The reasons why a Section 27 Trustee Act notice helps Executors by estate administration expert Robert Cartmell.
I, Robert Cartmell, having worked in ‘estate administration work for over 25 years and a common issue to arise with any Probate or Estate administration is whether to incur the cost and process of undertaking a Section 27 Trustee Act notice.
What is a ‘Section 27 Trustee Act Notice?’
The section is a element of statutory law arising under the Trustee Act 1925.
The details of the actual wording of the section are at Section 27 of the Trustee Act 1925
Section 27 permits the executors of an estate (or Administrators where there is an Intestacy) to ensure a degree of protection for themselves in progressing the administration of an estate. By placing the Notice in the correct form, the executors can be protected against liability from any later claims from creditors and/or beneficiaries of which they have not had any notice of at the time that they convey or distribute the assets in the estate.
What are the requirements in filing a correct Notice?
- There is a public advertisement confirming the executor(s) intention to transfer property or distribute capital. The advertisement is through a notice placed in The Gazette and a local newspaper.
- The notice must set out a period of at least 2 months for any interested person (such as a creditor or beneficiary) to send the particulars of their claim to the executors.
Do Executors have to commission the Notice?
No, it is not a legal requirement or obligation to do so. However, any executor or personal representative placing a notice in accordance with section 27 will not be liable to any such creditors or beneficiaries.
How does the Section 27 Notice help the Estate – and the Executors?
The Notice can help to flush out any remaining claims (whether by potential beneficiaries or creditors).
The Notice can also help Executors move forward to conclude the administration of estates where there is a feeling of uncertainty. If the Executors can distribute following the expiry of the Notice, they can then do so with more security and protection. That will help them proceed. Without the Notice, the executors might be personally liable to repay sums distributed incorrectly where a creditor or beneficiary makes a claim and the assets have been spent or dissipated by the beneficiary(ies).
What other steps should be taken?
Review the Will and family circumstances for signs of potential conflict or issue
- Is there a person or entity who might feel disgruntled at having not benefitted? If so, examine how this person has been consulted (or otherwise) in the process of estate administration. For example, if a child has been left out of the Will, or indeed a surviving spouse or former spouse who was being maintained by the deceased.
- If there is an Intestacy (no Will), has a thorough search of the family tree beneficiaries been obtained? Consider instructing a specialist tracing agent (such as Title Research) as this will help to discharge the executors’ responsibilities.
Will-Checks
Estate practitioners advising executors should ensure there is a risk assessment undertaken regarding any possible ‘later’ Will. If there is any uncertainty as to whether the Will that you are acting on is the final, valid, last Will then a will search would be recommended. That can potentially be an onerous task but there are a methods we use, being
- First, a check among the relatives/close family of the deceased and any indication of when and how any later will was made is followed up;
- A check with ‘Certainty’ (a company which organises Will registration services);
- A check with local will writers and law firms (in the vicinity of the deceased’s usual address)
- A check with the Court register of Wills (the Court do offer a service for registration but it is rarely used)
Notwithstanding the issuing of a Section 27 Notice, Executors (or personal representatives) still have the same obligations to make the same due diligence on later Wills and validity of the existing Will.
Review likely Creditors of the deceased
Carry out a risk assessment of whether there may be creditors of whom you are currently unaware. The triggers for increased risk include circumstances where the deceased:
- was in business;
- had a history of taking loans/credit cards/incurring personal debt;
- had received assets as a loan from a family trust.
As part of any estate administration, estate practitioners need to carefully check the likelihood of other ‘creditors’ bringing claims for debts due to them by the deceased.
How do I lodge a Section 27 Notice?
A Section 27 Notice is lodged through a specialist agent. The cost is usually in the region of £200 to £300. Contact us we will organise the Section 27 Notice through our specialist agents.