Executors: beware of DWP claims against an estate
When DWP recover overpayments after death
We have written previously in our Family Wealth blog about the necessity for executors of an estate to protect themselves from personal liability for estate debts. Being an executor of an estate is a demanding task and there are many pitfalls for the unwary that could lead to the executors incurring personal liability.
However, one debt that executors may fail to consider is overpayments from the Department of Work and Pensions – which will need to be recovered from the deceased’s estate.
Advertising for creditors
Unless the executors have very detailed knowledge of the deceased’s life and financial affairs (perhaps because the executor had also been an attorney for the deceased person during their lifetime) then it is unlikely that the executor will have details of all the debts that exist at the date of death. It may be particularly challenging to quantify debts such as income or capital gains tax liabilities.
Unless the executors and beneficiaries are identical it is therefore always advisable for the executors to advertise for creditors in a prescribed way known as a “statutory notice”. If no creditors come forward in the two month period specified in the statutory notice then the executors can safely distribute the estate’s assets provided they have no prior knowledge of debtors that haven’t come forward.
Monies owed to the Department of Work and Pensions
However, there is one type of debt not covered by the statutory notice procedure and that is monies owed to the Department of Work and Pensions (DWP). Most deceased persons over a certain age will be in receipt of DWP benefits even if it is only a State pension. Pension payments which are paid into a bank account can easily continue for a period after death or include payments for a post-death period. These overpayments will be repayable to the DWP as will any other overpaid benefits (such as attendance allowance) or repayments due to claims made in error. The liability to the DWP will still be payable even if the executors have placed statutory advertisements, and it can take some considerable time for the DWP to get in touch with the executors to ask for repayment.
How executors can protect themselves from liability
The safest course of action is not to distribute an estate until the DWP has specifically confirmed that it has no claims. The situation may improve in the future as the Society of Trust and Estate Practitioners is liaising with the DWP in the hope of speeding up notification of claims.
Contact a Probate and estate administration specialist
If you need advice on managing the estate of someone that has died, call us today on 0800 652 8025 or get in touch online. Your initial consultation is free. Our specialist solicitors are based in Birmingham, Bristol, Cardiff, London, Manchester, Southampton and Taunton are ready to discuss your case.