The legal priority order for paying estate debts in England and Wales. Secured debts, funeral expenses, unsecured debts, and how to protect yourself as executor.
This guide is part of ProbateHelp's Probate Process guide cluster.
Frequently asked questions
Am I personally liable for the deceased's debts as executor?
A personal representative — executor or administrator — is not personally liable for the deceased's debts simply by taking on the role. Personal liability can arise through a breach of duty, including distributing too soon and leaving the estate unable to meet a valid claim. Before distributing, establish the estate's liabilities, settle or provide for known claims, and consider Trustee Act notices for unknown claims. A notice does not protect against a claim you already know about.
What if the estate cannot pay all its debts?
Stop before you pay anyone. An insolvent estate is not administered by this page's sequence: a statutory priority framework applies, creditors paid out of order can pursue you personally, and beneficiaries receive nothing until creditors are paid. The insolvent estates guide sets out the framework and when specialist advice is needed — take that advice before distributing anything.
What is a statutory advertisement and do I need one?
A Trustee Act 1925 section 27 notice is not compulsory for every estate, but it may protect a personal representative against unknown claims. It is placed in The Gazette and, where the estate includes land, in a newspaper circulating in the district where the land is situated. The notice must allow at least two months for claims. After the period fixed in the notice, it can protect a personal representative who distributes against personal liability for a claim they had no notice of. It does not protect against known claims or prevent a creditor following property into a beneficiary's hands.
What happens to a mortgage when someone dies?
A mortgage is secured on the property, so the lender's rights and repayment normally need to be dealt with before the property can be transferred free of the charge. A sale usually repays the secured balance from completion proceeds. A beneficiary can take on borrowing only if the lender agrees, or the estate may use another available repayment route. Any insurance payment depends on the policy terms. A surviving joint borrower remains liable under the mortgage contract in their own right.
Can I pay funeral expenses before other debts?
Reasonable funeral expenses are paid from estate property before the deceased's general debts. Before making a substantial payment, check that the estate can meet its expenses and liabilities; if insolvency is possible, take advice first. A bank may pay a funeral director directly before the grant under its own bereavement process. What is reasonable depends on the estate and circumstances, and excessive costs may be challenged.
What if a creditor contacts me after I have distributed the estate?
If you gave the required notices and waited until the period fixed in them ended, you may be protected personally against a claim of which you had no notice when you distributed. Without that protection, liability depends on the claim, what you knew and how you administered the estate. A valid creditor may still follow distributed property into a beneficiary's hands, though not a purchaser's, so take advice promptly rather than assuming the notice ended the claim.