Topic 5: Duties and Liabilities of PR Professional Practice II | ALICIA LEE

Duties of PR
General Duty
 Lee Yoke San: PR owes a fiduciary duty to the beneficiaries.
 PR has a fiduciary duty whereby he must:
(i) act diligently (due and proper care) and reasonably in administrating and distributing assets;
(ii) remain honest, impartial, objective; and
(iii) act in the best interests of the estate at all times.
 Test:
(i) As expeditious in administering the estate as he would be in attending to his own business affairs.
(ii) A reasonable man would be applied in determining the efficiency or competency with which the PR has handled the
estate

Specific Duty
(1) Call in assets
 PR has to determine the extent of the assets (real and personal) and liabilities of the deceased, and then act diligently and
reasonably in realising the assets.
 GR: Call in all assets within 1 year from the date of death
 To perform this duty, PR will exercise his authority: sue/recover debt, dispose property, enter into/rescind contract

(2) Pay debts and liabilities

 S. 67(1)(a): The property of a deceased person and the property of which a deceased person in pursuance of any general
power disposes by his will, are assets for payment of his debts and liabilities, and any disposition by will inconsistent with
PAA is void as against the creditors; and the Court shall, if necessary, administer the property for the purpose of the
payment of debts and liabilities.
 S. 68(2): The payment of debt shall be made out of the net money arising from the sale and conversion of the properties and
out of the ready money of the deceased. The payment shall also include all funereal and testamentary and administration
expenses.
 Debts are normally paid after the PR has called in all the assets.
 S. 32(1) Trustee Act: If the estate is large, it would be prudent for the PR to invite creditors through advertisement to
submit their respective claims against the estate.
*Note: PR protected himself by such advertisement. At the expiration of the notice, PR may distribute the property
accordingly.
Re Tankard
-PR has duty to pay and satisfy all debts of the testator with due diligence within 1 year of the execution year otherwise
distribution of interests towards beneficiaries cannot be achieved.
Sharp v Lush
-Testamentary and administration expenses include:
(i) Costs of obtaining a grant of representation;
(ii) Legal costs in commencing suit to obtain assistance of the court;
(iii) Costs of taking the advice from solicitor outside the administration suit as to the distribution of the estate;
(iv) Cost incurred in the collection, maintenance or disposal of the deceased’s assets
(v) Payment of other liabilities arising since the date of death, such as rent
Saraspathy v Kanagasundram
-PR will be personally liable if the cost of the estate is increased without cause (e.g. interest accruing when there were ample
funds from which the debt could be discharged)

(3) Distribute residue

 After payment of debts and liabilities, PR shall distribute the remaining assets.
 The PR has power to postpone distribution; to appoint trustees to a minor’s property; to assent and to appropriate the
property.
*Note: PR should protect himself by making advertisement to give notice on the distribution. Any person interested shall
send particulars of his claim on the assets not less than 2 months. At the expiration of the notice, PR may distribute the property
accordingly.

(4) Keep proper accounts of the administration

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Topic 5: Duties and Liabilities of PR Professional Practice II | ALICIA LEE
 S. 62: PR shall, when lawfully required so to do, exhibit, by affidavit filed in the Court, a true and perfect inventory and
account of the movable and immovable property of the deceased, and the Court shall have power to require PR to bring in
inventories.
Thompson v Dunn
-Accounts would be required to show the monies and assets received by the PR and how he had dealt with these monies and
assets.
Discharge as PR
 PR would conclude the administration by rendering proper accounts; and obtaining from all beneficiaries’
acknowledgment that they have received their respective shares.
 S. 86(1): Upon the conclusion of the administration of the estate of a person dying testate or intestate, undistributed funds
may be passed to the Corporation.
 S. 86(2): The receipt of the Corporation may be accepted by the PR and shall constitute a full and sufficient discharge in
respect of those funds.

Liability of PR
 S. 64(1): Every person making or permitting to be made any payment or disposition in good faith under probate or letters of
administration shall be indemnified and protected in so doing.