A deceased estate is insolvent when the deceased persons liabilities exceed the value of their assets. This leads to creditors being owed money by the estate, which must be repaid as far as funds allow.
A hierarchy of payment exists for deceased insolvent estates. The executor, or personal representative, is responsible for ensuring debts are paid in accordance with insolvency laws.
This is a serious responsibility with regards to any deceased estate but, when the estate is insolvent, the personal representative can become personally liable if they distribute payments incorrectly.
Insolvency Administration Order
When a person dies and their debts are higher than the value of their assets, the debts must be repaid where possible. They ar…
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