A question of priorities: Understanding who is entitled to a grant of representation

Legacy teams will know that, more and more, charities are being called upon to act as personal representatives (PR) to enable estates to be administered.  In most situations, it is fairly obvious who is entitled to act as PR and obtain a grant of representation in any given case, but, as not all situations are straightforward, a recap on the rules is never a bad idea.

The Non-Contentious Probate Rules 1987 (NCPR) rule 20 sets out the order of priority of who can obtain a grant where the deceased left a will.  Rule 22 outlines the order where the deceased did not leave a will; however, as charities do not inherit on intestacy, legacy teams will naturally be more concerned with rule 20.

In summary, the order of priority in NCPR rule 20 is as follows:

1. Executors
2. Residuary beneficiaries holding their interest on trust for someone else (in other words, a trustee of the residuary estate)
3. Residuary beneficiaries (including those entitled to a life interest in the residuary estate)
4. The personal representatives of residuary beneficiaries (but not where the residuary beneficiary was entitled to a life interest only)
5. Other legatees or devisees (including life interests as above), and creditors
6. The personal representatives of other legatees or devisees (excluding life interests, as above) or of creditors

Given the prevalence of homemade wills, it's helpful to note that the Probate Registry will also consider an executor "according to tenor". This occurs where the will appoints an individual and describes the functions of an executor without expressly using the word executor. An example would be: "I appoint X to collect my assets, pay my liabilities and deliver the remaining sum to my beneficiaries". An executor, according to tenor, is considered equal to a named executor, so rule 20(a) dictates that they would have the highest priority in obtaining a grant of probate.

Typical scenarios

The most common scenarios for charities to act as PR align with rule 20(a), (b) and (c), which collectively give priority to obtain a grant to the executor and residuary beneficiaries respectively.   If the charity falls into one of those categories, and there is no one with higher priority, the charity can then obtain a grant, take on the legal duties tied to being PR and administer the estate, often with the support of a trusted firm of solicitors.  Whilst many charities are appointed as executors of wills, in which case they have the highest priority under rule 20(a), the most common scenario in which a charity acts as PR is where they are residuary beneficiary (or one of them) and there are no executors, perhaps because the named executors have died, renounced or (increasingly) where a professional executor firm no longer exists at death.  As executors and trustees are usually the same people, this wipes out rule 20(a) and (b), and the charity is entitled at rule 20(c). 

Scenario one – specific gifts

Often, charities are the grateful recipients of specific gifts – perhaps the deceased's property – with others named as residuary beneficiaries.  In that situation, it is clear that the residuary beneficiaries have higher priority to apply for a grant and, in most situations, the charities involved will have no problem with them doing so, provided the charitable specific gift is properly administered. 

What about situations where the asset specifically gifted is the only material asset in the estate?  It should be noted that a residuary beneficiary who, in the circumstances of the case, receives nothing (typically because there is no residue, or because it is has been exhausted by debts and expenses) is still considered a residuary beneficiary for the purposes of rule 20(c). To take a hypothetical scenario, a will leaves a property to a charity and the residuary estate to friends. The residuary estate was small and only covered the expenses of the funeral, so the estate was left with only the property going to charity. 

In the absence of executors, NCPR would dictate that a residuary beneficiary has a higher priority than the property gift to charity, so the friends could obtain a grant even though they wouldn’t receive a benefit from the estate. In such a situation, the charity might prefer for the friends to renounce so that the charity can act as PR, but it all depends on the specific circumstances, and a sensible conversation between the charities and individuals involved is always recommended.  One wonders why the friends would want to act in circumstances where they receive no benefit, but it is nevertheless open to them to do so if they wish, and a charity would need a legitimate concern (e.g. that the friends do not intend to manage the estate properly) in order to stand in the way.      

Scenario two – no residuary gift

Professional wills invariably contain residuary gifts.  The same cannot necessarily be said for homemade wills, though, many of which focus on specific assets e.g. "I give my house and money in the bank to X".  If that's the wording, with no residuary gift, then problems can arise if, for example, the deceased owned some shares when they died.  Whilst the courts are more lenient on questions of interpretation where a will is homemade, and may agree to treat such a gift as covering the whole estate, the starting point in the Probate Registry is that the shares are clearly not "my house" nor are they "money in the bank".  As there's no residuary gift to sweep up the shares, a partial intestacy arises as regards any assets not disposed of by the will. 

If there is an executor, they can obtain a grant and administer the estate, and in doing so would need to have regard to the partial intestacy.  If, however, there is no executor, then there are additional provisions in rule 20(c) that apply.  These say that, where there is a partial intestacy, the beneficiaries of that partial intestacy (i.e. the closest blood relatives per the intestacy rules discussed in this article are effectively treated as the residuary beneficiaries.  But it doesn’t end there, as the rule acknowledges that the will, despite not containing a residuary gift, may nevertheless dispose of the whole (or perhaps most) of the estate.  This would be the case if, sticking with the wording above, the deceased only had a house and bank accounts.  In that scenario, the entitlement of the beneficiaries of the partial intestacy remains (even if there is nothing for them to inherit, in theory), but the entitlement of those entitled to the assets specifically mentioned in the will is elevated to the same level of priority, thereby allowing them to apply for a grant.     

There are many other quirky situations that can arise, and it would be impossible to cover them all in one article, but we hope that the above provides an illustration of how rule 20 applies in practice, both in standard situations and some unusual ones. 

Subject to change?

A specialist working group has been appointed to review the NCPR.  At the time of writing, no formal proposals have been released; however, we understand that a consultation exercise is likely to take place this year.  The reforms are expected to revolve around the advancement of technology, procedure and to consider the potential reforms to the Wills Act. We therefore consider it unlikely that there will be any changes to the core topic of who is entitled to a grant, but we await the consultation in due course and will continue to provide updates as and when we know more.

If you have any questions or require assistance with acting as PR, please do get in contact with our charity probate team.