When someone dies, they may leave debts that their personal representative is not aware of. By advertising in the press, creditors have the chance to claim the money they are owed.

After a death, an estate is administered by a personal representative of the deceased. This is either an executor or, where there is no Will, an administrator.

This person is responsible for collecting in the deceased’s assets, valuing them, paying any outstanding debts, including inheritance tax, preparing estate accounts and distributing the estate to the beneficiaries.

If an executor or administrator fails to pay an outstanding bill, there is a risk that they could be held personally liable for the amount owed.

Section 27 of the Trustee Act 1925

Section 27 of the Trustee Act 1925 allows executors and administrators to protect themselves from this liability, provided they place an advert in The Gazette, a national newspaper containing legal notices.

If the estate contains a property, then a notice should also be placed in the local paper in the area where the property is situated.

If the deceased owned a business, it is also advisable to place a notice in publications dealing with the relevant trade or service.

The notice will give creditors two months and one day from the date of publication to notify the executor or administrator of their unpaid debt.

To place a s.27 notice in The Gazette, you will also need to provide documentation such as a copy of the death certificate and/or the grant of probate or letters of administration.

Dealing with a debt

It is usual to delay distributing the estate until after the notice period, to ensure any debts can be paid.

If a debt comes to light after an estate is distributed, then provided the s.27 notice was adequately published and the executor or administrator was unaware of the debt when the estate was distributed, they should be able to avoid personal liability.

This does not mean that the debt is not payable, but the creditor will make their claim against the estate’s beneficiaries rather than the personal representative.

Similarly, the s.27 notice does not prevent claims being made against the estate by family and dependants of the deceased under the Inheritance (Provision for Family and Dependants) Act 1975.

If you are thinking of making a Will or you need help administering an estate, speak to one of our expert lawyers on 01634 353 658 or email us at rob@pembrokewillwriters.com.