An estate is deemed to be bankrupt when the total value of its debts and liabilities (including conditional and future liabilities) is greater than the total value of its assets. A bankrupt estate is often a very daunting prospect for the executors or administrators (the PRs). The task of administering such an estate is challenging and often fraught with pitfalls. What should the PRs look out for?

If I was to provide some top tips for those potentially faced with insolvent estates, I would say the following are my top 3:

Unlike in personal insolvency, the estate is bankrupt when its liabilities are greater than assets. There is no need for an order declaring an estate bankrupt. Equally, there is, therefore, no specific, different Grant appointing those responsible for administering an insolvent estate. A bankrupt estate may be administered by its appointed executor or administrator (PR), applying insolvency rules in the administration process.