Dad died, left a debt now bank probably want his life assurance

Engineer228

Hope you can help. My dad died 5 weeks ago aged 74 and as his son I am sole beneficiary and executor.

No one else is involved in the will ( mum divorced him when I was a kid ) and Dad left few possessions apart from a 25 yr old rusty camper van and a £1451 debt ( personal loan without insurance.) There is no property to sell.

Dads bank paid the funeral expenses direct from his current account which left just a £ 78 balance.

However I did eventually find £1684 in life assurance ( not held in trust ) which has been paid to myself.

Now the bank want an Estate Account of Assets and Liabilites including details of any motor vehicles, possessions and insurance policies.

Am I right in thinking the Bank have the right to claim their £ 1451 from the life assurance ?

I was hoping to put Dads life assurance into his grandsons trust account ( hes only 3 yrs old ) .

McKneff

i would have thought that the life assurance would be considered to be part of his estate therefore as the bank is a creditor and therefore have to be paid from this estate as has the funeral director has been paid from his estate. Sorry

lisyloo

Yes that's right.
If the insruance is not in trust then the insurance payout goes into the estate.
The estate pays any creditors before any beneficiaries get their share.

McKneff

i wouldnt write off the rusty old camper van
they can be worth a fortune these days as a project.
Put an ad in a newspaper in Newquay, and you'll be surprised how many enquiries you get.

My condolences about your dad.

dunstonh

Your dad's debts are offset against his assets. As the life assurance was not in trust (and assuming the policy owner was him as well) then the proceeds should be paid to the estate and used to clear the debt.

jamesd

The bank knew that there were likely to be assets that would be available after your father's death so that he wouldn't default on the loan in death as he wouldn't if he was alive. Without such things a bank would have to charge what could otherwise seem like extortionate interest rates for loans to people as they grow older, since risk of death increases with age.