There is a caveat in place but steps need to be taken to preserve the assets – what can we do?

If there is a caveat lodged against an estate, the executors or administrators of the estate cannot obtain the grant of probate or letters of administration. In practice this means that any attempt to begin administering the estate must come to a standstill, whilst lengthy litigation is ongoing. This can impact estate’s value, particularly where properties are involved. For instance:

• Properties might fall into disrepair.
• Sales might be lost or delayed.
• Bills may not be paid, and penalties might accrue. This might even lead to the property being forfeited,
• Mortgage arrears might lead to repossession.

What can be done?

Limited Grant – Grant ad Colligenda Bona

An application can be made for a type of limited grant, called a grant ad colligenda bona. The purpose of this grant is to allow the administrators to collect and realise assets in order to preserve the value of the estate and pay liabilities.

This grant type is of course limited to a particular purpose. It does not allow for distribution of the estate. To distribute assets, a full grant of probate will need to be obtained once the dispute is resolved. However, it will allow for monies to be gathered in and bills to be paid.

For such a grant to be issues, an application form will need to be lodged along with a statement or affidavit that sets out the case background and why the grant is needed. Whilst in some cases it is possible to proceed without payment of any IHT or the IHT205 (if the estate does not pay inheritance tax) or the IHT400 (if there is inheritance tax to be paid by the estate) forms being lodged.

If the grant ad colligenda bona has been granted, the executor or administrator must be sure not to stray from what is permitted by the grant, as they may be held personally liable for any loss to the estate as a result.

David Wedgwood and Kimberley McGhie will touch on this issue in more detail at our in-person seminar for professionals on 24th November 2022.