Personal Representatives Other Duties

COLLECTING THE ASSETS

Once the Grant has been obtained, we must begin to collect the assets. The PRs are under a duty to collect the real and personal property of the deceased in a reasonable time. Once the PRs have obtained the grant they can begin to collect the assets. In order to do so they will generally be required to produce either the original grant or an Office copy of it.

The method of collection will vary depending upon the asset involved e.g. withdrawal forms necessary to collect balance of bank or building society account etc. Once money is collected it should be paid into a PR's bank account or a client account held by a solicitor. Actual property collected should be stored and safeguarded.

PAYMENT OF DEBTS 

Pr's duties repayment of debts

As soon as money / assets can be collected PRs should begin to pay the deceased's outstanding debts, including the funeral account. PRs should also pay administration expenses as and when they arise during the administration.  PRs have a duty to pay such debts with ' due diligence '. This duty is owed not only to creditors but also to beneficiaries. If a PR fails to pay debts with due diligence (even though they are holding assets which could be used to pay the debt) then they will not only be liable to the creditor but also to any beneficiary for consequent loss (costs of any proceedings incurred by the debtor to recover the debt). The will may relieve the PRs of such liability to beneficiaries but it cannot relieve them of liability to creditors. The PRs may also gain protection against personal liability to creditors under s. 27 Trustee Act (see earlier notes).

PRs should ensure that any pre grant loan to pay IHT is repaid as soon as possible so as to minimise interest payments. This is particularly so if an undertaking had been given to a bank in connection with the loan. Often this undertaking will have been a 'first proceeds ' undertaking (i.e. the PRs promised to use the first moneys raised by them during the administration to repay the loan) and failure to do so will be a breach of this undertaking.

Order of payment of the debts.

An estate is solvent if the assets are sufficient to pay all of the funeral, testamentary and administration expenses, debts and liabilities. The estate will however be insolvent if the assets are insufficient to do so. If the debts etc. can be paid it is immaterial for the purposes of this definition whether legacies can be paid in full.

It is important to see if debts are secured or unsecured. A debt is secured if it had been charged on the part of the deceased's property during the deceased's lifetime. A…