My role as an Administrator – Kathryn McCullough (Private Client Solicitor at Meaby & Co)
What is an Administrator
An Administrator is the person responsible for administering the estate of somebody who has died without a Will (Intestate). The role of Administrator is similar to that of an ‘Executor.’
What does it mean if someone has died Intestate?
To die intestate means that someone has died without a Will or a valid Will in place.
If somebody has died with a valid Will, but where the named Executors are unable or unwilling to act, an Administrator (usually one of the beneficiaries under the Will) shall need to be appointed to administer the Will.
What are the Intestacy Rules?
The Intestacy Rules in England and Wales provide a set of rules that determine who will administer and who will receive the estate of a person who has died without a Will. The ‘Intestacy Rules’ are broadly designed to benefit the deceased person’s family.
Who would benefit under the Intestacy Rules?
If a person dies intestate, the Estate is distributed in accordance with the order of priority set out in the Intestacy Rules. This means the deceased’s nearest blood relatives may inherit, even if the deceased did not personally know them nor want them to inherit their estate.
A surviving partner who was not married or in a civil partnership with the deceased person does not feature in the list of people to benefit under the Intestacy Rules, so they have no automatic right to inherit. Please inform your acting Solicitor if anyone within the deceased’s family is considered a stepchild, an adopted child or a sibling of ‘half-blood’ (otherwise known as a half sibling).
A flowchart of who shall inherit under the Intestacy Rules as of 2019
Please note, as of 2020 the Intestacy Rules were amended so that if the deceased dies leaving a spouse and children, the spouse shall be entitled to the first £270,000 plus personal possessions (as opposed to the £250,000 which was cited in the above flowchart). Your acting Solicitor will advise you of the extant Rules of Intestacy.
How do I become an Administrator?
To become an Administrator, you will need to apply to the Probate Registry for a Grant of Letters of Administration (as opposed to a Grant of Probate). This document gives the person named on the application the authority to administer the deceased person’s estate.
Who can apply to be an Administrator?
The Intestacy Rules set out an order of priority of those relatives who are entitled to benefit from the Estate. Essentially these relatives are entitled to apply to be an Administrator and obtain a Grant of Letters of Administration, which would then enable them to deal with the administration. The order of priority is:
1. Surviving spouse or civil partner
2. Sons or daughters
3. Parents
4. Brothers and sisters
5. More distant relatives
So, for example, if the deceased died leaving behind a spouse, then that spouse would be entitled to apply to be an Administrator in priority to any other family members. What the surviving spouse would inherit depends on what other relatives are still alive and the size of the deceased person’s Estate.
If the deceased is not survived by a spouse or civil partner then any surviving non-minor children can apply to be an Administrator. If no children survive, you must work through the priority list, identifying surviving relatives who would be entitled to apply.
In addition, an Administrator must be :-
1. 18 years of age or more;
2. Considered to have full mental capacity (please inform your Solicitor if you have received a diagnosis which might affect your mental health for example, dementia etc);
3. Must not be bankrupt nor in the process of being made bankrupt (please inform your acting Solicitor if this applies to you).
How do Administrator’s obligations differ from those of an Executor?
Unlike an Executor, whose power emanates from the Will, you do not have an immediate authority to act as an Administrator. Instead, an Administrator’s power emanates from the Grant of Letters of Administration.
The Administrator is legally responsible for administering and distributing the deceased’s estate (their money, property and possessions) in accordance with the Intestacy Rules.
How many people can act as an Administrator?
1. Up to four of the beneficiaries can apply to be Administrators; and
2. All decisions must then be made jointly by the Administrators.
Can I renounce my position as the Administrator?
As long as you have not become too embroiled in the Administration of the estate (“intermeddling”), you will be able to renounce yourself as the Administrator through a “Deed of Renunciation.”
What is my role as an Administrator?
Once you have agreed to accept the role of an Administrator you have a responsibility to the beneficiaries to ensure that the Estate is administered properly. This means establishing the value of the estate, paying any debts, including tax, and distributing the estate to the beneficiaries in accordance with the Intestacy Rules. The law requires this to be done with due diligence.
Often, the Administrator will appoint a Probate Solicitor to assist them with the administration.
The administrative tasks may include:
• Registering the death;
• Ensuring that there is no Will or that there is no later Will than that which you are propounding;
• Opening an Administrator’s bank account;
• Making funeral arrangements;
• Identifying the beneficiaries;
• Establishing the value of the deceased’s assets;
• Ensuring that there is adequate insurance in place for the deceased’s properties;
• Preparing a Schedule of Assets and Liabilities;
• Assessing the Inheritance Tax position and arranging for the payment of the tax;
• Completing the necessary Inheritance Tax Account;
• Preparing an application for a Grant of Administration;
• Calling in the assets upon receipt of the Grant;
• Selling assets, if necessary, to realise cash for the purposes of the administration;
• Distributing the estate to the beneficiaries;
• Transferring the assets to those entitled; and
• Preparing Estate Accounts
Do I need to take out home insurance for the deceased’s residential property?
The Administrator can be personally liable if there is any damage caused to the deceased’s residential property (particularly if valid home insurance is not in place during their appointment).
As an Administrator you should contact a home insurance provider to :-
• Make sure that the deceased has taken out valid home insurance;
• Ensure that the home insurance was not invalidated upon the deceased’s death; and
• Take out home insurance if there is currently no home insurance in place or if the home insurance has become invalid.
If the deceased was paying home insurance, it is strongly advised that you continue to make these payment (keeping receipts in order to reclaim the money from their estate). Please note, should you fail to insure the property or to keep the property insured then you may be liable if the property suffers damage during the administration process.
When can I sell the deceased’s property?
Please note that any property in the deceased’s sole name cannot be sold until a Grant of Administration has been obtained.
Can I sell the property under market value?
No, you must ensure that any property is sold for full market value. If you fail to achieve market value for an asset you risk exposing yourself personally to a claim from the beneficiaries if you have failed to achieve the ‘best price’.
To establish what the ‘best price’ or current market value is, it is advisable that you instruct three estate agents to provide three independent property valuations. Please let your acting Solicitor know if you would like them to recommend estate agents or if you would like them to obtain property valuations from the estate agents on your behalf. Alternatively, or in addition, you may wish to instruct a surveyor to provide a property valuation.
It may be advisable for you to consult the beneficiaries before selling an asset to ensure that they are satisfied with the price. Technically, you do not have to consult with the beneficiaries however, it is advisable that you notify them.
There is a practical advantage to consulting with the beneficiaries, as this can avoid a claim later on should they believe that you sold the property for less than its market value.
Can I be liable to the beneficiaries and creditors for any unpaid debt?
Administrators who have distributed assets of the deceased are personally liable to any beneficiaries or creditors for any unpaid debts and liabilities even though they may not have been aware of them at the time of distribution. In order to protect yourself we can advertise for creditors by giving notice of your intention to distribute assets, requiring any creditor to send in particulars of their claim within the stated time (not being less than 2 months from the notice date). The notice must be placed in the London Gazette and the local newspaper local to where the deceased lived.
Can I claim back my Administrator expenses?
The Trustee Act permits you to reclaim your out of pocket expenses, i.e. those sums that you expend in discharging your duties as Trustee. Please ensure that you keep all of your receipts and present them to your Solicitor who will factor your reasonable disbursements when prepare the Estate Accounts.
Should you have any queries and/or wish to seek guidance to ensure that you are acting in line with your fiduciary duties, then please do not hesitate to contact Kathryn McCullough (Our Private Client Solicitor at kathryn@meaby.co.uk).
