Executor Liability: How to Protect Yourself

Executors must administer the estate for the people entitled to it, keep proper records and deal with debts and tax before distribution. Personal exposure depends on the duty or obligation involved, what the executor knew and did, and whether the loss was caused by their conduct.

What is executor liability?

When you act as an executor, you take on a legal duty to administer the estate correctly. This means identifying all assets and debts, paying creditors in the right order, accounting to HMRC for any taxes owed, and distributing what remains to the beneficiaries.

If a breach of duty, misdistribution or personal contractual obligation causes a shortfall, you may be held personally liable. The precise remedy and amount depend on the legal basis, the loss and any statutory, court-ordered or policy protection.

Claims can arise after distribution, so keep the estate accounts, searches, tax records, notices, advice and payment evidence for an appropriate period.

When you become personally liable

Personal liability can arise in several situations. The result depends on the legal duty or obligation, the facts and the loss caused.

Mistakes that can create executor liability

These mistakes can create loss, delay or a personal claim against an executor:

Distributing too quickly. If an executor distributes without dealing with known liabilities or retaining enough for unresolved items, a later shortfall can expose them personally. A Section 27 notice has a limited role for claims of which the executor had no notice; it does not cure a known claim or every defective distribution.

Assuming there are no further liabilities or claims. Outstanding tax, council tax, credit, loans or care charges may remain even when nobody has contacted the executor. A potential application under the Inheritance (Provision for Family and Dependants) Act 1975 is a separate distribution risk and needs its own assessment.

Missing an IHT deadline. Current HMRC public guidance says a required IHT400 should be sent before the probate application and within 12 months of the death. Inheritance Tax is normally due by the end of the sixth month after the month of death, so interest can start before the filing deadline. Use the current form notes for the estate's exact dates.

Not keeping records. Missing records make it harder to explain or evidence the administration. Keep proportionate records of decisions, payments, valuations, searches, tax, advice and relevant communications.

Your protection checklist

These are risk checks to consider before final distribution. The right combination depends on the estate; no checklist creates complete immunity from later claims.

The Section 27 notice

Under Section 27 of the Trustee Act 1925, an executor can advertise for creditors and claimants by placing a notice in The Gazette and, where appropriate, a local newspaper. The Gazette says Section 27 sets a minimum two-month period from publication for creditors to contact executors. After that period, the notice can protect the executor from personal liability for unidentified creditors who did not come forward.

A compliant notice can be an important protection against claims of which the personal representatives had no notice when they distributed. It does not deal with known claims, remove other required searches or extinguish the claimant's underlying rights.

Insolvent estates: higher risk

An estate is insolvent when its assets are insufficient to meet its funeral, testamentary and administration expenses, debts and other liabilities in full.

In an insolvent estate, creditors must be paid in a strict statutory order, and paying the wrong creditor first — even inadvertently — can make you personally liable to higher-priority creditors for the amount they should have received. That order is not one universal list: it depends on how the insolvency is being handled, including where an insolvency administration order is made under the Administration of Insolvent Estates of Deceased Persons Order 1986. Our insolvent estates guide sets out the priority framework and what changes when liabilities may exceed assets.

If the estate may be insolvent, pause payments and distributions and take specialist legal advice. The applicable route and order must be established before paying competing claims.

Missing beneficiaries and Benjamin orders

A different kind of problem arises when a beneficiary cannot be found. If you distribute the estate without accounting for a missing beneficiary's share, and they later appear, you can be personally liable for their share.

The practical options are:

Retain the share. Holding the missing beneficiary's share while proportionate searches continue may be suitable, but the duration, investment and administration duties need advice.

Missing beneficiary insurance. Specialist cover may be available, subject to underwriting, searches, limits, exclusions and policy conditions. Confirm exactly whose liability and which loss the policy covers before distributing.

Benjamin order. After appropriate searches, a personal representative may ask the court for directions permitting distribution on a stated factual assumption, traditionally called a Benjamin order after Re Benjamin. Protection depends on the disclosure made and the terms of the order; the missing person's rights against recipients may remain.

A court application involves cost and discretion. Take advice on proportionality and alternatives before applying or distributing.

Executor liability insurance

Executor liability or indemnity insurance is specialist cover whose scope varies by policy. Availability, premium, insured parties, limits, exclusions, required searches and the effect of known circumstances must be checked before relying on it.

Depending on its wording, a policy may address one or more defined risks such as:

• Claims from unknown creditors who did not respond to the Section 27 notice
• Claims under the Inheritance (Provision for Family and Dependants) Act 1975
• Claims from missing beneficiaries who later appear
• HMRC investigations or assessments arising after distribution
• Legal costs of defending a claim

The list is not a statement that one policy covers every item. Disclose known circumstances accurately and obtain advice on whether a policy responds to the particular residual risk. Insurance does not replace proper administration or compliance with known claims and court orders.

Renouncing the role: your right to decline

If you have been named as an executor but do not want to take on the role — perhaps because the estate is complex, you are not on good terms with the beneficiaries, or you simply do not have the time — you have the right to renounce the executorship.

Renunciation must be done before you have intermeddled in the estate. GOV.UK's PA15 form asks you to declare that you have not intermeddled and will not do so. If you have already started acting as executor, take legal advice before signing any renunciation form.

To renounce, you use Form PA15. GOV.UK says to hand sign and date it, ask your witness to hand sign and date it, and give the completed form to the executor who is applying for probate.

Common questions

Read this guide alongside our pages on deceased person's debts, paying estate debts in the correct order, insolvent estates, and preparing estate accounts. Together, they cover the main records and decisions that protect an executor before money is distributed.