What is a section 27 notice to creditors?

The personal representatives could be personally liable for debts or sums due to beneficiaries if they distribute an estate and later discover:

1. that the deceased had debts which the estate cannot pay, or
2. that there are funds due to beneficiaries previously thought to be missing or dead (or simply not known) which the estate cannot pay.

No personal representative should be personally liable for such things. Thankfully, there is a simple method of protection: the section 27 notice to creditors. 

It is not a legal requirement, for many estates it is unnecessary and it may even seem a little antiquated.

However, the notice ensures that the personal representatives will not be personally liable for future claims by creditors or (with one or two minor exceptions) beneficiaries.

For this reason, it is recommended for many estates. Particularly those where there is a suspicion that debts or beneficiaries may come out of the woodwork.

It is also known as Trustee Act 1925 notice.

Advert in the London Gazette and a local paper

A section 27 notice is a short, simple notice containing the name of the deceased, the time period in which a claim must be made and the address to which a claim must be made.

It must be placed in the London Gazette and in a local newspaper which covers the place of the deceased’s land (if the deceased had land in various places, it may be necessary to advertise in various local papers).

The notice should be posted after the grant has been received.

It can be posted with the aid of online services such as www.legalads.co.uk and www.rockwelllegalnotices.co.uk (we have not tested these services), or direct to the London Gazette and the relevant local paper. Prices vary, but you are likely to pay upwards of £100 in total.

Distributing the estate

A section 27 notice contains a time limit, normally two months, which is the minimum. The estate should not be distributed until the expiry of this time limit.

This can cause considerable delay. However, the delay may be in the best interests of the estate.

Why is it called a section 27 notice?

It is called a “section 27” notice because of the provisions of section 27 of the Trustee Act 1925. For this reason, you might see the notice referred to a Trustee Act 1925 notice.