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KembaraXtra – Legal Terms – Marshalling of Assets in Probate
Marshalling of assets in probate refers to the process of arranging the payment of a deceased person’s debts from the estate in a fair and legally ordered manner.
The Administration of Estates Act 1925 sets out the order in which estate assets should normally be used to satisfy debts and liabilities. Mortgaged property is generally applied first toward discharging the relevant mortgage debt.
Creditors, however, are not always restricted to claiming against particular assets. If a creditor enforces payment against property that should not primarily have been used, adjustments may later be required.
The deceased’s personal representatives must therefore compensate beneficiaries whose inheritance was improperly reduced because an asset was used out of the proper order.
Marshalling of assets in probate refers to the process of arranging the payment of a deceased person’s debts from the estate in a fair and legally ordered manner.
The Administration of Estates Act 1925 sets out the order in which estate assets should normally be used to satisfy debts and liabilities. Mortgaged property is generally applied first toward discharging the relevant mortgage debt.
Creditors, however, are not always restricted to claiming against particular assets. If a creditor enforces payment against property that should not primarily have been used, adjustments may later be required.
The deceased’s personal representatives must therefore compensate beneficiaries whose inheritance was improperly reduced because an asset was used out of the proper order.
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