Administration of Estates
A personal representative (PR) inherits a dead person's problems along with their property: unpaid gas bills, a mortgage, a share portfolio that needs selling, a sister who has vanished to Spain, and a will that only half-anticipated what would happen. The law's answer to this mess is not a checklist but a fiduciary office — the PR holds every asset of the estate on trust for the people entitled to it, whether that entitlement comes from a will or from the intestacy rules, and every power the PR exercises is exercised for those beneficiaries, never for the PR's own convenience.
Not all personal representatives stand on the same footing, and SQE1 scenarios routinely turn on this distinction. An executor derives authority from the will itself and, in a limited sense, can act from the moment of death — collecting in assets or paying small debts — even though a grant of probate is needed before third parties (banks, the Land Registry) will recognise that authority. Because each executor's power flows independently from the will, executors may generally each act alone. An administrator, by contrast, has no authority at all until the grant of letters of administration is issued, and once appointed, two or more administrators must act jointly and unanimously — there is no independent power to fall back on.
This asymmetry produces one further quirk: the chain of executorship under section 7 of the Administration of Estates Act 1925. If a sole or last surviving executor of an estate dies having themselves appointed an executor, that new executor automatically becomes executor of the original estate too — authority passes down the chain without a fresh grant. Administrators never benefit from this shortcut; the chain is a creature of executorship alone.
Whatever the PR's title, four duties define the job, and they run in a fixed logical sequence:
- Collect in every asset of the estate — calling in debts owed to the deceased, closing accounts, gathering in shares and property.
- Pay the funeral, testamentary, and administration expenses.
- Pay the deceased's debts and liabilities.
- Distribute the residuary estate to those entitled, once expenses, debts, and legacies have been satisfied.
Skipping the order — distributing before debts are cleared, say — is precisely the kind of error that turns a well-meaning PR into a personally liable one, a theme this topic returns to repeatedly.
The statutory duty of care in section 1 of the Trustee Act 2000 requires a PR to exercise such care and skill as is reasonable in the circumstances, but the standard flexes with who is administering the estate. A lay executor — the deceased's daughter, say — is judged against what a reasonably prudent person in her position would do. A professional personal representative acting in the course of business, such as a solicitor or trust corporation charging for the work, is held to the higher standard of a reasonably skilled professional. The law expects more from those who are paid to know better, and this asymmetry resurfaces later when a PR seeks the court's forgiveness for a mistake.
Section 39 of the Administration of Estates Act 1925 gives PRs the same powers of management and disposition over the estate as trustees holding land on a trust for sale — in practice, this is the foundation of the PR's power of sale, allowing assets to be turned into cash to meet debts, expenses, and legacies. Pending distribution, PRs must also invest estate funds prudently, applying the standard investment criteria under the Trustee Act 2000, and must preserve the assets in the meantime — arranging appropriate insurance rather than leaving, say, an uninsured house to sit empty.
Two further powers deserve special attention because they interact with beneficiaries directly:
Appropriation (section 41, Administration of Estates Act 1925). A PR may satisfy a legacy or a share of the estate using a specific asset in kind — appropriating a painting toward a beneficiary's pecuniary legacy, for instance, rather than selling it and handing over cash. This generally requires the beneficiary's consent, unless the will says otherwise, and the appropriated asset must be valued at the date of appropriation, not the date of death — values move, and the beneficiary must receive the asset's worth as it stands when handed over.
Trustees for a minor's share (section 42, Administration of Estates Act 1925). A PR may appoint trustees to hold a minor beneficiary's inheritance on trust, since a minor cannot personally give a valid receipt. This dovetails with a stricter rule on receipts: a valid receipt for capital money on behalf of a minor beneficiary — or for the proceeds of sale of land held on trust generally — requires at least two trustees (or PRs) or a trust corporation, to overreach the beneficiaries' interests properly. A sole PR, by contrast, can give a perfectly valid receipt for pure personalty (cash, shares, chattels), even though that same sole PR lacks authority to give a valid receipt for land alone.
Once an asset is ready to leave the PR's hands and vest in the beneficiary, the vehicle is an assent — and where the asset is a legal estate in land, section 36 of the Administration of Estates Act 1925 insists that assent be in writing.
For a solvent estate, section 34(3) of the Administration of Estates Act 1925 fixes the order in which assets must be applied toward funeral, testamentary, and administration expenses and debts. Under Part II of the First Schedule to the same Act, property that the will fails to dispose of is applied toward debts before property caught by a residuary gift — intestate property takes the hit first, protecting what the testator specifically chose to give away. A PR is not locked into this default sequence, however: where the will contains a contrary direction, that direction governs instead.
Once debts, expenses, and legacies have been dealt with, the leftover legacies rules matter. A specific legacy — a gift of a particular named item — adeems (fails entirely) if that asset no longer forms part of the estate at death; there is nothing left to give. Where the estate cannot pay all pecuniary legacies in full, they abate proportionately, unless the will sets its own order of priority, and specific legacies are protected from abatement until general and residuary gifts have been exhausted first — again, subject to a contrary intention in the will.
If the deceased's debts exceed the estate's assets, the ordinary distribution rules give way to the Administration of Insolvent Estates of Deceased Persons Order 1986, which imports bankruptcy-style rules into estate administration. Beneficiaries drop out of the picture entirely until creditors are satisfied, and creditors themselves must be paid in strict statutory order of priority — not proportionately, and not on a first-come basis.
| Priority (insolvent estate) | Category |
|---|---|
| 1st | Reasonable funeral, testamentary, and administration expenses |
| 2nd+ | Preferential and ordinary unsecured debts, in the order fixed by the 1986 Order |
Get this order wrong — paying a lower-ranked debt before a higher-ranked one — and the PR is exposed to personal liability for the resulting shortfall to the higher-ranked creditor.
Devastavit is the equitable doctrine describing a personal representative's breach of duty that causes loss to the estate. A PR found liable must compensate the estate or the affected beneficiaries out of their own pocket — the office carries real financial exposure, not just a reprimand.
Three fact patterns recur as textbook devastavit: paying a lower-ranked debt ahead of a higher-ranked one in an insolvent estate; distributing the estate before the executor's year has expired without taking proper protective steps; and simply misappropriating estate assets for the PR's own benefit. The first shows how devastavit bites even for an honest procedural slip; the third shows it also catches outright dishonesty — the doctrine spans the whole spectrum.
Section 44 of the Administration of Estates Act 1925 gives every PR breathing room: they are not bound to distribute the estate before one year from the date of death has passed — the executor's year. Beneficiaries generally cannot force an earlier distribution, however impatient they are to receive their inheritance. This matters for legacies too: interest on an unpaid pecuniary legacy generally starts running from the first anniversary of death if it remains unpaid at that point, giving beneficiaries a concrete incentive without undermining the PR's protected year.
Even a careful PR cannot always know who might come forward. The law provides several shields, each covering a different gap:
- Section 27 Trustee Act 1925 notice. A PR may advertise for unknown creditors and claimants by publishing notice in the London Gazette and in a newspaper circulating where the deceased resided or carried on business, giving claimants a minimum of two months and one day from publication to come forward. Once that period expires, the PR may distribute having regard only to claims of which they then actually have notice. Crucially, the notice protects the PR from personal liability — it does not extinguish a claimant's underlying right to pursue the beneficiaries who actually received the wrongly distributed assets, and it gives no protection at all against a claim under the Inheritance (Provision for Family and Dependants) Act 1975.
- The 1975 Act time limit. A claim under the Inheritance (Provision for Family and Dependants) Act 1975 must generally be brought within six months of the grant of representation, absent the court's permission for a late claim. Because a section 27 notice offers no shelter here, prudent PRs generally wait out this six-month window before distributing, regardless of how the section 27 notice period has gone.
- The Benjamin order. Where a beneficiary simply cannot be traced, the PR may apply to the court for a Benjamin order, permitting distribution on a stated assumption about that person (commonly, that they predeceased the testator). Like the section 27 notice, it protects the PR on the assumption stated — it does not extinguish the missing beneficiary's underlying claim if they later resurface. Two lighter-touch alternatives serve the same purpose without a court application: taking out missing beneficiary indemnity insurance, or paying the disputed share into court.
- Section 61 Trustee Act 1925 relief. If, despite everything, a breach has occurred, the court may still relieve a PR from personal liability where they acted honestly and reasonably and ought fairly to be excused. True to the theme running through this topic, courts are markedly less willing to extend this mercy to a professional, paid PR than to a lay one.
- Limitation Act 1980, section 22. Even claims that survive everything above eventually run out of road: a claim to a share or interest in the estate generally must be brought within twelve years of the right accruing, while a claim to recover arrears of interest on a legacy is cut down to six years from when the interest became due.
Where two or more PRs jointly commit a breach, they are generally jointly and severally liable for the loss — each can be pursued for the whole. But liability is not automatically shared: a PR is generally not liable for a co-PR's independent wrongdoing unless they facilitated or concealed it, so an innocent co-executor is not dragged down by a rogue colleague acting alone.
A PR who happens also to be a creditor of the estate may retain enough estate assets to satisfy their own debt — but the old common law right of preference, which once let a creditor-PR jump the queue ahead of other unsecured creditors of equal degree in a solvent estate, no longer applies. The creditor-PR is paid, but no longer paid first merely by virtue of holding the office.
Finally, oversight does not end when the PR believes the job is done: a court may order a PR to produce an inventory and account of the estate's assets and how they were administered — a standing check that keeps the fiduciary duty enforceable long after the grant is issued.