Death and Personal Representatives: General introduction and background: Duties of personal representatives
The first duty of personal representatives is to identify and collect the assets comprising the Estate. They must also establish the liabilities of the Estate. This will include all the liabilities of the deceased at the date of his or her death including any liability for Income Tax or Capital Gains Tax in respect of transactions occurring before death. In addition there may be a liability for Inheritance Tax on the death and there may be liabilities in respect of Income Tax and Capital Gains Tax for the period (the administration period) when the personal representatives are dealing with the Estate. They also have a duty to turn sufficient of the estate into cash to enable them to pay the outstanding liabilities.
Distributing the estate
If the liabilities of the estate exceed the assets (that is, the estate is insolvent) the personal representatives will only make partial payments of the estate’s liabilities. No assets will be available to distribute to legatees.
If the Estate is solvent, the personal representatives have a duty to distribute the net balance to legatees. In doing this executors must follow the wishes of the deceased as set out in the will. Administrators must follow rules laid down by legislation. These rules are set out at TSEM7804+. If there is no will the net balance must be shared out according to the rules of intestacy.
Bona vacantia and ultimus haeres
Where there are no persons who can be traced who would be treated as legatees under the rules of administration the estate is said to be BONA VACANTIA (in Scotland ULTIMUS HAERES). The assets then pass to the Crown (or to the Duchy or Lancaster or the Duchy of Cornwall respectively if the deceased was resident in either of those Duchies).
The period during which the personal representatives are settling the Estate is called the administration period. It starts on the death of the deceased person and usually ends when the residue of the Estate has been ascertained, that is when the net balance of the estate has been identified and sufficient liquid funds provided to enable liabilities to be paid. See CG30700-CG30820 for further details.