An important precaution before distributing an estate — and one that could save executors from personal liability.

When someone dies, their executors become responsible for dealing with the deceased’s assets, debts and liabilities before distributing the estate.

But what happens if an unknown creditor appears after the money has been distributed?

Perhaps there was an old loan nobody knew about, an outstanding business debt or a claim that had never been brought to the family’s attention.

In some circumstances, executors could find themselves personally responsible for debts they failed to discover before distributing the estate.

Fortunately, there are steps they can take to reduce this risk.

One of the most important is to place a Section 27 deceased estates notice in The Gazette, together with any appropriate local newspaper notice.

What Is a Section 27 Notice?

A Section 27 notice is a public advertisement inviting anyone with a claim against, or an interest in, a deceased person’s estate to come forward before the estate is distributed.

It takes its name from Section 27 of the Trustee Act 1925.

The purpose is to give potential creditors an opportunity to notify the executors or administrators of outstanding claims.

Once the required notice period has expired, executors who have complied with the statutory requirements can distribute the estate with protection against personal liability for certain claims of which they had no notice.

This is particularly valuable because executors cannot always know everything about the deceased’s financial affairs.

However, Section 27 notices do not automatically protect the beneficiaries who receive the estate. That is an important distinction we’ll return to.

What Is The Gazette?

The Gazette is the United Kingdom’s official public record for a wide range of legal and statutory announcements.

It comprises The London Gazette, The Edinburgh Gazette and The Belfast Gazette.

For estates administered in England and Wales, deceased estates notices are normally placed in The London Gazette.

The Gazette publishes notices relating to insolvency, companies, estates and numerous other legal matters.

A deceased estates notice is not an obituary. It is a formal notice designed to protect those administering an estate.

Why Should Executors Advertise for Creditors?

Imagine the following situation.

An executor administers an estate worth £250,000.

After paying the known debts and expenses, the executor distributes the remaining money to the beneficiaries.

Six months later, an unknown creditor produces evidence that the deceased owed £20,000.

The estate’s money has already been distributed.

If the executor failed to take appropriate precautions, they could potentially face personal liability for distributing the estate without properly dealing with its debts.

A correctly placed Section 27 notice can provide important statutory protection against claims that were unknown when the estate was distributed.

It gives the executor a defence against certain personal claims arising from that distribution.

It does not, however, make genuine debts disappear.

Where Should Section 27 Notices Be Published?

Normally, executors should consider:

1. The London Gazette

This provides the official public notice for England and Wales.

2. A relevant local newspaper

Where the estate includes land or property, Section 27 also provides for a notice in a newspaper circulating in the district where the land is situated.

That may be different from the district where the deceased lived.

3. Other publications where appropriate

If the deceased operated a business, had unusual financial arrangements or had significant interests elsewhere, further notices may be sensible.

Professional advice may be worthwhile in more complicated cases.

The Gazette offers a service for arranging associated local newspaper advertisements, although executors can compare the cost of placing them directly.

Is a Section 27 Notice Compulsory?

No. There is no general requirement for every executor to place a Section 27 notice.

However, it is a recognised precaution that can provide valuable legal protection.

Some executors dealing with very straightforward estates may decide against advertising, particularly where they know the deceased’s affairs intimately and have made appropriate enquiries.

That decision should not be taken lightly.

The cost of placing notices may be relatively modest compared with the potential cost of an unexpected liability.

Remember that a notice is only one safeguard. Executors should still investigate assets and liabilities properly.

How Long Must Executors Wait?

Section 27 requires a claims period of at least two months, calculated in accordance with the statutory notice requirements.

The Gazette’s standard deceased estates procedure allows creditors two months and one day to respond.

If notices are placed on different dates, the later notice may affect when the statutory protection becomes available.

Executors should therefore check the closing date carefully and avoid distributing the estate prematurely.

The notice period can run while other estate administration work is being carried out.

That is one good reason to arrange notices relatively early.

How to Place a Deceased Estates Notice in The Gazette

Executors can arrange the notice directly through The Gazette’s website.

The process is straightforward:

1. Obtain a death certificate, Grant of Probate or Letters of Administration.
2. Create an account with The Gazette.
3. Select the relevant Gazette edition.
4. Choose the deceased estates notice category.
5. Enter the deceased’s details and information for receiving claims.
6. Consider local newspaper publication and address privacy options.
7. Pay the publication charge and retain confirmation.

Official service: https://www.thegazette.co.uk/deceasedestatesnotice

The Gazette publishes its current charges, including optional services, on its website.

There is no need to use an intermediary simply to submit a straightforward notice.

Protect Your Home Address

This is a precaution that individual executors can easily overlook.

A Gazette notice becomes part of a permanent public record.

If you use your home address for receiving claims, that address may remain publicly accessible.

The Gazette offers a paid postal forwarding service so claims can be sent without publishing your private address.

Alternatively, a professional adviser may be able to receive correspondence on the estate’s behalf.

Consider this before submitting the notice, rather than trying to correct the published information afterwards.

Does a Section 27 Notice Protect Beneficiaries?

Not necessarily.

This is one of the most important limitations.

Section 27 provides protection to executors and trustees who distribute assets in accordance with its requirements.

It does not necessarily prevent an unknown creditor from pursuing estate property or its proceeds in the hands of beneficiaries.

For example, suppose an executor has properly advertised, waited for the claims period to expire and distributed an estate.

An unknown creditor then produces a valid claim.

The executor may be protected from personal liability for having distributed the estate, but the creditor may still have rights against assets or money received by beneficiaries.

Section 27 protection for executors is not the same as eliminating the underlying debt.

This is why some families also consider insurance.

What Is Section 27 Indemnity Insurance?

Specialist insurance may be available to address certain risks arising from unknown creditors or liabilities discovered after an estate has been distributed.

Such policies can sometimes protect both executors and beneficiaries, depending on their terms.

They may cover qualifying claims, legal expenses or losses arising from specified circumstances.

However, the protection is not automatic.

Policies vary considerably in their exclusions, limits, disclosure requirements and treatment of known or suspected debts.

Some products may be available with or without Section 27 notices, but the precise conditions must be checked.

Insurance is therefore not a substitute for carrying out appropriate searches and investigations.

Is Insurance Worth Considering?

It may be particularly relevant where:

• The estate is substantial.
• The deceased’s financial affairs are uncertain.
• Beneficiaries want protection against later claims.
• The executors are concerned about undiscovered liabilities.
• Early distribution is being considered.

The decision should be based on the actual risks, policy wording and cost.

For some estates, statutory notices and proper searches may be sufficient. Others may justify additional protection.

Should Executors Search for Unknown Assets and Liabilities?

Yes, where appropriate.

Placing a Gazette notice does not excuse executors from making reasonable enquiries.

Potential problems include forgotten bank accounts, credit agreements, personal guarantees, outstanding tax liabilities and previously unknown business commitments.

Depending on the estate, useful enquiries may include reviewing bank statements, checking correspondence, contacting known financial institutions and making specialist asset or liability searches.

Where property is involved, appropriate Land Registry searches may also be necessary.

The extent of the enquiries should reflect the estate’s circumstances.

An executor administering a small, straightforward estate may need a different approach from someone dealing with multiple properties, business interests or complicated financial arrangements.

What About Claims from Family Members?

Section 27 notices should not be confused with claims under the Inheritance (Provision for Family and Dependants) Act 1975.

Certain relatives and dependants may be entitled to apply to the court for reasonable financial provision from an estate.

Different legal rules and time limits apply to these claims.

Executors should not assume that placing a Gazette notice allows them to ignore the possibility of an inheritance dispute.

If a claim is threatened or circumstances suggest one may arise, independent legal advice is advisable before distributing the estate.

A Practical Checklist for Executors

Before distributing the estate:

• Identify and pay known debts and expenses.
• Consider whether searches for unknown assets and liabilities are necessary.
• Decide whether to place Section 27 notices.
• Arrange Gazette and appropriate newspaper publication.
• Consider using an address forwarding service.
• Record the date the claims period expires.
• Investigate any claims received.
• Consider whether additional insurance is appropriate.
• Allow for outstanding tax and other estate liabilities.
• Prepare proper estate accounts before final distribution.

A Final Word: Protect Yourself Before Distributing the Estate

Executors undertake a position of considerable responsibility.

Most are family members or friends who have never administered an estate before and may not appreciate that mistakes can sometimes leave them personally liable.

Section 27 notices are a straightforward, established way of reducing one particular risk.

They are not compulsory, they do not remove the need for proper enquiries and they do not provide complete protection against every possible claim.

Nevertheless, they are well worth considering before an estate is distributed.

My advice is simple: don’t rush to distribute an estate until you are reasonably satisfied that its debts, liabilities and potential claims have been properly addressed.

A little caution now may prevent a very expensive problem later.

Further Information

• The Gazette – Place a Deceased Estates Notice
• Trustee Act 1925, Section 27
• The Probate Department – Unknown Assets and Liabilities
• The Probate Department – Local Information and Services

This article provides general information about estate administration in England and Wales. It is not a substitute for legal advice about a particular estate.