Insolvent Deceased Estates

People’s lives have become more complex and so have their financial affairs. The number of insolvent estates has also increased over the last few years because of these complexities. Therefore, it is important to spot an insolvent estate asap. If the executor or administrator dealing the with estate doesn’t they could end up personally liable for their actions.

An insolvent estate is where the assets of the estate are not sufficient to cover the money owed to creditors. Some of the debt may be covered by an insurance policy, for example, a life policy tied to a mortgage. Others may be joint debts, such as a joint credit card.

In effect the rules of bankruptcy apply to an insolvent deceased estate with some exceptions, for example, reasonable funeral costs and testamentary expense are paid before preferential and unsecured creditors but after secured creditors.

Clearly, this is a very complex area in what will already be a very difficult time and therefore expert advice is required. Our insolvency practitioner not only has many years of dealing with this area but has also recently passed the SWAT certificate in Probate and Estate Administration so understand both areas in detail.