Do family members inherit the debts?

No. Debts are paid from the estate. Relatives are only liable where they guaranteed the debt or held it jointly.

Duties · 5 min read

What to do when the estate is insolvent

An estate is insolvent when the debts exceed the assets. The rules change completely at that point, and acting as if nothing has changed is how executors end up personally liable.

Written and reviewed by Ramani Gill, Founder & CEO — Solicitor, TEP, BA, LLM. Last reviewed 2026-08-19.

How to spot it early

Total the debts before you pay any of them
Include credit cards, overdrafts, personal guarantees and tax
Include a mortgage shortfall where the property is in negative equity
Remember that funeral costs and administration expenses rank ahead of most debts

What changes

Solvent estate	Insolvent estate
Beneficiaries receive the residue	Beneficiaries receive nothing
Debts paid as they are agreed	Statutory order of priority applies strictly
Executor administers normally	Insolvency rules for deceased estates apply

Take advice before you spend anything

Paying one creditor ahead of another in an insolvent estate makes the executor personally liable to the creditor who lost out. This is the clearest case for a solicitor or insolvency practitioner.

Doing this yourself?

Our guided service walks an executor through valuations, the HMCTS forms and the estate accounts for a one-off £349.

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The practical options

Renounce, if you have not yet started to act
Administer the estate under the insolvency rules, with advice
Apply for an insolvency administration order so the estate is dealt with formally

GOV.UK — Debts and taxes of the estate

Common questions

Do family members inherit the debts?: No. Debts are paid from the estate. Relatives are only liable where they guaranteed the debt or held it jointly.

Not sure whether this estate is straightforward?

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