What is Section 27 of the Trustee Act 1925?
Section 27 of the Trustee Act 1925 establishes a statutory defense for personal representatives (executors and administrators) administering a deceased estate.
When an estate includes real property, executors cannot be certain whether hidden creditors, historical loans, or unknown beneficiaries exist. Section 27 allows executors to advertise their intention to distribute estate proceeds. Once the statutory notice period expires, the executors can distribute the proceeds without personal liability to any creditor who failed to notify them within the time window.
Where Must Section 27 Notices Be Advertised and How Much Do They Cost?
To satisfy the statutory requirements of Section 27(1), notices must be placed in specific publications:
1. The Gazette (London, Edinburgh, or Belfast depending on location): Official public record journal. Publishing a deceased estate notice costs approximately £90 to £120 + VAT.
2. A Local Newspaper: The statute requires publication in a newspaper circulating in the district where the deceased owned land or resided. Local press notices cost between £100 and £220 + VAT depending on the publisher.
Conveyancing solicitors typically charge an administrative fee of £100 to £200 + VAT to draft, verify, and monitor the statutory notices.
Can Property Sale Proceeds Be Distributed Before 2 Months?
Executors can exchange contracts and complete a property sale before the 2 months elapse, but they should not distribute net sale proceeds to beneficiaries until the full statutory notice period has expired.
If early distribution is unavoidable (e.g., to prevent severe financial hardship), executors must take out Section 27 / Early Distribution Indemnity Insurance to safeguard against sudden creditor enforcement.
Section 27 protects against creditors, but does NOT extinguish claims under the Inheritance (Provision for Family and Dependants) Act 1975, which allows disinherited relatives to make claims up to 6 months from the date of the Grant of Probate.