Funeral costs, estates and a loan

Careful_with_that_Axe

Regarding the funeral costs, is there a Death Grant you could apply for or is it possible to borrow against one of the existing policies to cover the funeral costs? I was able to do this after my Mum's death to cover Inheritance tax and wonder if it may be possible to do it in this case.

Willman_Rodders

googler wrote: »

... if, taking my example above where the mortgage taken out was one of the bank's products, the bank's 'exposure' happened to exceed both the available funds AND the value of the house, does this mean the bank can effectively take first charge over ALL the deceased's estate with this set-off, and in one stroke 'take' the estate and deny ALL other creditors (including the funeral director)....?

.....

Hi Googler,

No. The Bank's collateral will only relate to it's bricks and mortar of the mortgaged building (It is different for a Ltd Company where a floating charge may exist that covers all the assets) So contents of the property (i.e. personal chattels etc) are not 'caught' by the bank's charge. Nor are savings held with other institutions ( though be aware though that some Banks have different 'High street' names but are one and the same bank), cash held in the house etc

So, in your example the bank would 1. exercise its automatic right of set off. This will take all credit balances from all accounts, and use them to reduce the customer's other liabilities. The result is just one total figure of indebtedness. If, after the property is realised and the sale proceeds fail to clear the customers liability in full then the bank will then become an unsecured creditor and make a claim on the customers estate for the residual amount outstanding. The bank will rank with all the other unsecured creditors, equally.

Couple of points to be aware of:
The accounts must be in the same name. So a Bank cannot set off a joint credit account with a single person's loan. (That does not mean to say they won't try! They have in the past, and been caught.)

Old_Wolf

Well it would appear that there is absolutely nothing we can do, they are simply entitled to take their money through the right of set off, which takes precedence over the normal estate rights, which I guess is the part we were confused about.

Citizens advice think that it sounds wrong but they can't prove it and suggest we ask a solicitor - problem is in the long run we accept it will need to be paid anyway and we'd probably end up better off financially paying the funeral expenses via a loan/CC etc and reclaiming it when the house is sold, than paying a solicitor even if he did tell us what we wanted to hear.

Will be writing a letter of complaint, over the shoddy treatment if nothing else, but at the moment it seems it will achieve nothing other than possibly making me feel better!

googler

This is really leaving a sour taste in my mouth......

Which bank?

Old_Wolf

Twas Nationwide. You live and learn, we're closing all accounts we have with them just cos of the sheer amount of aggravation it has been - but we do appreciate other banks may have been just as bad.