Introduction to wills and estate planning - Roles of persona...

Learning Outcomes

This article explains the appointment, core duties, decision-making powers, and statutory protections of personal representatives (executors and administrators) and trustees in the context of wills and estate planning for SQE1 FLK2. It distinguishes clearly between these roles, showing how and when each acquires authority to act, how their responsibilities to beneficiaries differ, and when one person may validly hold both offices. It reviews who is entitled to take a grant under the Non-Contentious Probate Rules 1987, the effect of renunciation, power reserved, and intermeddling, and the limits on the number of personal representatives. It analyzes the main duties in administering an estate, including collecting and safeguarding assets, paying debts and tax, distributing residue, and complying with the statutory duty of care and protections in the Administration of Estates Act 1925 and Trustee Act 1925. It also examines trustees’ ongoing fiduciary obligations, their statutory investment, maintenance, and advancement powers under the Trustee Act 2000 and Trustee Act 1925, and how these must be exercised in practice. It concludes with SQE1-style problem questions involving estate administration timelines, receipts, sales of land, minors’ interests, and the practical consequences when duties are breached.

SQE1 Syllabus

For SQE1, you are required to understand the legal status, appointment, and main functions of personal representatives and trustees in the administration of estates and trusts, with a focus on the following syllabus points:

• The distinction between executors and administrators, and how each is appointed
• The principal duties and powers of personal representatives in estate administration
• The legal responsibilities and fiduciary obligations of trustees
• The differences between the roles of personal representatives and trustees
• The practical implications of these roles for the distribution of estates and management of trusts
• Who is entitled to take a grant under the Non-Contentious Probate Rules 1987 (including the order of priority on intestacy)
• Renunciation and power reserved, and the effect of intermeddling (executor de son tort)
• The statutory duty of care (Trustee Act 2000 s1) and personal representatives’ protections, including advertisements under Trustee Act 1925 s27
• Trustees’ investment duties and powers (Trustee Act 2000 ss3–5, s8), and statutory powers of maintenance (TA 1925 s31) and advancement (TA 1925 s32 as amended)

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. What is the difference between an executor and an administrator?
2. Name two core duties of a personal representative.
3. What is the primary fiduciary duty of a trustee?
4. Can a personal representative also act as a trustee in the same estate? Explain briefly.

Introduction

When a person dies, their property must be collected, managed, and distributed according to the law and the deceased’s wishes. This process involves two key legal roles: personal representatives (executors or administrators) and trustees. Understanding the appointment, powers, and duties of these roles is essential for effective estate planning and administration, and is a core requirement for SQE1. The distinction is fundamental: executors derive their authority from the will (effective from death), whereas administrators derive authority only when the court issues a grant of letters of administration. Trustees may be appointed by the will, by a separate trust instrument, or by law, and hold legal title to trust property for beneficiaries, subject to strict fiduciary standards.

Key Term: personal representative
A person (or persons) responsible for managing and distributing a deceased’s estate. Includes executors and administrators.

Key Term: executor
A person named in a will to carry out the instructions of the will and manage the estate.

Key Term: administrator
A person appointed by the court to manage the estate where there is no will or no executor able or willing to act.

Key Term: estate
All property, rights, and obligations owned by a person at death that pass to their personal representatives.

Key Term: fiduciary duty
A legal obligation to act in the best interests of another party, such as an estate or trust beneficiary.

Key Term: trustee
A person or persons holding legal title to trust property for the benefit of beneficiaries, with duties and powers defined by law and the trust instrument.

Appointment and Types of Personal Representatives

Personal representatives (PRs) are responsible for administering a deceased person’s estate. There are two types:

• Executors are appointed by a valid will. Their authority comes directly from the will and, in principle, takes effect immediately on death. In practice, a grant of probate is normally required to prove title to third parties (e.g., banks, HM Land Registry).
• Administrators are appointed by the court under the Non-Contentious Probate Rules 1987 when there is no will (total intestacy) or when no executor is able or willing to act. Authority to act exists only upon issue of the grant.

Where a will exists but no executor can or will act, the court may grant letters of administration with the will annexed. The order of entitlement is set by the NCPR, with priority typically to the residuary beneficiaries and trustees of residue. For a total intestacy, the priority is set in NCPR r22 and broadly tracks the statutory order under the Administration of Estates Act 1925 s46 (e.g., surviving spouse/civil partner first, then children, then parents, and so on). If minors are entitled, at least two administrators or a trust corporation will generally be required (Senior Courts Act 1981 s114(2)).

Renunciation by a named executor must be in the prescribed form and filed; once properly renounced, an executor cannot reclaim the right except with the court’s permission. A named executor may be granted “power reserved” (to prove later) when another executor takes the grant; this preserves the named executor’s right to apply later if needed. If a person intermeddles with the estate without authority, they risk becoming an executor de son tort and incurring personal liability.

Only a maximum of four PRs can take a grant for the same part of an estate (Senior Courts Act 1981 s114(1)). Although a sole executor can give a valid receipt for capital money, practical administration often benefits from appointing at least two individuals, especially where trusts arise.

Main Duties of Personal Representatives

Personal representatives must:

• Identify, secure, and value all estate assets
• Pay the deceased’s debts, funeral expenses, and taxes
• Distribute the estate to the correct beneficiaries under the will or intestacy rules
• Keep accurate records and provide information to beneficiaries

Key Term: estate
All property, rights, and obligations owned by a person at death that pass to their personal representatives.

Personal representatives’ overarching statutory duty is “to collect and get in the real and personal estate of the deceased and administer it according to law” (Administration of Estates Act 1925 s25). They should aim to complete the administration within the informal “executor’s year” (12 months) where practicable. PRs owe a statutory duty of care under Trustee Act 2000 s1 to exercise reasonable care and skill, taking into account their professional status and any specialist knowledge. Failure to act properly may amount to a devastavit (maladministration), exposing PRs to personal liability to creditors or beneficiaries. Courts have discretion to relieve PRs from liability if they acted honestly and reasonably (Trustee Act 1925 s61).

PRs should also consider statutory protections. To protect against unknown creditors or beneficiaries, PRs may advertise under Trustee Act 1925 s27 (e.g., London Gazette and local newspapers) and wait the specified notice period before distributing. PRs should delay distribution for six months from the grant to guard against claims under the Inheritance (Provision for Family and Dependants) Act 1975.

Worked Example 1.1

Question: Olivia dies leaving a will appointing her friend Sam as executor. Sam discovers Olivia’s will, her house, bank accounts, and several debts. What are Sam’s first legal steps?

Answer:
Sam must secure the will, apply for a grant of probate, identify and value all assets and debts, pay any outstanding liabilities and taxes, and then distribute the remaining estate to the beneficiaries named in the will. Sam should keep full accounts, exercise the Trustee Act 2000 s1 duty of care, consider statutory protections (e.g., s27 notices), and aim to complete administration within the “executor’s year”.

Powers and Legal Authority of Personal Representatives

Personal representatives have implied and statutory powers to enable proper administration, including:

• Selling, mortgaging, or leasing estate assets (AEA 1925 s39; PRs have the functions of trustees of land under TLATA 1996)
• Appropriating assets towards a beneficiary’s share (AEA 1925 s41), subject to required consents and without prejudicing specific beneficiaries
• Continuing a business for a limited period to preserve its value and effect a sale as a going concern
• Insuring estate assets and taking steps to preserve value
• Investing estate funds, applying the general power of investment and standard investment criteria (Trustee Act 2000 ss3–5), and taking proper advice (s5)
• Delegating certain administrative functions and investment decisions in permitted circumstances (Trustee Act 2000)
• Paying maintenance to minors and advancing capital in appropriate cases

Executors may act from death (their authority derives from the will), though in practice third parties require a grant. Administrators have no authority until the grant is issued. For capital receipts from a sale of land, a sole PR can give a valid receipt (Law of Property Act 1925 s27(2)), but all PRs must join in instruments of transfer of land and shares.

These powers are subject to fiduciary obligations: PRs must act honestly, in good faith, and in the best interests of the estate and all beneficiaries. Decisions about selling assets should take proper account of will provisions, beneficiaries’ wishes, market conditions, and tax consequences (inheritance tax, capital gains tax).

Key Term: fiduciary duty
A legal obligation to act in the best interests of another party, such as an estate or trust beneficiary.

Worked Example 1.2

Question: A sole executor sells estate land and gives a receipt to the buyer for the sale proceeds. Is the receipt valid?

Answer:
Yes. A sole personal representative can give a good receipt for capital money arising on a sale of land (Law of Property Act 1925 s27(2)), even though there is only one PR. However, for the transfer itself and other dispositions, all PRs holding office may need to join; and the executor must still comply with fiduciary duties and the Trustee Act 2000 s1 duty of care.

Trustees: Role and Core Responsibilities

Trustees are appointed to hold and manage property for the benefit of others (the beneficiaries) under a trust. Trusts may arise under a will (a will trust), by lifetime settlement, or by law. Trustees hold legal title to trust assets and must manage them in accordance with the trust instrument and applicable law.

Trustees’ main duties include:

• Acting in the best interests of all beneficiaries (the fiduciary duty)
• Acting jointly and personally in administering the trust (with limited exceptions for delegation)
• Managing trust assets prudently and investing according to the standard investment criteria (Trustee Act 2000 ss3–5), and taking proper advice where required
• Acting impartially between beneficiaries and avoiding conflicts of interest (including the self-dealing rule)
• Keeping proper accounts and providing information to beneficiaries
• Observing the terms of the trust and the equitable duties (e.g., to take possession of trust property, maintain confidentiality, and avoid unauthorised profit)
• Considering whether the trust permits charging for professional services (TA 2000 s29) or requires a charging clause

Trustees’ powers are set out in the trust instrument and the Trustee Act 2000. Trustees have a general power of investment (s3); must apply the standard investment criteria (s4) including suitability and diversification; may acquire UK land (s8) for investment or occupation by a beneficiary; and may delegate certain functions subject to statutory safeguards. Ethical investment policies may be adopted where consistent with beneficiaries’ best interests and trust purposes.

Key Term: power of maintenance
The statutory discretion under Trustee Act 1925 s31 to apply trust income for a minor beneficiary’s maintenance, education, or benefit, and to accumulate surplus income. From age 18 (subject to variation by the instrument), the beneficiary becomes entitled to their share of income.

Key Term: power of advancement
The statutory discretion under Trustee Act 1925 s32 to advance capital to a beneficiary with a vested or contingent interest, up to the whole of their presumptive share (as amended by the Inheritance and Trustees’ Powers Act 2014), with prior life tenants’ consent where applicable. Advances are brought into account when the beneficiary later becomes absolutely entitled.

Trustees exercising s31 should ensure that payments are for maintenance, education, or benefit and record their decision-making; s31 gives wide flexibility but must be justified by the beneficiary’s circumstances and trust terms. Under s32, trustees may make capital available to help a beneficiary “in life” (e.g., study costs, housing deposit), even if the interest is contingent; amounts are offset against the beneficiary’s eventual entitlement.

Where a will trust includes residence or occupation rights, trustees may use s8 TA 2000 to acquire or retain land for occupation by a beneficiary, subject to the trust’s terms. Trustees should also be aware of TLATA 1996 duties (e.g., s11 duty to consult beneficiaries with an interest in possession) which can be excluded or modified by the instrument, and beneficiaries’ rights of occupation (s12), subject to trust purposes.

Worked Example 1.3

Question: A will creates a trust for two minor children, appointing their aunt and uncle as trustees. What are the trustees’ main legal obligations?

Answer:
The trustees must manage the trust assets for the benefit of the children, invest prudently and keep the fund diversified under Trustee Act 2000 ss3–5, act impartially, keep records, and provide information to beneficiaries or their guardians as required. They may apply income for the children’s maintenance, education, or benefit under TA 1925 s31 and may advance capital under s32 if appropriate, ensuring any advance is accounted for when the child becomes absolutely entitled.

Differences Between Personal Representatives and Trustees

While both roles involve managing property for others, there are key differences:

• Scope: PRs manage the entire estate until administration is complete; trustees manage only the trust property.
• Source of authority: Executors’ authority arises from the will on death; administrators’ authority arises only on grant. Trustees’ authority arises from the trust instrument and statute.
• Duration: PRs’ role ends when the estate is fully administered and residue is vested; trustees’ duties may continue for many years.
• Duties: PRs collect assets, pay debts/taxes, and distribute the estate. Trustees manage and invest trust assets on an ongoing basis, apply income/capital in accordance with trust terms, and discharge continuing fiduciary duties.
• Beneficiaries: PRs act for all those entitled under the will or intestacy; trustees act for the specific beneficiaries of the trust.
• Decision-making and receipts: A sole PR can give valid capital receipts on a sale of land; trustees generally must act jointly and comply with trust-specific requirements for receipts and transfers.

It is common for the same individual to be both executor and trustee under a will. In that case, the executor’s role is limited to administration and ends when residue is ascertained and transferred to the trustees, after which their trustee duties continue. The person must understand the shift from collecting and distributing to ongoing management and fiduciary oversight.

Worked Example 1.4

Question: A will appoints Emily as executor and also as trustee of a trust for the deceased’s grandchildren. How do Emily’s duties change once the estate is distributed?

Answer:
As executor, Emily must collect assets, pay debts, and distribute the estate. Once the estate is distributed and residue is vested in the trust, her role as executor ends. As trustee, she continues to manage and invest the trust assets, apply income/capital under TA 1925 ss31–32, act impartially, and comply with the trustee duties and investment obligations under the Trustee Act 2000 and the trust instrument.

Worked Example 1.5

Question: Trustees hold a discretionary trust for several grandchildren. One beneficiary, aged 20, is offered a below-market purchase of her rented flat and requests £50,000 from the trust. Can the trustees make this payment?

Answer:
Yes, if consistent with trust terms. Trustees can consider using the power of advancement (TA 1925 s32 as amended) to advance capital for the beneficiary’s benefit, up to the whole of her presumptive share. Any advance must be brought into account if the beneficiary later becomes absolutely entitled, and consent from any prior life tenant is needed. Trustees should record their reasons (e.g., the opportunity is a significant “start in life”) and ensure the payment aligns with beneficiaries’ best interests and overall trust fairness.

Summary

Key Point Checklist

This article has covered the following key knowledge points:

• The distinction between executors (appointed by will) and administrators (appointed by court), and when authority to act arises
• The main duties and powers of personal representatives in estate administration, including the statutory duty of care (TA 2000 s1)
• Practical protections for PRs (e.g., Trustee Act 1925 s27 advertisements and timing considerations for 1975 Act claims)
• The core responsibilities and fiduciary duties of trustees, including investment duties and authorised delegation under the Trustee Act 2000
• The statutory powers of maintenance (TA 1925 s31) and advancement (TA 1925 s32 as amended), with their practical application
• The differences between personal representatives and trustees in scope, duration, and obligations, and how roles transition where the same person holds both offices
• Requirements on appointment and number of PRs (Senior Courts Act 1981 s114) and the effect of renunciation and “power reserved”

Key Terms and Concepts

• personal representative
• executor
• administrator
• estate
• fiduciary duty
• trustee
• power of maintenance
• power of advancement