What happens to bills when someone dies?
slopemaster
Posts: 1,579 Forumite
I am trying to ‘put my affairs in order’. I have no reason to think I’m going to die (except that we all are!) but am thinking of leaving as few problems as possible were I to fall under a bus tomorrow. I have recently made a will, but now grappling with all the other logistics. I have read the sticky about what to do if someone dies – all of it! And followed up some useful websites. But still got some questions.
In particular, what happens about bills etc?
I live alone and have direct debits for mortgage, utilities, and finance on a sofa etc.
If I died, my account would be frozen and these payments would stop going out.
There will, eventually, be enough money to pay off the mortgage etc. But it would take several months for the person who will inherit the house (and be an executor) to get the money, and in the meantime they wouldn’t be able to afford all that, mortgage, bills, council tax etc on a house they don’t yet own, don’t live in, and can’t sell until they own it!! Will the mortgage holder have to be approached and asked to suspend payments? What if they don’t agree? What if finance on sofa for example isn’t paid – will they be able to claim huge penalties from the estate? Will the house insurance be invalid? Does the executor have to pay out to insure it?
So it all seems a bit of a poisoned chalice.
Wish I’d asked the solicitor some of these questions, but it’s only now I think of it.
any pointers gratefully received
In particular, what happens about bills etc?
I live alone and have direct debits for mortgage, utilities, and finance on a sofa etc.
If I died, my account would be frozen and these payments would stop going out.
There will, eventually, be enough money to pay off the mortgage etc. But it would take several months for the person who will inherit the house (and be an executor) to get the money, and in the meantime they wouldn’t be able to afford all that, mortgage, bills, council tax etc on a house they don’t yet own, don’t live in, and can’t sell until they own it!! Will the mortgage holder have to be approached and asked to suspend payments? What if they don’t agree? What if finance on sofa for example isn’t paid – will they be able to claim huge penalties from the estate? Will the house insurance be invalid? Does the executor have to pay out to insure it?
So it all seems a bit of a poisoned chalice.
Wish I’d asked the solicitor some of these questions, but it’s only now I think of it.
any pointers gratefully received
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Comments
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Not sure about the mortgage, but we've just experienced this with a relative. We visited the bank with the death certificate and from then on all activity (out) was stopped. We could still pay money in e.g. when we disposed of assets like a car .
We followed this up with a phone call to all the utilities etc (and any company receiving payment from a direct debit). This supended or cancelled all services like Sky, Broadband etc. Most companies have a breavement team - I found everyone very helpful.
Council tax is also suspended from date of death. Other bills like management services for a flat, continue to accrue and must be settled on sale of the property (well, that's what we've been told).
On sale of the property the gas and electricity meters will be read and a final bill sent.
Hope that helps a bit!0 -
Is your mortgage repayment covered by insurance on death?0
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Is your mortgage repayment covered by insurance on death?
It does depend on mortgage, but IME most mortgage companies insist upon a Life insurance policy to pay off the outstanding mortgage on death, only to ensure they get their money back, no altruism there
So, basically yes, unless the person has cancelled the policy or not kept up paymentsEight out of ten owners who expressed a preference said their cats preferred other peoples gardens0 -
Not in my experience.It does depend on mortgage, but IME most mortgage companies insist upon a Life insurance policy to pay off the outstanding mortgage on death, only to ensure they get their money back, no altruism there
So, basically yes, unless the person has cancelled the policy or not kept up payments
I have never had life insurance and it has never been mentioned as a condition of any mortgage I have taken out. If it had I would have refused.0 -
My experience is the same as Farway's which was why I asked the OP - I can't imagine any mortgage company allowing you not to be covered against repayment in the case of death.0
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My experience is the same as Farway's which was why I asked the OP - I can't imagine any mortgage company allowing you not to be covered against repayment in the case of death.
I'm single so do not need life insurance.
All my mortgages have been repayment mortgages the current one is interest only.
My first mortgage I took in 1985 from Abbey National on the application form it did have a section that made it look as if life insurance was required I deleted it, was given the mortgage and nothing was said about life insurance.
The subsequent mortgages I have taken out with Abbey National, Halifax and now First Direct have no mention of Life Insurance whatsoever.
Back in the 70's lenders may have insisted on Life Insurance as a condition but it generally hasn't been the case for the last 25 years.
Why would they need it? They have the security of the house.
from
http://www.moneysavingexpert.com/mortgages/cheaper-life-insurance
"Is Mortgage Life Assurance worth having?
Most lenders strongly recommend you get a policy when you take out a mortgage and it isn’t a bad idea. If done correctly, it shouldn't be prohibitively expensive. Yet lenders will try and flog you their own ridiculously expensive policies, often without regard to circumstance. For example, if you don’t have anyone to leave your property to and money is tight, then there’s no need."0 -
......if you don’t have anyone to leave your property to ......
That's probably the key. You're right about the mortgage company having the property in the event of you popping your clogs whilst still in hock to them. But the position would be different if you were a middle aged woman who hadn't worked since having her children whose husband suddenly died of a heart attack.
Agree also aboutavoiding the lender's insurance - I always arranged my own which was far cheaper.0 -
When Dad passed away, he'd just come to the end of his buy your kitchen now and pay in 3 years time, interest free. As executor, first I knew of it was when a bill came though and due to non payment they'd hiked an interest rate on it. Rang B&Q, and I think it was via GE Capital, they were very good, removed interest charges, and let me pay it off without penalties once I had access to the bank accounts. Halifax bank were also very good and released funds before the final papers had come through.
Must admit, I found all companies were very sympathetic and gave me breathing space; that might have been because they knew funds were availble, so would get payment sooner or later, but I never had any heavy handedness from any company.0 -
Does anyone have experience of what happens with a joint account when one accountholder dies?
There are ambiguous references in the bank's conditions that indicate that the account will be transferred into the sole name of the survivor, but it seems to me that there might be other implications regarding the deceased's estate.
Thanks for any help.0 -
The joint account does indeed pass into the sole name of the survivor, and I've been told that even if the deceased wanted something different to happen, it all now belongs to the survivor.
In our case it happened completely seamlessly and Mum's had no problems with standing orders and DDs continuing to be paid.Signature removed for peace of mind0
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