Legal News | 18.03.21
Bills, bills, bills
Taking on the role of executor brings with it a number of responsibilities and duties. Amongst them is the duty to settle the deceased’s debts. If you don’t fulfil this role correctly, you could unfortunately end up being personally liable for those debts.
One way to limit your exposure is by placing notices in a newspaper local to where the deceased lived and owned property as well as in the London Gazette. These notices must comply with the requirements of section 27 of the Trustee Act 1925 but, once placed, they give any unknown creditors of the estate the opportunity to come forward and make themselves known, so that any debts can be settled as appropriate.
The vast majority of the estates that we deal with are solvent, meaning that there are sufficient assets within the estate to settle the deceased’s debts. Even so, there is still a strict order of priority for the repayment of debts as set out in the Administration of Estates Act 1925.
Infrequently, we encounter estates where, unfortunately, the deceased’s debts exceeded their assets, meaning that not all of the debts can be repaid. In this situation, there is again a statutory order for the repayment of debts; this time, as set out in the Insolvency Act 1986.
Care must be taken when administering an insolvent estate because creditors to whom money is owed may hold the personal representatives personally liable if the correct order of repayment is not followed.
At Wansbroughs, we recommend that if you are dealing with an estate and have any concerns at all regarding the settlement of debts, you should seek our advice. Please get in touch with your usual contact or email us at firstname.lastname@example.org.