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Can Someone Who is Tied up in Bankruptcy be Appointed as an Executor or Power of Attorney?

When writing up a Will or Power of Attorney one needs to be careful that the person(s) that they are appointing are trustworthy and capable. There are also potential legal limitations if a person appointed has declared bankruptcy.

Appointment of an Undischarged Bankrupt as Executor:

The Trustees Act states that a court may remove a person who is, among other things, bankrupt. An undischarged bankrupt can be an executor of a will, but it complicates the process. The bankrupt executor’s status as executor may be challenged by the beneficiaries on the grounds that they are unsuitable for the position. There is some concern that a person who has declared bankruptcy may not be a suitable person to be in charge of handling trust funds, and administering an estate.

It is technically possible for a bankrupt person to be the executor in a Will. However, in reality, it is not the best idea. There are different types of problems that can occur in relation to that.

Appointment of an Undischarged Bankrupt as a Power of Attorney:

A person that is an undischarged bankrupt cannot be appointed as a Power of Attorney over another person’s financial affairs. Once they have been discharged from their bankruptcy they can then be appointed as a Power of Attorney for an estate. Having a bankruptcy in your past does not prevent you from becoming a Power of Attorney. However, until the discharge has occurred the Powers of Attorney Act prohibits an undischarged bankrupt person acting on a Power of Attorney.

Notice: The articles on our website are provided for general information purposes only and should not be relied upon as legal advice or opinion. They reflect the current state of the law as at the date of posting on the website, and are subject to change without notice. If you require legal advice or opinion, we would be pleased to provide you with our assistance on any of the issues raised in these articles.