Are you a personal representative administering an insolvent estate?
An insolvent estate is one where the liabilities exceed the assets in the estate. Executors or personal representatives generally face difficulty when administering an estate which may be insolvent. There is a risk of personal liability if you fail to comply with the requirements of the Administration of Insolvent Estates of Deceased Person Order 1986.
The Law Society have recently published a practice note for solicitors acting as executors or advising personal representatives on the administration of insolvent estates. The practice note provides a guiding checklist for personal representatives and puts emphasis on the danger in a person representatives becoming subject to personal liability if the estates liabilities are not paid off in the correct order.
The note also includes background information about the different routes for administering an insolvent estate. It also pays head to the fact that it may not be known that the estate is insolvent when a grant of probate is issued.
Top tip: If you feel the estate may you are a personal representative for may be insolvent seek legal guidance to avoid personal liability on payment to creditors.
For advice on the administration of an estate or on wills generally, please contact Nicole Gallop Mildon Head of Private Client and Cross-border Property.