The Gazette 1982

GAZETTE

JULY/AUGUS T

1982

Administration Record. 13. Report to client on sources and application of assets. Having analysed the various activities involved, it is suggested that by the use of a systematic method of keeping records, considerable improvements in efficiency may be achieved. Keeping of Adequate Records It is suggesed that a General Correspondence File be opened in the normal way, supplemented by a "Lodgments File" and two documents folders, entitled "Tax Documents Folder" and "Probate and Title Documents Folder". The folder entitled Lodgments File is to be open- ed when the first cash is collected to accumulate, in date sequence, the letters or dockets covering all lodgments to the solicitor's Client Bank Account and the executors' or administrators' Bank Account, the Lodgment File will avoid the confusion and extra work which arise, for example, where there is no record of several sources which make up a composite lodgment, or where a net receipt is noted but there is no record of the gross funds originally received. This in date order file obviates the need for a separate journal or cash book and enables easy reconciliation of bank statements. It may be advisable to open a separate file for material relating to continuing Estate income and the accounting for Income Tax thereon. The Tax Documents Folder will contain copies of all tax returns — in practice, mostly those re- lating to Capital Taxes handled by the solicitor including various communications from the Revenue, such as Queries, Observations, Receipts and Discharges. Its purpose is to marshal at one point all material relating to the valuation of property, the size of gifts, inheritances and other disposals, and assessments of tax, in order to help the solicitor in his negotiations with the Revenue and so that he can check with ease what receipts and discharges have been issued. The Probate and Title Documents Folder would, prior to the extraction of the Grant, hold draft probate documents and any title documents, Irish and foreign, such as Stock and Shares certificates, deposit account pass books, Insurance policies, Prize Bonds and title deeds. Foreign Probates or their equivalent normally require sealed and certified copies of an originating Irish Grant as a base for applications. Jointly owned assets, insurance policies and some pension schemes require death certificates as a proof of death. Foreign countries, such as South Africa, Australia, U.S.A. and Malaysia have their own tax clearance documents to be completed before permission to transfer can be obtained. In other cases, where the value is relatively small and the title clear, the institution holding an asset may agree to release it upon the execution of an indemnity and the furnishing of a letter of clearance from the Revenue. As soon as the title of the personal representative has been established by obtaining the Grant (or alternative title document), the Probate and Title Documents Folder should have added to it all documents that have to be exhibited and noted by registrars before the title of the personal representa-

tive can be registered, including copies of Grants, Irish and foreign; death certificates; indemnities; letters of clearance from Irish and foreign Revenue authorities; insurance policies; bank and building society pass books, withdrawal forms, and pay orders; stock and shares certificates and transfers or letters of request for registration. These are all documents that have to be "sent out" before the assets concerned can be collected. Accord- ingly it is convenient to group them together. They act as visible reminders of what is outstanding. If there is in this Folder a spare copy of the Grant and a share certificate still in the name of the deceased, these documents should be sent out without delay and not left lying in the Folder. Bills Payable Where there are liabilities to be discharged when assets are realised, it may be convenient to collect all bills in the Probate and Title Documents Folder, because these bills must also be "sent out" with cheques as soon as funds are available. Coding of Files For ease of identification of files and folders, separate colours of File covers may be used for each category, e.g. General Correspondence — buff, Lodgment file —blue, Probate and Title Documents Folder — pink, Tax Documents Folder — green. The Administration Record In addition to the separate Files and Records Folders, it is suggested that, an Administration Record be set and maintained. The Administration Record is the kernal of the operation of the system. It enables a person coming fresh to the case, or coming back to the case after an absence to see, at a glance, exactly how far the various steps have progressed. It should contain: (a) an Epitome of reference information, structured to tell in simple profile who and what is involved — particulars of all groups of assets, who is entitled to and who manages them; and the names of professional advisers, accountants and stockbrokers. (b) a Check List, that in turn enables the preparation of (c) a Chart listing the main Documents to be processed (Probates, Exchange Control Permission, etc.), and the sequence of stages by which each is to be progressed —drafted, signed, lodged, etc.; (d) the three final sections of the Administration Record are (i) the Assets Account which describes the assets and records how and when they are collected and (ii) Debt and Legacy accounts, which list debts and legacies and how they are discharged, thus enabling an ongoing Balance Sheet to be maintained. The use of the Administration Record greatly facilitates the winding up of Estates and Trusts, because so many of the activities involved are pre- dictable and "plannable". When the Schedule of Assets is prepared, a list of the persons involved (settlor, per reps, beneficiaries, creditors) and the opening Balance Sheet items and values are all avail- able. It is this stage, that the Administration Record should be first written up. Later, it will save an enormous amount of time that would otherwise be

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