Q&As

Can monies paid out to a beneficiary under an estate be recovered in the event that the estate is successfully sued several years after its distribution?

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Produced in partnership with Lynne Counsell of 9 Stone Buildings
Published on LexisPSL on 04/06/2018

The following Wills & Probate Q&A produced in partnership with Lynne Counsell of 9 Stone Buildings provides comprehensive and up to date legal information covering:

  • Can monies paid out to a beneficiary under an estate be recovered in the event that the estate is successfully sued several years after its distribution?
  • The position of the personal representatives
  • Exclusion or limitation of liability
  • The position of the beneficiaries

Can monies paid out to a beneficiary under an estate be recovered in the event that the estate is successfully sued several years after its distribution?

The position of the personal representatives

A personal representative is under a duty to pay the debts of the deceased in accordance with the statutory order set out in section 34(3) and Schedule 1, Part II to the Administration of Estates Act 1925. In Re Tankard at para [72], it was stated that:

‘… it is the duty of executors, as a matter of due administration of the estate, to pay the debts of their testator with due diligence having regard to the assets in their hands which are properly applicable for that purpose, and in determining whether due diligence has been shown regard must be had to all the circumstances of the case…’

Creditors take priority over beneficiaries. The debts of the deceased must be discharged before any payment is made to the beneficiaries. For these purposes, debts include future and contingent liabilities. A personal representative may become personally liable for liabilities and debts that arise after distribution of the estate even if they did not know about them and had distributed in good faith (Re Yorke at para [921] (a case of future Lloyd’s losses that might arise)).

Exclusion or limitation of liability

There are five ways in which the personal representative

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