Executor Personal Liability — When You’re On the Hook

Executor personal liability is a risk that many people who are named as executors under a will do not fully appreciate until they have begun administering an estate. An executor is not simply an administrator who passes money and assets from one set of hands to another. They are a fiduciary, personally responsible under English law for ensuring that the estate’s debts are paid before any distribution is made to beneficiaries, that inheritance tax is properly calculated and paid, and that the estate is administered in accordance with the will and the law. When things go wrong — when an executor distributes assets before clearing debts, overlooks a creditor, or makes an error in the IHT calculation — they can be personally liable to make good the loss from their own pocket.

The legal doctrine of devastavit — wasting the assets of the estate through misapplication — has existed for centuries and remains fully applicable today. Personal representatives who pay beneficiaries before clearing creditors, who make distributions while ignoring known or foreseeable claims against the estate, or who fail to meet tax obligations face the prospect of being sued by the parties who have suffered loss. The executor’s personal assets are at risk: their home, their savings, their own estate. This is not a theoretical concern — it is a live risk in every complex estate, and executors who take on the role without professional guidance take on that risk uninformed.

This guide explains the key heads of executor liability, the specific risks around inheritance tax, creditor claims, and distributions, and the practical steps executors should take to protect themselves. For the complete picture of what an executor must do, see our executor duties guide and our overview of probate costs.

The Core Duty: Paying Debts Before Beneficiaries

The fundamental rule of estate administration is that debts rank ahead of legacies and shares of residue. An executor who distributes assets to beneficiaries without first satisfying the estate’s debts commits a devastavit and can be required by the court to replace the distributed assets from their own funds. The order of priority for paying debts in an insolvent estate is fixed by the Administration of Insolvent Estates of Deceased Persons Order 1986, and even in a solvent estate the executor must take care to identify all outstanding liabilities — including deferred or contingent debts — before proceeding to distribution.

Common debts that executors overlook or underestimate include: income tax and capital gains tax liabilities for the tax year of death (and for prior years if the deceased failed to file returns); outstanding HMRC compliance checks; disputed invoices from tradespeople or service providers; and funeral expenses that exceeded the initial estimate. An executor who distributes without settling these debts, even in good faith, is not protected from liability unless they took reasonable steps to identify creditors — which requires, at minimum, placing statutory advertisements under s.27 Trustee Act 1925.

Devastavit: The Executor’s Liability for Misapplication

Devastavit is the ancient common law action against a personal representative for wasting or misapplying the assets of the estate. The action lies at the suit of creditors who remain unpaid, of legatees who have received less than their entitlement, and of residuary beneficiaries who have suffered loss. The remedy is restoration: the executor must repay to the estate the full amount of the loss caused by the misapplication, regardless of whether they acted dishonestly or merely carelessly.

Specific acts that constitute devastavit include: making an improper investment of estate funds; failing to collect in assets promptly; allowing a limitation period on an estate asset to expire; selling estate assets at an undervalue; paying themselves excessive remuneration; and distributing estate assets to the wrong beneficiary. The standard of care required of a lay executor is that of a prudent person managing their own affairs; a professional executor (such as a solicitor or trust company) is held to a higher standard. For context on how this interacts with the probate timeline, see our probate process guide.

Inheritance Tax Liability After Distribution

An executor who distributes the estate before obtaining written clearance from HMRC risks personal liability for any subsequently discovered inheritance tax. Under s.204 IHTA 1984, the personal representative is personally liable for the tax attributable to property that was in their possession or under their control as personal representative. If the estate has been distributed before the IHT position is fully settled and HMRC subsequently raises an assessment — for example, following a revision to a property valuation by the District Valuer — the executor may not be able to recover the funds from beneficiaries who have already received and spent their shares.

The solution is straightforward: do not distribute the residue of the estate until HMRC has issued a clearance letter confirming that the estate’s inheritance tax position has been finalised. For intermediate distributions — paying specific legacies before the residue is settled — executors should retain sufficient funds to meet any outstanding tax liability and should document their reasoning carefully. Professional indemnity insurance may also provide some protection for professional executors, but lay executors acting without solicitors carry the full personal risk.

Creditor Claims and the Section 27 Advertisement

One of the most important protective steps an executor can take is placing a statutory advertisement for creditors under s.27 Trustee Act 1925. GOV.UK sets out an overview of the executor’s duties and responsibilities including the obligation to settle debts before distributing to beneficiaries. This involves publishing a notice in the London Gazette and in a newspaper local to the deceased’s last address, inviting any person with a claim against the estate to submit that claim within a specified period (at least two months from the date of the advertisement). If no claim is received within that period and the executor distributes in reliance on the advertisement, they are protected from personal liability to unknown creditors who come forward later.

The s.27 advertisement does not protect against known creditors — an executor who knows of a debt and pays it must pay it in full regardless of the advertisement. And it does not protect against beneficiaries whose entitlement under the will or intestacy was overlooked. But it is a straightforward and relatively inexpensive step that significantly reduces the executor’s exposure to unexpected claims from unknown creditors, particularly in estates where the deceased had complex financial dealings or was in business. For the full picture of executor obligations, see our executor duties guide.

When Professional Advice Is Essential

Executors are not required to take professional advice in every case. For a simple estate — a surviving spouse, a small number of assets, no inheritance tax, no contested claims — a careful lay executor can administer the estate without instructing a solicitor. But several categories of case require professional involvement to protect the executor from personal liability: estates with a potential or actual IHT liability; estates where there may be creditors who are not immediately identifiable; estates involving a contested will or an Inheritance Act claim; estates with foreign assets or complex investment portfolios; and estates where the beneficiaries are in dispute with each other or with the executor.

In these cases, the cost of professional advice — typically a percentage of the estate value, fixed fee, or hourly rate — is a justified and proportionate expense of the administration and is properly charged to the estate. The alternative is an executor who takes personal financial risk without the knowledge to manage it. For the full breakdown of what professional probate costs, see our probate costs guide.

Written by Simon Jenkins, SRA 167489, Solicitor at Curtis Legal Limited (SRA 450129). If you have concerns about executor liability in an estate you are administering, call freephone 0800 214 216 or request a same-day callback.