Obtaining the grant of probate from the Probate Registry in your name brings with it a duty of care not just to the beneficiaries of the estate but also to the deceased creditors. Issues can arise where the claimants and creditors are unknown or there are difficulties tracing them.
It is the personal representative’s duty to collect in the deceased’s assets and the law imposes a standard of care which should be met in doing this. That standard requires also a duty to discharge any debts, taxes or expenses and to then provide estate accounts.
The debts owed by the deceased should be paid as should funeral costs, costs arising from the administration of the estate and any tax. The deceased person may owe income tax or capital gains tax to be paid out the estate. The personal representative could have a liability to pay inheritance tax on the estate.
If there is a will giving specific cash gifts or assets they must be dealt with next by the personal representative paying the cash gifts or transferring the assets to the named beneficiaries. Only when all this has been done can the residuary estate that is left be distributed.
Care has to be taken to make sure a beneficiary is not bankrupt because if they are payment can only be made to their Trustee in Bankruptcy and only the Trustee can give a valid receipt. If this is not done the Trustee can claim the amount from the personal representative personally.
The personal representative should also make sure they take steps to be protected against claims by unknown creditors or beneficiaries or claimants under the Inheritance Act provisions. If this is not done in the right way they are liable to settle the amount payable from their own assets. The procedure involves advertising for creditors by a notice published in a specific way both locally and nationally.
The provisions of the Inheritance Act can give certain people greater rights than the provision they are entitled to through a will or intestacy rules. If the assets have been distributed within the time period that a claim can be brought the personal representative can be personally liable.
There can also be problems where a beneficiary cannot be located. There are different ways of dealing with this situation and it is important for the personal representative to decide which is their preferred option in case a missing beneficiary subsequently claims their inheritance.
If you are experiencing problems administering an estate, looking for advice on applying for probate or are worried you may get caught up in issues you had not realised could apply to your situation please call to see how we can help.