Insolvency Of Beneficiaries
An executor has a legal duty to ensure that an individual’s inheritance is paid to the right person. When administering an estate, it is vital to check the status of a beneficiary by completing a bankruptcy search.
An executor has a legal duty to ensure that an individual’s inheritance is paid to the right person. When administering an estate, it is vital to check the status of a beneficiary by completing a bankruptcy search. This will avoid personal liability, against the executors, when paying estate monies.
The term insolvent does not mean a person is bankrupt. Insolvency is when an individual is unable to pay their debts due. On the other hand, an individual is bankrupt when they are unable to pay their debts entirely. It is a legal process in which a court will relieve you from some or all your debts.
What is a beneficiary and what is their duty?
A beneficiary is entitled to receive monies from the deceased’s estate because they were either mentioned in the will or are entitled through legislation. They have a duty to declare their inheritance to any potential creditors where, for example, they are insolvent, otherwise they could be charged with an offence.
What happens when the money is due to be paid?
When a beneficiary is insolvent or bankrupt, part if not all of their inheritance must be paid out to any creditor or trustee in bankruptcy before they receive their share.
Dealing with an estate can be difficult at the best of times, let alone having to deal with creditors.
Instructing a solicitor can assist with the administering of the estate and ensure the correct parties receive the sums due to them.
Here to help you
Please contact Kew Law if you wish to take legal guidance on using an inheritance to pay off debts and where you stand legally with the process.
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