Need for Grant of Letters of Administration

I have always been slightly confused by the fact that an administrator has no authority before a grant is issued and the fact that a grant is not needed to realise certain assets. Surely, that means that even though the relevant organisation may not require a grant, the administrator should still obtain one as, otherwise, despite the fact the organisation is willing to transfer the asset to him, he has no legal authority to hold the asset. However, my understanding is the usual advice is that, regardless of the fact the person is an administrator, a grant is not needed if the estate only comprises assets that can be realised without a grant.

Whilst very convenient for the institution, the person receiving the payment is put in a difficult position as they have the asset but none of the protections of a personal representative.

The lack of a grant means the individual is in the same position as a trustee de son tort, so that (amongst other downsides):

  • no time runs against the issue of an IPFDA claim;
  • if someone else obtains a grant, the payee will be liable to account for what they have received (and if they have signed an indemnity they will need to repay the institution with no right of set off for the benefit to which they may be entitled);
  • the payee may become liable for any debts of the deceased, including any overpayment of DWP benefits (which might exceed what they have been paid).

Other than in exceptional circumstances, I would be reluctant to advise that even if assets can be obtained without a grant, no grant is obtained unless the payee is fully acquainted with, and accepts, the downsides flowing from the lack of a grant.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

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One point I did not quite follow is why the executor de son tort would become liable to repay the institution? Presumably, if he repays the executor the money he got from the institution, the executor is not going to seek repayment from the institution and hence no need for the executor de son tort to indemnify the instituion.

The Administrator would usually sign an indemnity so the institution is protected from other parties claiming the funds, or can ask for it back if the A is found to be untruthful/not entitled