Personal representatives and trustees in estate administrati...

Learning Outcomes

This article outlines the powers, duties, and statutory frameworks governing personal representatives and trustees in estate administration, including:

• The statutory and common law sources of authority for personal representatives and trustees, and how these interact with wills and intestacy rules.
• The practical scope of personal representatives’ powers to collect, manage, invest, and distribute estate assets, and how to prioritise debts, expenses, and beneficiary claims.
• Core fiduciary duties, the statutory duty of care, and how far decision-making can be delegated to agents, nominees, or custodians without breaching those duties.
• The mechanics and exam issues around appropriation of assets (AEA 1925, s.41), consent requirements, and the risks of self-appropriation.
• Statutory maintenance and advancement powers (TA 1925, ss.31–32), including their application to minor and adult beneficiaries.
• Trustees’ investment powers, land acquisition and occupation powers, and modern delegation framework under the Trustee Act 2000 (ss.1, 3–5, 8, 11–15).
• Trusts of land powers and beneficiary rights under TLATA 1996 (ss.6, 11–13, 19), especially consultation and occupation rights.
• Personal liability for devastavit, typical breach scenarios, and available court relief.
• Key protections for personal representatives, including statutory advertisements (TA 1925, s.27), indemnities, insurance, payments into court, and Benjamin orders.

SQE1 Syllabus

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

• the statutory sources of authority for personal representatives and trustees (including the Administration of Estates Act 1925 and Trustee Act 2000)
• the powers to collect, manage, and distribute estate assets
• the powers of investment and delegation available to trustees and personal representatives
• the fiduciary duties and limits on powers, including the duty of care, impartiality, and avoidance of conflicts of interest
• the distinction between administrative and dispositive powers, and how these are exercised in practice
• appropriation of assets during administration (AEA 1925, s.41), including consent requirements
• trustees’ standard investment criteria, advice and review obligations (TA 2000, ss.4–5)
• trustees’ power to acquire land and for occupation by beneficiaries (TA 2000, s.8)
• powers affecting minors: receiving money, maintenance (TA 1925, s.31) and advancement of capital (TA 1925, s.32)
• PR powers relevant to practical administration: running a business, postponing distribution, indemnities, insurance, and valid receipts (including a sole PR’s receipt for capital money under LPA 1925, s.27)
• protections for PRs against unknown or missing claimants (TA 1925, s.27; Benjamin orders) and compliance with the “executor’s year” expectation

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. Which statute sets out the general powers of personal representatives to administer an estate?
2. What is the difference between the powers of a personal representative and those of a trustee?
3. Can a trustee delegate investment decisions to an agent? If so, under what conditions?
4. What is the statutory duty of care for trustees, and when does it apply?
5. True or false? A personal representative can distribute the estate before all debts have been paid if the beneficiaries agree.

Introduction

Personal representatives and trustees play central roles in the administration of estates and trusts. Their powers are defined by statute, the terms of the will or trust, and general law. For SQE1, you must know the extent of these powers, the duties attached to them, and the limits imposed by law and fiduciary principles. The framework encompasses core estate administration duties (collecting assets, paying liabilities, ascertaining and distributing residue), trustee management and dispositive powers, and cross-cutting obligations such as the statutory duty of care and fiduciary standards. You must also be comfortable with the practical safeguards available to personal representatives when faced with unknown creditors or missing beneficiaries and with the beneficiary-facing rights that can shape how land held on trust is managed.

Key Term: personal representative
A person appointed to administer a deceased’s estate, either as executor (named in a will) or administrator (appointed under intestacy).

Powers of Personal Representatives

Personal representatives (PRs)—executors or administrators—are responsible for collecting, managing, and distributing the assets of a deceased person’s estate.

Statutory Authority

The main statutory powers of PRs are found in the Administration of Estates Act 1925 (AEA 1925), supplemented by trustee legislation:

• Section 25 AEA 1925: PRs must collect and get in the real and personal estate of the deceased and administer it according to law. This anchors the administration timeline and standards.
• Section 33 AEA 1925: On intestacy, property devolves upon the PRs on statutory trusts; PRs hold the estate with a power of sale to realise assets for administration and distribution.
• Section 39 AEA 1925: PRs have the functions of trustees of land under TLATA 1996 for realty, effectively giving broad management powers similar to those of an absolute owner when administering land.
• Section 41 AEA 1925: PRs have power to appropriate assets towards satisfaction of legacies or shares, subject to consent and without prejudice to specific beneficiaries.
• Law of Property Act 1925, s.27(2): A sole PR can give a valid receipt for capital money arising from land (contrast with the two-trustee requirement that applies to trustees’ sales of land).
• The Trustee Act 2000 extends trustee-style management and duty of care standards to PRs when investing, delegating, acquiring land, or insuring.

Key Term: power of sale
The authority to sell estate assets to pay debts, liabilities, or for distribution.

Key Term: statutory trust
A trust that arises by operation of statute on intestacy, under which PRs hold the residuary estate with powers (including sale) for administration and distribution.

Main Powers

PRs have the following core powers, exercised subject to fiduciary duties and the statutory duty of care:

• Collecting assets: PRs can demand delivery of all estate property, including money, investments, and land. Administrators’ authority derives from the grant; executors’ authority arises from the will but a grant is usually needed as evidence to third parties.
• Paying debts and liabilities: PRs must pay funeral, testamentary, and administration expenses, taxes, and other debts before distribution. They should prioritise secured debts against the secured property and settle unsecured debts in the statutory order.
• Power to sell, mortgage, or lease: PRs have broad powers to realise assets and raise cash to meet expenses, debts, and legacies. When deciding what to sell, PRs should consider dispositions in the will, future destination of property, market conditions, and tax impacts.
• Distributing to beneficiaries: Once debts and expenses are paid, PRs distribute the remaining assets according to the will or intestacy rules. PRs are expected to complete administration and be ready to distribute within the “executor’s year” (commonly referenced under AEA 1925, s.44).
• Appropriation: PRs can transfer specific assets to beneficiaries in satisfaction of their entitlement, subject to statutory requirements and consents. Appropriation must not prejudice specific beneficiaries and, unless the will provides otherwise, usually requires consent of the person beneficially entitled (or trustees/life tenant where the legacy is settled). A PR should not appropriate to themselves to satisfy a pecuniary legacy except with cash or its equivalent and only if authorised.

Key Term: appropriation
The transfer of a specific asset to a beneficiary in satisfaction of their share or legacy.

• Receipts and transfers: A sole PR may give a valid receipt for capital money; however, all PRs should join in transfers of land and shares.
• Postponing distribution: PRs may postpone distribution where necessary for orderly administration, in good faith and with regard to beneficiaries’ interests.

Administrative Powers

PRs also have administrative powers similar to those of trustees, including:

• Investment: PRs may invest estate funds pending distribution, subject to the statutory duty of care. The Trustee Act 2000 gives a general power of investment and requires PRs to:
  • have regard to suitability and diversification, and
  • obtain and review proper advice where appropriate.

Key Term: standard investment criteria
Suitability to the trust/estate and the need for diversification (TA 2000, s.4).

• Acquiring and holding land: PRs may acquire UK freehold or leasehold land for investment or for occupation by a beneficiary (TA 2000, s.8).
• Delegation: PRs may delegate certain functions (e.g., investment management) to agents, but remain responsible for oversight. Appointment must be in writing, with a written policy statement setting objectives and restrictions. PRs must periodically review both the agent’s performance and the policy and are liable only if they fail to meet the statutory duty of care in appointment or review.

Key Term: statutory duty of care
The obligation to exercise such care and skill as is reasonable in the circumstances, having regard to any special knowledge or experience and to professional status (TA 2000, s.1).

• Insurance: PRs can insure estate property against risks to full value; duty of care applies when exercising the power to insure.
• Indemnity for expenses: PRs may reimburse themselves for properly incurred expenses.
• Running the deceased’s business: PRs may carry on a sole trade to preserve or sell it as a going concern where appropriate, and should check the partnership agreement or company articles if the deceased was a partner or shareholder.
• Powers affecting minors:
  • PRs can accept receipts from an appropriate adult for a minor’s property where authorised by the will; otherwise PRs may appoint trustees for minor beneficiaries.
  • Trustees holding property for a minor may apply income for maintenance, education, or benefit (TA 1925, s.31), or accumulate income until it becomes payable.
  • Trustees may advance capital for a beneficiary with a vested or presumptive share (TA 1925, s.32), including to minors, subject to any prior life tenant’s consent.

Key Term: maintenance
Application of trust income for a minor’s maintenance, education, or benefit under TA 1925, s.31.

Key Term: power of advancement
Discretionary payment of capital in advance of a beneficiary’s absolute entitlement under TA 1925, s.32.

Fiduciary Duties

PRs are fiduciaries and must:

• Act in the best interests of the estate and beneficiaries, and administer with due diligence.
• Avoid conflicts of interest and not profit from their position (absent an express charging clause or statutory authority for professional remuneration).
• Keep proper accounts and provide information to beneficiaries.
• Observe the statutory duty of care when investing, delegating, acquiring land, or insuring.

Key Term: fiduciary duty
The obligation to act loyally, honestly, and in good faith for the benefit of others (here, the estate and beneficiaries).

Key Term: devastavit
A breach of duty by a personal representative causing loss to the estate (through misappropriation, maladministration, or negligence).

PRs are personally liable for a devastavit. The court may relieve a PR from personal liability if satisfied they acted honestly and reasonably and ought fairly to be excused. A PR is not generally liable for a co-PR’s breach unless they were negligent or failed to perform their own duties to safeguard the estate.

PRs can protect themselves from later claims by unknown creditors or beneficiaries by placing statutory advertisements (TA 1925, s.27) and undertaking appropriate bankruptcy and property searches. If beneficiaries or creditors are missing or untraceable, PRs may pay funds into court, obtain a Benjamin order permitting distribution on stated assumptions (e.g., treating a missing beneficiary as predeceased), or obtain indemnities/insurance after making full enquiries.

Key Term: Benjamin order
A court order authorising distribution on the assumption a missing beneficiary has died before the deceased, protecting PRs who have made full enquiries.

Powers of Trustees

Trustees manage property held on trust for beneficiaries. Their powers are derived from the trust instrument and statute, mainly the Trustee Act 1925, Trustee Act 2000, and TLATA 1996.

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

Statutory Powers

Key statutory powers include:

• Investment (Trustee Act 2000, s.3): Trustees have a general power to invest trust property as if they were the absolute owner, subject to the trust instrument and statutory criteria.
• Standard investment criteria (TA 2000, s.4): Trustees must consider suitability and diversification; they must keep investments under review.
• Advice (TA 2000, s.5): Trustees should obtain and consider proper advice on investments unless inappropriate given the circumstances.
• Acquiring land (TA 2000, s.8): Trustees may acquire UK land for investment, for occupation by a beneficiary, or for any other reason; they have the powers of an absolute owner in relation to land they hold.
• Delegation (TA 2000, s.11; s.15): Trustees may delegate functions (including investment) to agents if they set clear written terms (policy statement) and keep arrangements under periodic review. They may also appoint nominees and custodians.
• Power to insure: Trustees have a statutory power to insure trust property; the TA 2000 duty of care applies when exercising this power.

Note: The power to insure is a long-standing trustee power; the TA 2000 imposes the duty of care when trustees exercise it. Always check the current statutory footing and any express provisions in the trust instrument.

Administrative and Dispositive Powers

• Administrative powers: Concern management of trust property (e.g., investment, sale, insurance, acquiring land, appointing agents, managing businesses, taking indemnities).
• Dispositive powers: Concern the distribution of income or capital to beneficiaries, as set out in the trust instrument and applicable statutes (e.g., maintenance and advancement).

Key Term: administrative power
A power relating to the management and preservation of trust property.

Key Term: dispositive power
A power to distribute trust income or capital to beneficiaries.

Trustees must also consider TLATA 1996 where the trust consists of or includes land:

• TLATA 1996, s.11: Duty to consult beneficiaries with an interest in possession about functions relating to land and, where consistent with the general interests of the trust, to give effect to their wishes.
• TLATA 1996, s.12–13: Rights of occupation and the trustees’ power to impose reasonable conditions (e.g., paying outgoings, compensation) on beneficiaries with a right to occupy.
• TLATA 1996, s.19: Beneficiaries who are all sui juris and together entitled to the whole beneficial interest may direct the retirement and appointment of new trustees, unless excluded by the trust instrument.

Duty of Care and Investment

Trustees must comply with the statutory duty of care (TA 2000, s.1) when exercising investment and delegation powers. They must:

• Consider the suitability and diversification of investments.
• Obtain and review proper advice where appropriate (adviser need not be a professional if competent; advice may be unnecessary for very small or straightforward decisions).
• Regularly review investments and decisions in light of the trust’s purposes, beneficiaries’ interests, and risk profile.
• Document their decision-making and periodic reviews.

Trustees may adopt ethical or non-financial investment screens if authorised by the trust instrument or where consistent with the trust’s purposes and beneficiaries’ best interests, provided they do not compromise the overall duty to invest prudently.

Delegation and Oversight

When delegating functions, trustees must:

• Enter into a written agreement and provide a written policy statement setting investment objectives and restrictions.
• Keep the arrangements under review, including performance monitoring at suitable intervals and revisiting the policy statement.
• Remain ultimately responsible for the trust, being liable only if they fail to meet the duty of care in appointment or review.
• Avoid delegating dispositive decisions unless expressly authorised by the trust instrument or statute.

Fiduciary Obligations

Trustees must:

• Act in accordance with the trust instrument and for proper purposes.
• Treat all beneficiaries impartially where appropriate and avoid conflicts of interest.
• Keep accounts, provide information to beneficiaries, and maintain confidentiality consistent with trust law and data protection obligations.
• Not profit from their position (unless reserved by an express charging clause or permitted under TA 2000, s.29 for trust corporations or professional trustees with proper consent).

They must also observe the traditional self-dealing and fair-dealing rules:

• Self-dealing: A trustee cannot purchase trust property in their fiduciary capacity without court sanction; such transactions are voidable at the beneficiaries’ instance.
• Fair dealing: A trustee may, in limited circumstances, purchase a beneficiary’s equitable interest if they deal at arm’s length with full disclosure and fairness; the transaction is scrutinised for propriety.

Limits on Powers

Trustees and PRs cannot:

• Act outside the scope of their statutory or express powers, or contrary to the trust instrument.
• Distribute assets before all debts and liabilities are paid (PRs must not distribute prematurely).
• Delegate dispositive powers unless expressly permitted.
• Appropriate or advance in a manner that prejudices specific beneficiaries or exceeds statutory/express limits.
• Engage in self-dealing without proper authority.

They must also respect any restrictions in the will or trust instrument (e.g., “ethical investment” constraints or prohibitions on investments abroad).

Appointment, Retirement, and Removal of Trustees

Trustees may be appointed, retire, or be removed as follows:

• Appointment: By the trust instrument, existing trustees (TA 1925, s.36), or the court (TA 1925, s.41). Check any express “protector” provisions or reserved powers of appointment.
• Number of trustees: There may be practical limits (for example, no more than four trustees can take a single grant of representation regarding the same property); for trusts of land, two trustees (or a trust corporation) are usually prudent to give a valid receipt for capital monies.
• Retirement: Trustees may retire if at least two trustees or a trust corporation remain (TA 1925, s.39), with retirement effected by deed and consent of co-trustees (and any person holding a power to appoint).
• Removal: Trustees may be removed for incapacity, misconduct, or by court order; beneficiaries who are all sui juris and collectively entitled may direct retirement/appointment (TLATA 1996, s.19), unless excluded.

Worked Example 1.1

Scenario: The will of the deceased appoints two executors. One executor wishes to retire before the estate is fully administered. Can they do so, and what is required?

Answer:
Yes, an executor (as trustee) may retire if at least two trustees or a trust corporation remain. The retirement must be by deed, and the continuing trustees must consent. If retirement would leave fewer than two trustees for ongoing trust functions (e.g., a continuing trust of land), a replacement should be appointed under TA 1925, s.36.

Worked Example 1.2

Scenario: A trustee wishes to delegate investment management to a professional agent. What must the trustee do to comply with the law?

Answer:
The trustee must provide the agent with a written policy statement setting out investment objectives and restrictions, regularly review the agent’s performance and the policy statement, and ensure the delegation is in the beneficiaries’ best interests. Appointment must be in writing; the trustee remains responsible for oversight and is liable only if they fail to exercise the statutory duty of care in appointing or reviewing the agent.

Worked Example 1.3

Scenario: A personal representative distributes the estate to beneficiaries before paying all known debts. A creditor later claims payment. Who is liable?

Answer:
The personal representative is personally liable to pay the creditor if they distributed the estate prematurely. PRs must ensure all debts and expenses are settled before distribution. PRs should use statutory advertisements (TA 1925, s.27) and appropriate searches to protect against unknown claims and avoid personal exposure.

Worked Example 1.4

Scenario: The residue includes quoted shares and a beneficiary’s share is £50,000. The PR proposes appropriating a specific holding valued at £50,000 to that beneficiary in satisfaction of their share. Are any consents needed?

Answer:
Appropriation must not prejudice specific beneficiaries and, unless the will removes the consent requirement, the beneficiary beneficially entitled should consent. If the beneficiary’s interest is settled, consent of the trustees or the life tenant (if of full age and capacity) is required. The PR must consider suitability and equivalence of value at the time of appropriation and record the valuation used.

Worked Example 1.5

Scenario: A trustee wants to purchase trust property (a flat) personally at market value because they need accommodation. Is this permissible?

Answer:
Generally no. The self-dealing rule prevents a trustee buying trust property in their fiduciary capacity without court sanction; such transactions are prima facie voidable at beneficiaries’ instance. The trustee may seek court permission; absent that, the safer route is to resign and ensure a fully independent sale process.

Worked Example 1.6

Scenario: A beneficiary entitled to a presumptive one-quarter share asks trustees for £40,000 to buy a first home at a discount. The fund is £200,000. Can trustees use the power of advancement?

Answer:
Yes, trustees may advance capital under TA 1925, s.32 up to the beneficiary’s presumptive share (here £50,000) if the advancement is for the beneficiary’s advancement in life (e.g., a home purchase). If a life tenant has a prior interest, their consent is needed. The amount advanced is brought into account when the beneficiary’s absolute entitlement arises.

Exam Warning

A common error is to confuse the powers of personal representatives with those of trustees. Remember: PRs act for the estate until distribution; trustees manage property held on trust, often after the estate is distributed.

Revision Tip

When answering SQE1 questions, always identify whether the person is acting as a personal representative or as a trustee, as their powers and duties may differ.

Key Point Checklist

This article has covered the following key knowledge points:

• The statutory sources of authority for personal representatives and trustees in estate administration.
• The main powers of personal representatives: collecting assets, paying debts, investing, selling, and distributing the estate.
• Appropriation by PRs (AEA 1925, s.41) and the consent requirements; receipts for capital money and transfer formalities.
• The core powers of trustees: general investment power, standard investment criteria, advice, delegation, acquisition and management of land, insurance, maintenance and advancement.
• TLATA 1996 duties and rights relating to trusts of land (consultation, occupation, beneficiaries’ power to direct retirement/appointment).
• The fiduciary duties and statutory duty of care applying to both roles; self-dealing and fair-dealing constraints; charging clauses.
• The limits on powers, including the need to act within authority, avoid conflicts of interest, and not distribute before paying liabilities.
• PR protections against unknown and missing claimants (statutory advertisements, payments into court, Benjamin orders, indemnities).
• The procedures for appointment, retirement, and removal of trustees, and practical considerations around number of trustees.

Key Terms and Concepts

• personal representative
• power of sale
• statutory trust
• appropriation
• standard investment criteria
• statutory duty of care
• maintenance
• power of advancement
• fiduciary duty
• devastavit
• trustee
• administrative power
• dispositive power
• Benjamin order