Charities acting as Personal Representatives – part one

Acting as the Personal Representative ("PR") of an estate is something that you may have to consider when your charity is first notified of a new estate. There are different circumstances when your charity may need to act as PR:

• Your charity is named in the Will as the Executor and Trustee of the estate.
• Your charity takes up the role of PR as a residuary beneficiary, as the appointed executors have either renounced, are unable to act or have predeceased the testator.
• The appointed executor has died during the administration of the estate and there is no chain of executorship.

Key things to consider before acting as PR

In most cases, it will be perfectly safe and appropriate for your charity to act as the PR, but it’s important to review all of the information before agreeing to take up the role.

Assessing the risk at the outset of the estate before deciding whether or not to act as PR is essential. You should gather as much information as you can before considering whether to act. This includes checking whether your charity has the power to take out Grants and act as Executor. This should be addressed in your constitutional documents such as your Articles of Association and the charity's objects must be sufficiently wide to enable it to act as executor.

It is also useful to check your internal case management system to check whether the deceased was a lifelong supporter of your charity. In addition, friends, family and neighbours are often able to assist at the outset with any queries and may be able to provide background information, for example, why the appointed executors are not acting or to confirm that the deceased owned a property etc. 

Some of the main points to consider when deciding whether or not to take up the role of PR are:

• Is the estate solvent or insolvent?
• Is there a cross-border element?
• Are there business and/or agricultural assets?
• Contentious elements including claims and family dynamics to manage?
• Tax, property and/or reputational issues?
• Does your charity have the capacity and the expertise to take on the role and to manage it internally?
• Are there ethical considerations? Did the deceased own assets that do not fit with our purpose and could cause an issue for your charity?
• On the flip side, has the deceased appointed your charity to be executors as they have been lifelong supporters? Could there be a reputational issue if you do not act?

The above elements should not discourage your charity from acting as the PR. It is beneficial to discuss the estate with your colleagues and obtain legal advice/assistance with administering the estate if you do take up the role of PR.

Benefits of acting as PR

There are several benefits to acting as PR:

• Your charity has control of the estate
• You can manage any risks or potential reputational issues
• You can ensure the estate is being administered efficiently and correctly
• You can agree and approve all costs
• You can recognise opportunities to maximise the estate income
• Acting quickly can ensure that the estate is administered as quickly as possible in a process fraught with external delays
• Acting as PR can provide reassurance to friends, family or neighbours of the deceased who were unsure who would be dealing with the estate in the absence of an appointed executor
• Acting as a PR allows you to have control on which law firm to appoint to act on your behalf. It's particularly helpful to have someone who understands and appreciates how your charity operates from a financial and operational standpoint, appreciating when your financial year ends is and when you drive for income, even down to how and if your charity accrues. Having a trusted advisor who is in embedded and appreciates these things does make a difference.

Charites should not be concerned to take up the role of PR as long as some consideration has been given to the circumstances surrounding the estate. If you have any queries regarding acting as PR or require assistance administering an estate as PR, please do not hesitate to contact our Charity Probate team.