Think you’re covered with a statutory notice? Watch out for a DWP claim

Emily Deane TEPIf you work in the probate field you will be very familiar with the process of submitting a statutory advertisement, (under the Trustee Act 1925 for England, or the Trustee Act 1958 in Northern Ireland) in The Gazette and a local newspaper, following the receipt of the grant of representation.

A statutory notice is a published advertisement giving notice of the personal representatives’ intention to distribute the deceased’s estate. The objective is to ensure that sufficient effort has been made to locate creditors, prior to distributing the estate to the beneficiaries, whilst safeguarding the executor or trustee from becoming personally liable from any unidentified creditors. If a notice is not submitted and a creditor subsequently makes a claim after the estate has been distributed, then the executor or trustee may become personally liable for any unidentified debts.

The notice gives creditors and anyone else who may have an ‘interest’ in the estate up to two months to make a claim via the personal representatives, although they do not affect the right of certain people to bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975.

Once the notices have expired the personal representatives may then distribute the estate, knowing that they will not be personally liable should claims or debts of the deceased become payable. Therefore, it is prudent and good practice that no significant distributions should be made from the estate before the statutory notices have expired.

An exception for the DWP

However, not all advisors are aware that if you have already paid the beneficiaries their entitlements from the estate, and you subsequently receive a letter from the UK Department for Work & Pensions (DWP) about a claim, then you are not protected by the statutory notice.

In these circumstances you will need to contact the beneficiaries to explain that some money may need to be reimbursed to the DWP, and that they should return the money they have been given, pending the outcome of the enquiry. Clearly this scenario causes dissatisfaction for the beneficiaries, as well as delay and potential costs to the advisor.

Terry Moore TEP of Burstalls in Hull initially brought this to STEP’s attention. STEP’s UK Practice Committee has subsequently raised the lack of awareness around this issue and written to the DWP pointing out the difficulties it presents, and the length of time it often takes to receive a repayment request. STEP will report back in due course.

Emily Deane TEP is STEP Technical Counsel

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s