Insolvent deceased’s estate

If an estate is insolvent there are implications for executors and those administering that estate as those individuals must have regard to the creditors and how any funds which are available are utilised. Mistakes by executors/administrators can be costly in some circumstances and those individuals can be held personally liable. Any debts of the deceased fall to be paid before payments and distributions are made to any beneficiaries.

Where an insolvency practitioner is appointed as trustee in bankruptcy of a deceased estate he/she will look at all money paid from the estate and the reasons for that. Any order made under the Administration of Insolvent Estates Deceased Persons Order 1896 (effectively a bankruptcy order post death) will take precedence over a will or letters of administration.

The implications of a deceased estate are particularly important where land and property are involved. How these are treated and the implications for property passing by survivorship to co owners can be complex and warrants further advice as the registered title needs diligent consideration to advise the surviving owner of their position and whether they are exposed to any claims by a trustee in bankruptcy.

It is far better for you, and those you leave behind, for you to understand your position now and plan for the future in terms of your assets/liabilities. Forward planning is far better for all concerned.

If you have been named as an Executor in the will of someone with debts or you have personal or business debts and are concerned about what will happen to them on your death, we can provide advice and assistance.