Definitions of Terms Used in Estate Administration
- Executor
An Executor is the person nominated by a Deceased person in their Will to administer their Estate upon their death. The Executor must ensure that the wishes of the Deceased as expressed in the Will are carried out.
- Administrator
An Administrator is the person appointed by the Court under the terms of the Succession Act to administer an Estate in circumstances where either the Deceased did not make a Will or having made a Will failed to nominate an Executor. Generally the Court will appoint the closest surviving next of kin of the Deceased as Administrator. An Administrator must ensure that, where the Deceased left a Will, the wishes of the Deceased as expressed in the Will are carried out or where no Will has been made, that the Estate is administered in accordance with the provisions of the Succession Act.
- Personal Representative
Personal Representative is a generic term used to describe either an Executor or an Administrator. For the purposes of this information sheet, this is the term we will use.
- Grant of Representation
A Grant of Representation is the authority issued by the Court to a Personal Representative to act in the administration of an Estate. A Grant of Representation is also known as a Grant of Probate where the Deceased died leaving a Will or a Grant of Letters of Administration where the Deceased died without a Will.
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Immediately Following the DeathIf the identity of the Deceased's Personal Representative is unknown at the time of death, the Deceased's next of kin may be required, as a matter of necessity, to attend to some matters which would otherwise be the responsibility of the Personal Representative if the identity of that person was known. The sorts of things that might need to be done include dealing with the body, providing for the Deceased's dependants and securing and maintaining the value of the Estate assets.
A person acting in this way must be careful however not to do too much without specific authority from the Personal Representative or the Court. Even a partial administration of an Estate by a person without authority creates a personal liability from the person to the Estate beneficiaries for any loss the beneficiaries may suffer as a result of the actions of that person.
- Locating the original Will
The original Will (if one exists) must be located and reviewed especially with a view to identifying any specific funeral requests. Generally a Will is kept by the Deceased's lawyers, in a safety deposit with the Deceased's bank or at the Deceased's home.
- If the Deceased did not make a Will
If the Deceased died without making a Will they are said to have died intestate. In those circumstances, the Estate must be administered in accordance with the Rules of Intestacy. These rules are written into the Succession Act.
For the purposes of this information sheet, references to the administration of an Estate in accordance with the terms of a Will shall apply equally to circumstances where there is no Will and the Estate is to be administered in accordance with the Rules of Intestacy.
- Funeral Arrangements
The next of kin may make the funeral arrangements where the identity of the Personal Representative is not known or one was not appointed. The costs of the funeral are payable as a first charge on the Estate. If the Deceased has money with a bank, the bank will usually pay the funeral account directly to the Funeral Home upon production of appropriate Tax Invoice from them. If an individual pays for the funeral from their own money, they are entitled to an immediate reimbursement from the Estate even though they may not subsequently be appointed as Personal Representative.
The Personal Representative has clear authority to make all decisions in respect of the funeral arrangements to the exclusion of the next of kin. If there is no Personal Representative the next of kin makes the decisions and if there is any dispute between them, the Court makes them.
- Deceased's Home
A Personal Representative must ensure safe custody of the Deceased's home, contents and motor vehicles etc where the Deceased lived alone. He or she may take reasonable steps to enure their safety at the expense of the Estate.
- Children
A Personal Representative must, where appropriate, arrange for adequate and appropriate care of the Deceased's minor children (and any pets).
- Money for Dependents
A Personal Representative may arrange for the Deceased's dependents to have access to adequate funds to enable them to survive prior to the issue of a Grant of Representation.
Initial Administration of the Deceased's EstateIf an Estate beneficiary nominated under a Will or appointed pursuant to the Rules of Intestacy dies within 30 days of the date of death of the Deceased, that beneficiary is deemed to have died before the Deceased and, as such, will not take the benefit left to them in the Will.
Therefore a Personal Representative should not make any distribution of the Estate (other than matters relating to the funeral or provision for the Deceased's dependants) until after that 30 day period has passed and the entitlement of the beneficiaries is certain. During the 30 day period, subject to locating the Will confirming their appointment as Personal Representative, the Personal Representative should attend to the matters listed below.
- Appoint lawyers to administer the Estate
The role of the Estate Personal Representative comes with considerable obligations, liabilities and risks. Most Estates warrant the expense of appointing an Estate lawyer to assist with the administration. The most important consideration for any Personal Representative is that he or she is personally liable to both the Estate creditors and beneficiaries for the proper and legal administration of the Estate.
- Ascertain assets and liabilities of the Estate
The Personal Representative should commence ascertaining the Estate's assets and liabilities. The Deceased's accountant and the Estate lawyer can usually be helpful if these details are not immediately known.
- Advise of death
People and institutions relevant to the Deceased should be advised of the death. Some Personal Representatives choose to place a notice in newspapers published in the areas where the Deceased lived or had business or personal interests.
Applying for a Grant of Representation
- Grant of Probate
A Personal Representative has personal liability to both the creditors and the beneficiaries of the Estate. A prudent Personal Representative will want certainty that the Will they are administering is the Deceased's last Will. If an Estate is administered (either knowingly or otherwise) pursuant to a Will which predates the Deceased's last Will and the Personal Representative has failed to seek Probate of the Will he or she intends administering, that Personal Representative will be personally liable to the beneficiaries of the last Will for any loss they may suffer because of the incorrect administration.
A Grant of Probate is a document issued by Court that declares that the Will the Personal Representative intends to administer is the Deceased's final Will. Once the Grant of Probate has issued, the Personal Representative is protected against:-
- Claims from beneficiaries under any subsequent Will; and
- Claims from any creditors of the Deceased who fail to notify the Personal Representative of their claim within the statutory period.
- Payment of Estate Debts
The Personal Representative must ensure that all of the Estate debts are paid before any payments are made to any beneficiary.
- Tax
The Personal Representative must obtain a tax clearance from the Tax Office both in respect of the Deceased's own tax and that of the Estate if the Estate has generated a taxable income during administration.
Rights of the Personal Representative
- Rights to Indemnity
A Personal Representative has the right to recover from the Estate any personal money spent during the administration of the Estate.
- Right of Renunciation
A person may refuse to be appointed as a Personal Representative. No one can be compelled to take up that position despite being named in the Will as Personal Representative or being the closest next of kin of the Deceased under the Rules of Intestacy.
- Right to Payment of a Commission
A Personal Representative may claim against the Estate for payment of a fee or a commission to compensate them for their efforts in administering the Estate. This payment remains payable even if Estate lawyers have been engaged to facilitate the administration. Payment is usually an amount agreed by the residuary beneficiaries but in the absence of agreement, the amount will be assessed by the Court.
Appointment of an Estate Lawyer
- Why appoint an Estate Lawyer?
As you have seen, appointment as a Personal Representative brings with it significant obligations, personal risks and potential liabilities. An experienced Estate lawyer will protect the Personal Representative from all risks and liabilities and ensure that the Estate is properly administered. The Personal Representative and the Estate will benefit from the Estate lawyer's professional indemnity insurance in the event that a mistake is made during the Estate administration.
- What does the Estate Lawyer do?
An Estate lawyer can do as much or as little in the Estate administration as the Personal Representative wants them to do. The Estate lawyer can do the entire Estate administration only referring to the Personal Representative for instructions when necessary or alternatively the Personal Representative can complete most of the work and only refer to the lawyer for advice and assistance when required.
- Who pays the Estate Lawyer?
An Estate lawyer's costs are the responsibility of the Personal Representative however they are recoverable from the Estate as an Estate debt.
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