Debts and Expenses

    Identifying and verifying debts of an estate and claims is just as important as for assets.

    First, if an estate is insolvent you may not be able to administer it yourself.

    Secondly, it is only when you know the extent of the liabilities of the estate will you be able to give beneficiaries an indication of the worth of their share – and that is what they are anxious to know.

    Executors will normally be advised as a matter of prudence to advertise for creditors. If the estate is complex or the executors have little personal knowledge of the financial affairs of the deceased, we advise it will always be necessary to advertise for creditors.

    A mortgage on property is a debt that will need to be taken into account and then paid from the estate unless there is an insurance policy that pays it off.


    It is quite rare for an estate to be wholly insolvent but if it is then the provisions of any Will relating to the beneficiaries do not apply. The estate should be administered under the provisions of the Administration of Insolvent Estates of Deceased Persons Order 1986 and Section 421 Insolvency Act 1986.

    In all cases funeral and administration expenses are paid before any other debts. The balance of the assets must then be distributed in accordance with the law of bankruptcy.

    While an insolvent estate may be administered informally along bankruptcy lines by the Legal Personal Representatives without a formal insolvency administration order, you will probably need professional help which we can give.