Hidden in a newspaper’s ‘Legal Notices’ you may have seen advertisements which are headed with the name of a deceased person together with the line: ‘Pursuant to Section 27, Trustee Act 1925 (as amended)’. This is followed by a request for creditors to contact the Executors or their solicitors. Barry Sayers explains the purpose of these advertisements.
Before distributing the estate to the beneficiaries, Executors must find out about, and then pay any sums owed by the deceased person – but how are they to know what those debts are? Suppose that the final payments to the beneficiaries have all been made and then a new debt comes to light. The Executors have distributed the whole estate. If the beneficiaries are unwilling to pay the debt between them, the Executors will have to pay it themselves.
To help find out about any unknown debts, Executors will often place these ‘Section 27 Trustee Act’ advertisements in newspapers. Where the deceased person’s paperwork is up to date, there are rarely any responses to these advertisements, and the Executors can feel more comfortable about going ahead and distributing the estate to the beneficiaries.
Even if claims have been advertised for, and no responses received, a debt can still come to light later in the day, and that is the second reason why you may see these advertisements. The Trustee Act 1925 gives special protection to Executors who have placed these formal advertisements. If Executors publish these advertisements in the London Gazette (which describes itself as ‘the official newspaper of record for the United Kingdom’) and in local newspapers circulating in areas where the deceased owned property then, once a two month period has expired, they are entitled to distribute the estate ‘having regard only to the claims, whether formal or not, of which [they have] had notice’. In this scenario, the Executors have no responsibility for paying the bills of any creditors who did not come forward in the period stipulated, although the beneficiaries of the estate cannot absolve themselves from responsibility in this way.
So publication of these advertisements is a small but important part of a well-ordered estate administration procedure to protect the Executors in a case where they are not also the main beneficiaries of the estate.
This might be:
- where you are acting as an Executor for an old friend;
- where the main beneficiaries are minor children; or
- where some, but not all, of the adult children who are the main beneficiaries of
- the Will have been appointed as Executors