Administration of insolvent deceased estates (Part XI)

Dealing with a deceased person’s estate is never an easy thing. But when the deceased is also insolvent it can make the situation particularly difficult.

A legal personal representative is the person responsible to attend to various tasks on behalf of a deceased estate.   

A person might be appointed to that role by being named as the executor in the Will or, if there was no Will, by being appointed administrator of the estate.


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Dealing with an insolvent deceased estate is never easy, but with proper information and planning, the decision can be a made a little bit easier.

Once an estate is declared bankrupt it follows a similar path to that of a living bankrupt. 
For a deceased person’s estate to become bankrupt, this can occur by two methods, either:

Insolvent deceased estates

Voluntarily through the executor of the deceased estate applying to court, or

Insolvent deceased estates


By a creditor applying to bankrupt the deceased.

Making a deceased estate bankrupt

Just like with living people, if a person dies while insolvent, or unable to pay their debts owed, their deceased estate can be declared bankrupt.

An application for bankrupting a deceased estate may be made in the Federal Court or the Federal Circuit Court.    
The Act provides for the administrator of a deceased’s estate or for a creditor or a group of creditors owed at least $5,000 to apply to the court for the administration of a deceased person’s estate.  

An administrator could apply if the deceased estate was insolvent and the provisions of the deceased’s will, if there is one, could not be given effect to.  

The advantages for an Executor in proceeding with an administration of a Deceased Estate under Part XI of the Act is that the executor is not personally liable for any alleged misappropriation; breach of trust or maladministration of the deceased estate. 

The administration of the estate with some exceptions is similar to the administration of a bankrupt estate.

Please view our locations or get in touch with your local administration of deceased estate experts.  


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