Executors have many responsibilities – one being to notify potential creditors and beneficiaries of the death. This can be done by placing statutory advertisements.
What are statutory advertisements?
Sometimes executors fall into the trap of becoming personally liable for debts from creditors or beneficiaries after the estate has been distributed. Personal representatives, executors and trustees are recommended to place statutory advertisements in the London Gazette newspaper for a minimum period of two months. Placing statutory advertisements is not a legal requirement but it gives potential creditors or beneficiaries an opportunity to make their claim against the estate and enables executors to avoid liability if any creditors or beneficiaries claim they were not notified of the death.
If the deceased owned property, you should also place a statutory advertisement in the local paper where the property is located.
Distributions of funds or appropriation of assets should not be made from the estate in the advertisement period. Once the minimum period of advertisements is reached, the executors can proceed in distributing the estate with peace of mind that they will not be held personally liable for any claims and debts that then may arise. However it is important to note that these statutory advertisements do not affect certain people’s rights to make a claim under the Inheritance (Provision for Family and Dependants) Act 1975.
Who becomes liable for the debts?
If advertisements have been placed, executors are protected from personal liability for debts, however the creditor might still be able to claim amounts due from beneficiaries who received money from the estate, instead. So note that if you are an executor and also a sole beneficiary of an estate, you would not be fully protected through the statutory advertisements
Executors also would not be protected from any claims or debts they were aware of at the time of the distribution. The statutory advertisements only provide protection from unknown creditors and unknown Beneficiaries.
How do you place statutory advertisements and who pays the cost?
Most statutory advertisements are done by professional executors, although an executor who is not a professional can place advertisements. Guidance on how to place a statutory advertisement can be found from The Gazette which is accessible online.
The cost of the statutory advertisements would suffice as an administration expense and therefore the cost could be settled using funds from the estate.
How Moore Barlow can help
Our specialist probate lawyers provide expert legal advice and support for individuals and families dealing with the administration of estates, wills, and trusts. If you wish to discuss probate please contact a member of our Private wealth team.