be paid insofar as the residue is available

  • If an estate is insolvent (that is, it doesn't have sufficient funds to pay reasonable funeral, testamentary, and administration expenses, debts, and other liabilities in full), debts should be paid in the following order:

    • Secured debts should be paid first, from the property against which it is secured - subject to the testator showing any contrary intention in the will
    • Unsecured debts should be paid in the following order with each creditor within the same rank ranking equally, so if money runs out in that rank, their payment abates proportionally
      • Reasonable funeral and administration expenses
      • Preferred debts – wages and salaries of the deceased's employees in the four months prior to death, up to a maximum of £800 each
      • Ordinary debts – including money owed to HMRC and the balance of pre-deferred debts
      • Interest on preferred and ordinary debts from the deceased's spouse

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Description

Test your understanding of the processes involved in wills and the administration of estates. This quiz covers topics such as the order of payment to unsecured creditors, handling insolvent estates, and specific provisions made in a will. Sharpen your knowledge on estate management and legal responsibilities.

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