The estate of a deceased is insolvent where the assets available will not meet its liabilities. Where liabilities were jointly owed with a partner or relative, the liability may have to be paid by the survivor but, in that instance, they will have a claim in the estate as well.
Personal representatives will need to tread carefully where there is a suspicion of insolvency, as the interests of creditors must be placed before the interests of beneficiaries. Legislation provides for the administration of an insolvent estate (Administration of Insolvent Estates of Deceased Persons Order 1986 and The Insolvency Act 1986) and there is a statutory order for the payment of secured liabilities, expenses and other claims that the personal representatives must not ignore, at the risk of personal liability.
We have a specialist team of private client and insolvency lawyers ready to advise personal representatives suspecting insolvency of the estate in their care.
- Restructuring & Insolvency - Overview
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- R3: Association of Business Recovery Professionals
- INSOL Europe