PastPaperHero | Personal representatives - Administrative powers of personal representatives

Learning Outcomes

This article covers the administrative powers and duties of personal representatives in estate administration, including:

the statutory sources, structure, and interaction of AEA 1925, TA 1925, TA 2000, and related provisions governing administrative powers
how personal representatives collect, realise, protect, invest, and distribute estate assets, and when they may postpone distribution
the scope of powers to sell, mortgage, lease, insure, and otherwise manage estate property, including land and business assets
the statutory and equitable rules on appropriation, maintenance, and advancement, with emphasis on consent, valuation, and accounting requirements
the rules on delegating investment and administrative functions, appointing agents, nominees, and custodians, and supervising them under TA 2000
the content of the statutory duty of care, fiduciary obligations, and the need for impartiality between beneficiaries with different interests
restrictions on self-dealing, conflicts of interest, and remuneration, particularly where personal representatives also act in a professional capacity
how breaches of duty arise in practice, the consequences for personal representatives, and the potential for court relief under TA 1925 s.61
typical SQE1 examination issues and traps relating to administrative powers, with an emphasis on statutory references and practical application

SQE1 Syllabus

For SQE1, you are required to understand the administrative powers and duties of personal representatives in the context of estate administration, with a focus on the following syllabus points:

the statutory sources of PRs’ powers (especially the Administration of Estates Act 1925 and Trustee Act 2000)
the scope of PRs’ powers to collect, manage, invest, and distribute estate assets
the rules on delegation of functions and appointment of agents, nominees, and custodians
the fiduciary duties and standard of care required of PRs, including liability for breach
the practical application of these powers and duties in administering estates, including the handling of complex or international assets
the power to sell, mortgage, or lease estate assets, and to insure and postpone distribution within the executor’s year
the differences between appropriation (AEA 1925 s.41) and maintenance/advancement (TA 1925 ss.31–32), including consent and valuation requirements

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.

Which statute sets out the general administrative powers of personal representatives in England and Wales?
Can a personal representative delegate investment decisions to a professional agent? If so, under what conditions?
What is the standard of care required of a personal representative when managing estate assets?
What is the difference between a personal representative’s power to appropriate and their power to advance capital?

Introduction

Personal representatives (PRs) are responsible for administering the estate of a deceased person. Their administrative powers are defined by statute and shaped by fiduciary duties. For SQE1, you must know the scope and limits of these powers, the statutory sources, and the standard of care required. This article covers the key administrative powers of PRs, including asset management, delegation, and distribution, and highlights the duties and liabilities that accompany these powers.

Key Term: personal representative
A person appointed to administer the estate of a deceased individual, either as an executor (named in a will) or as an administrator (appointed under intestacy rules).

PRs must perform two core functions: manage the estate responsibly until distribution (collecting and realising assets; investing and preserving property; paying debts, taxes, and expenses), then distribute to those entitled under the will or intestacy once liabilities are settled. Authority to act derives from the will for executors (technically from the date of death), but administrators acquire authority only upon grant. In practice, third parties (banks, registries) typically require sight of a grant before dealing with PRs.

Statutory Sources of Administrative Powers

The main statutory sources for the administrative powers of PRs are the Administration of Estates Act 1925 (AEA 1925) and the Trustee Act 2000 (TA 2000). These statutes set out the framework for collecting, managing, investing, and distributing estate assets.

AEA 1925 confirms PRs’ duty to “collect and get in” the deceased’s real and personal estate and to administer with due diligence (including payment of debts and legacies).
AEA 1925 s.39 grants broad powers over land and personalty, including the functions of a trustee of land under TLATA 1996 (e.g. powers to sell, mortgage, lease).
AEA 1925 s.41 provides the statutory power of appropriation to satisfy a beneficiary’s entitlement with specific assets, subject to consent requirements.
Trustee Act 1925 ss.31–32 confer powers of maintenance (income for minors) and advancement (capital for beneficiaries), as modified by later legislation.
Trustee Act 2000 s.3 provides a general power of investment; s.4 sets standard investment criteria; s.5 requires consideration of proper advice; s.1 sets the duty of care; s.11 and ss.16–20 govern delegation and the appointment of agents, nominees, and custodians.

Key Term: asset realisation
The process by which PRs collect, sell, or otherwise convert estate assets into cash or other forms suitable for paying debts and distributing to beneficiaries.

Powers to Collect and Manage Assets

PRs have broad powers to collect in and manage all assets of the estate. These powers are similar to those of an absolute owner, subject to statutory and fiduciary constraints.

Real property devolves to PRs for the purposes of administration (freeing them to sell and transfer title). Personalty devolves at common law for executors and on grant for administrators.
PRs can sell, mortgage, or lease estate property to raise funds for taxes, debts, funeral and administration expenses, and pecuniary legacies (AEA 1925 s.39).
PRs should consider will directions, beneficiaries’ reasonable wishes, and tax consequences when choosing which assets to sell, and preserve value pending distribution (e.g. insuring assets, securing premises, maintaining investments).
PRs may insure trust/estate property to its full value; insurance proceeds are capital and applied to restore or reinstate property.

PRs can postpone distribution. The “executor’s year” (an informal expectation reflected in AEA 1925 s.44) allows PRs up to 12 months from death to complete administration before distributing. PRs must act efficiently and avoid undue delay, but they should not distribute prematurely when liabilities remain unclear or potential claims may arise.

A practical collection rule: a sole PR may give a valid receipt for capital money arising on a sale of land (contrary to the two‑trustee overreaching rule that applies to trustees of land). However, all PRs should join in executing transfers of land and share transfers to effect registration.

Investment Powers

PRs have the power to invest estate assets under the TA 2000, unless the will or trust instrument provides otherwise. They must consider the suitability of investments and the need for diversification.

Key Term: standard investment criteria
The statutory requirements under TA 2000 s.4 that trustees (including PRs) must consider when making investment decisions: suitability and diversification.

Key investment points:

General power of investment (TA 2000 s.3): PRs may make any kind of investment as if absolutely entitled, subject to statutory and express restrictions in the will (e.g. prohibiting certain sectors or investments).
Standard investment criteria (TA 2000 s.4): consider suitability to the estate’s needs (risk, liquidity, yield, duration) and diversification to spread risk.
Proper advice (TA 2000 s.5): PRs must obtain and consider proper advice (not necessarily from a regulated professional) before exercising investment powers or reviewing investments, unless the amount or circumstances make it reasonable not to do so.
Ongoing review: investment decisions should be kept under periodic review to ensure continued suitability and diversification.
Land acquisition power (TA 2000 s.8): PRs may acquire UK land (freehold or leasehold) for investment, occupation by a beneficiary, or other reasons. Statute does not authorise purchasing land abroad or acquiring an interest in land jointly with another person unless the will grants that power.

Ethical investment may be permitted if consistent with the trust’s purposes and the PRs’ duty to act in the beneficiaries’ best interests; any express ethical constraints in the will must be observed.

Power to Continue a Business

If the estate includes a business, PRs may continue to run it temporarily if this is necessary for the proper administration of the estate. However, unless the will expressly authorises long-term continuation, PRs should aim to sell or wind up the business within a reasonable time.

When considering continuation:

A sole trade may be carried on only to preserve value and effect a sale as a going concern; trading beyond a reasonable period or without authority risks personal liability.
For partnerships, check the partnership agreement—there may be buy-out or continuation provisions.
If the deceased was a shareholder/director, review the company’s articles for transfer restrictions, director appointment rules, and any buy-back mechanisms.

PRs should separate trading accounts and keep detailed records if temporary trading is unavoidable, ensuring insurance and regulatory compliance to minimise risk.

Power to Appropriate and Advance

PRs may appropriate specific assets to a beneficiary in satisfaction of their entitlement, subject to statutory requirements and the need for consent from interested parties (AEA 1925 s.41).

Key Term: appropriation
The allocation of a specific asset to a beneficiary in satisfaction of their entitlement under the will or intestacy.

Appropriation points:

Consent requirements: an absolutely entitled beneficiary must consent. Where interests are settled, consent is required from trustees or the person currently entitled to income (if of full age and capacity). If PRs are also trustees and there is no adult income beneficiary, appropriation must be in authorised investments.
Valuation and fairness: the asset’s value at appropriation must correspond to the beneficiary’s entitlement; appropriation must not prejudice specific legatees or other beneficiaries.
Appropriation by PRs in their own favour is generally impermissible for pecuniary legacies unless the asset is cash or a cash equivalent (e.g. quoted investments) or the will permits it.

PRs may also advance capital to a beneficiary before their interest vests, under TA 1925 s.32, if the trust instrument allows.

Key Term: advancement
The payment or application of capital to or for the benefit of a beneficiary before their interest in the estate becomes absolute.

Key advancement points:

Scope: s.32 permits advancement of the whole of a beneficiary’s vested or presumptive share (modern law permits up to the full share), subject to consent of any prior life tenant.
Accounting: any advancement is brought into account when the beneficiary’s absolute entitlement arises, unless varied by the will.
Non-recovery: if advancement is made before satisfaction of a contingency and the contingency later fails, the amount advanced is not recoverable.

Key Term: maintenance
The application of income for the maintenance, education, or benefit of a minor beneficiary, as permitted by TA 1925 s.31.

Maintenance points:

Income may be applied for minors’ maintenance, education, or benefit; otherwise income is accumulated.
Once the beneficiary attains 18, ongoing income is ordinarily paid to them (unless the will postpones the age).
Wills frequently vary s.31 to postpone the right to income (e.g. to age 21), preserving trustees’ discretion to apply or accumulate income.

Delegation of Functions

PRs may delegate certain functions, especially investment management, to agents under TA 2000 s.11. They must exercise due diligence in selecting, appointing, and supervising agents. Delegation does not absolve PRs of ultimate responsibility.

Key Term: delegation
The lawful appointment of an agent to perform certain functions on behalf of the PR, subject to statutory conditions and ongoing supervision.

Core delegation rules:

Written terms and policy: when delegating investment functions, PRs should appoint in writing and provide a written policy statement setting objectives, risk limits, and constraints. The arrangement must be reviewed periodically.
Oversight: PRs must monitor performance and compliance with the policy, revising instructions and replacing the agent if necessary.
Liability: PRs are liable for losses only if they fail their duty of care in selecting, instructing, or supervising the agent. If they comply with s.1 TA 2000, they are not vicariously liable for the agent’s default.
Nominees and custodians (TA 2000 ss.16–20): PRs may appoint nominees to hold property and custodians to safeguard assets, on similar terms of appointment and review.

PRs may delegate routine administrative functions; they must not delegate dispositive discretions (e.g. deciding to appropriate or distribute assets) unless expressly authorised by the will or statute.

Worked Example 1.1

A PR is administering an estate that includes a large share portfolio. The PR has no investment experience. Can the PR delegate investment decisions to a stockbroker?

Answer:
Yes, under TA 2000 s.11, the PR may delegate investment management to a professional agent, provided they select a suitable agent, give clear written instructions (including a policy statement), and review the agent’s performance regularly. The PR remains responsible for oversight and must exercise the statutory duty of care throughout.

Fiduciary Duties and Standard of Care

PRs are fiduciaries and must act in the best interests of the estate and all beneficiaries. They must avoid conflicts of interest and not profit from their position unless expressly authorised.

Key Term: fiduciary duty
The obligation to act honestly, in good faith, and solely for the benefit of the estate and its beneficiaries.

Fiduciary essentials:

Impartiality: PRs must act even‑handedly between beneficiaries of different classes or interests (e.g. life tenants vs remaindermen).
Self‑dealing and fair‑dealing: PRs must not purchase estate property for themselves without court sanction; any dealings with beneficiaries must be scrupulously fair and fully disclosed.
Remuneration: PRs may recover properly incurred expenses. Professional PRs may charge only if authorised by an express charging clause or (where acting in a professional capacity) under TA 2000 s.29 with co‑PRs’ consent. Absent authority, they must not remunerate themselves.
Accounting and disclosure: PRs must keep accurate records and accounts and provide information reasonably requested by beneficiaries.

Standard of Care

Under TA 2000 s.1, PRs must exercise such care and skill as is reasonable in the circumstances, taking into account any special knowledge or experience they have or claim to have.

Key Term: duty of care
The statutory obligation to act with the care and skill that is reasonable in the circumstances, especially when managing or investing estate assets.

Schedule 1 to TA 2000 confirms the duty applies to investment, acquisition of land, appointment and review of agents/nominees/custodians, and insurance. The standard is heightened for professional PRs or those holding themselves out as having particular skill.

Worked Example 1.2

A PR is a qualified accountant and is managing a complex estate. What standard of care is required?

Answer:
The PR must exercise the care and skill that a reasonably prudent accountant would use in similar circumstances, reflecting their professional competence. This includes robust financial analysis, prudent investment oversight, and scrupulous record‑keeping consistent with TA 2000 s.1.

Liability for Breach

PRs may be personally liable for losses caused by breach of duty. Liability is joint and several if there are multiple PRs. However, the court may relieve a PR from liability if they acted honestly and reasonably (TA 1925 s.61).

Common exposure points:

Devastavit: misappropriation, maladministration (e.g. premature distribution), or negligent failure to collect assets or pay debts may lead to personal liability to unpaid creditors/beneficiaries.
Co‑PRs: one PR is not automatically liable for another’s breach unless they failed to supervise or themselves breached duty (e.g. turning a blind eye to a co‑PR’s defaults).
Delegation: failure to exercise appropriate care in selecting/instructing/supervising an agent can expose PRs to liability for resulting losses.

Worked Example 1.3

Two PRs fail to review an agent’s performance, resulting in a significant loss to the estate. Are they liable?

Answer:
Yes, both PRs may be personally liable for the loss due to failure to supervise the agent properly under TA 2000 s.1 and s.11. The court may relieve them only if they acted honestly, reasonably, and ought fairly to be excused (TA 1925 s.61), but an absence of periodic review and documented oversight makes relief unlikely.

Exam Warning

PRs must not delegate discretionary or decision-making powers (such as the power to appropriate or distribute assets) unless expressly authorised. Delegation of such powers without authority is a breach of duty.

Revision Tip

Always check the will or trust instrument for express provisions that modify or exclude statutory powers or duties. Statutory powers apply only if not excluded or varied by the instrument.

Additional Practical Powers and Considerations

Beyond core collection and investment, several practical powers assist PRs in safe administration:

Power to insure: PRs should insure estate assets adequately; insurance proceeds are capital used to reinstate property.
Receipts for minors: a minor cannot give a valid receipt. PRs may appoint trustees for a minor’s vested property or accept receipts from a person with parental responsibility if the will so authorises; best practice is an express clause for parental receipts and/or minor receipts from age 16. Contingent gifts must await vesting.
Indemnity for expenses: PRs may reimburse themselves for all properly incurred expenses in the course of administration.
Sale, mortgage, and lease: PRs can realise assets to meet liabilities, giving valid receipts (note that for transfers of land and shares, all PRs should execute to ensure registration proceeds smoothly).
Choice of assets to sell: consider will directions, statutory incidence of debts (e.g. secured debts under AEA 1925 s.35; gifts “free of mortgage” are exonerated from residue), beneficiaries’ preferences, and capital gains/inheritance tax impacts before deciding.