Introduction to wills and estate planning - Roles of personal representatives and trustees

Learning Outcomes

After reading this article, you will be able to identify and explain the appointment, core duties, and legal powers of personal representatives (executors and administrators) and trustees in the context of wills and estate planning. You will also be able to distinguish between these roles, understand their responsibilities to beneficiaries, and apply these principles to SQE1-style scenarios.

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. In your revision, focus on:

• 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

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.

Appointment and Types of Personal Representatives

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

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

• Executors are appointed by a valid will. Their authority comes directly from the will and takes effect immediately on death.
• Administrators are appointed by the court under the Non-Contentious Probate Rules 1987 when there is no will or no executor able or willing to act.

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.

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.

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.

Powers and Legal Authority of Personal Representatives

Personal representatives have statutory powers, including:

• Selling or transferring estate assets
• Continuing a business temporarily if necessary
• Bringing or defending legal claims on behalf of the estate

These powers are subject to fiduciary duties: PRs must act honestly, in good faith, and in the best interests of the estate and beneficiaries.

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

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.

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.

Trustees’ main duties include:

• Acting in the best interests of all beneficiaries (the fiduciary duty)
• Managing trust assets prudently and investing according to the standard investment criteria
• Acting impartially between beneficiaries
• Keeping proper accounts and providing information to beneficiaries

Trustees’ powers are set out in the trust instrument and the Trustee Act 2000. These include powers to invest, acquire land, and delegate certain functions, but always subject to the terms of the trust and their fiduciary obligations.

Worked Example 1.2

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, act impartially, keep records, and provide information to the children or their guardians as required.

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.
• Duration: PRs’ role ends when the estate is fully distributed; trustees’ duties may continue for many years.
• Duties: PRs must pay debts and distribute assets; trustees must manage and invest trust assets for beneficiaries, often with ongoing obligations.
• Beneficiaries: PRs act for all those entitled under the will or intestacy; trustees act for the specific beneficiaries of the trust.

Worked Example 1.3

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, her role as executor ends, but as trustee she continues to manage the trust assets for the grandchildren according to the trust’s terms.

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)
• The main duties and powers of personal representatives in estate administration
• The core responsibilities and fiduciary duties of trustees
• The differences between personal representatives and trustees in scope, duration, and obligations
• The importance of acting in the best interests of beneficiaries and keeping proper records

Key Terms and Concepts

• personal representative
• executor
• administrator
• estate
• fiduciary duty
• trustee