The Gazette 1982

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GAZETTE JULY/AUGUST 1982
Expediting the Administration
of Estates
An edited version of a paper by Peter H. Quinlan M.B.A., Solicitor.
SOLICITORS have a growing concern about the
increasing complexity of administering estates,
the high labour input required and the impact of
inflation on the cost of doing the work. Clients are
often disappointed by the length of time sometimes
taken to complete an administration and exasperated
by the real or apparent inactivity of those who are
doing the job, as well by a lack of communication.
There are times when the client's views are
justified and an analysis of the way in which many
administrations are conducted yields evidence of the
following problems:—
1. Acceptance of work by solicitors without their
considering whether it can be carried out by them at
levels of reasonable competence and cost, and their
ignoring factors that may create undue complexity or
volume of work.
2. Administering estates on the basis of single
general correspondence files which are allowed to
accumulate unstructured, apart from date sequence,
and which often become hopelessly unwieldy. Those
involved hope that this file, if analysed with sufficient
perseverance, will in some way produce the variety ot
specific information required for the range ot
financial analyses and reports such as cash budgets,
tax returns, administration accounts, etc. which will
be needed during the administration.
3. Failure to appreciate that administration is no
longer primarily a distribution and accounting
exercise, centered on computation of the residue, and
which a competent book-keeper could handle. Now
the additional taxes to be accounted for not merely
add an extra limb to the work of administration but
greatly complicate the distribution accounting itselt
and increase the need for collecting and arranging
information systematically.
4. The absence of any overall plan or strategy for the
conduct of a particular case. There should always be
an overall plan or strategy to take account of the three
main aspects of any estate, namely (i) the
entitlements and needs of beneficiaries, (11) the type
and quantity of assets and liabilities (111) capital tax
burdens (if any) so that optimal decisions can be
taken for beneficiaries. Such a plan should be
formulated as early as possible, because it will involve
specifying the main steps to be taken in handling
assets, the main financial reports and tax returns that
will be required and, accordingly, the structure of
information and records.
5. Failure to break down the work into different
types of activity, thus limiting the extent to which
activities can be delegated.
It is easy to say that the overall objective in the
administration of estates should be to distribute as
much as possible as quickly as possible, to
beneficiaries and to obtain an acceptable level of
profit for the solicitor. However, the statement of
overall objectives in such terms does not give much
help in any particular case: becuase the intervening
work activities between the start and finish of a case
have not been identified; because such overall
objectives are not sufficiently specific to provide
guide lines for the intervening work activities —
professional, clerical and accounting, that are
involved. In order to be helpful they must be restated
in terms of the work steps that comprise an
administration. Examples of intervening objectives
might be: specify what steps are necessary for each
case; decide best methods for collecting information
efficiently; structure all records to facilitate
management of activities and preparation of financial
reports.
Adopting a Systematic Approach
It is suggested that a simple and effective system
for the administration of estates can be put into
operation without difficulty.
The following activities are identifiable as the
essential core of administration work.
1. Take instructions.
2. Decide overall strategy.
3. Collect detailed information to ascertaining (a)
the title of the persons involved (e.g. Personal Rep.,
Beneficiary, Creditors) and (b) the amounts and
values of assets, debts and legacies.
4. Summarise and arrange this information in (i)
the Schedule of Assets (ii) the Administration
Record.
5. Prepare tax returns.
6. Obtain Grant of Probate or Administration (or
alternative title document e.g. death certificate, or
specially negotiated title, where the holder of the
asset waives requirement to furnish Grant).
7. Exhibit the Grant (or alternative title docu-
ment).
8. Collect assets; record cash in Lodgments File.
9. Review correspondence files. Write up
Administration Record.
10. Preparation of cash budget and computation of
residue.
11. Discharge of debts, legacies and residue.
12. Review correspondence files and write up
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