Dealing with estate following death

stupidmia

My father in law recently passed away after a long battle with terminal cancer. Even though he knew it would eventually overcome him, he would not sort his affairs until it was too late. My wife is his only child and he was long divorced from her mother (never remarried) and as well has looking after him for several months so he could die at home without Hospice at home help, she now has to deal with his estate (which I am trying to do most of).
He left enough money in a couple of accounts to pay for funeral expenses (which will cover the basic without headstone). He also left debt!!! A credit card debt, a Argos acct debt and two debts from many years ago which were being paid via collection agencies at small monthly amounts (one for a 7.5k loan at £10/month and another store card debt of almost 1k at £1/month). We know he had a private/company pension from when he worked up until 15 years ago and know there is a lump sum to be paid out....unfortunately, even though he said he thought he had sorted the nomination for my wife, we found out he hadnt!!!
Since he died intestate, she has now been told she must go through probate to get letter of assignment to release this sum to her...and since it was not nominated or set as a trust, it will form part of estate for inheritance tax purposes....which is not an issue in that it will get anywhere near the threshold.
The grey area is whether it becomes part of the estate for settling his debts? I was originally told by someone at Aviva that since it wasn't there when he died and because it will be eventually paid direct to my wife that it wouldn't be part of his estate with regards having to be used to clear his debts??
I fear that is wrong...but can't find anything that clarifies that?
My wife was always there for her dad and was desperate for a close relationship, but he not there for her as he was pretty selfish, yet ready to squander his money on a few different love interests that made him feel wanted (although it was always clear what they really wanted) hence the debts which he had nothing to show for....so I always hoped there would at least be a legacy that she could use to have a better future etc and perhaps see it as being down to her dad.
Unfortunately it is not looking good wrt the death lump sum in that it will be gobbled up paying off irresponsible debts....meaning she will have got little in her life and little now he has gone.
Any advice at this time on where she strands would be much appreciated.

pmlindyloo

Does this help?

https://www.probatewizard.co.uk/guides/private-pensions-and-lump-sum-payouts.html

stupidmia

Thanks for your prompt reply.
It kinda says what I already know regards nominations etc (and the fact she wasn't nominated...so it goes to the estate...albeit in her name as sole next of kin)....but still refers to the issue of estate with regards to tax.
My query is whether it being payed to the estate or not affects how it must be used to pay off liabilities?? Or is it only estate w.r.t to tax liabilities?
I know solicitors/probate specialists can deal with this sort of thing....but apart from this issue, everything else is more straight forward due to what he left...so the expense involved would rather be avoided if possible ;-)

stupidmia

Just realised that I posted this in the wrong category!How do I get it transferred into the thhread section that specifically discussed issues wlike this please?

pmlindyloo

stupidmia wrote: »

Just realised that I posted this in the wrong category!How do I get it transferred into the thhread section that specifically discussed issues wlike this please?

The quickest way is to copy and paste as a new thread.

Have you tried telephoning the Probate Office? I have always found them very helpful and it's free!

stupidmia

I actually did copy and paste it....and added an apology for doing the post twice!I did speak to a guy on the probate helpline...he was helpful in that he would send forms out, but when questioned about pension lump sums with regards to Estates, said he couldn't give advice, cos they dont have answers to such things?!!Maybe he was just a miserable one (he did sound it) and I should try again!

LisaLou1982

Just a quick one OP

When my dad died, i dealt with his estate. There was a will but i am the sole beneficiary and his only child.

Some few months after everything was sorted i had a letter from Lloyds who advised me of another pension sum that was outstanding that they hadnt made me aware of when i had contacted them about the original pension that i knew about. They had previously told me that everything had been paid.

On contact with them, they stated that my mum had been named and his sister (a very long time ago as he hadnt spoken to his sister in well over 30 years) but that a name for nomination does not necessarily succeed the next of kin or beneficiary of the will.

I received this payment (as expected) and a letter accompanying the cheque advised me that this does not make up any part of the estate.

As i inherited the whole estate anyway and it wasnt subject to any tax, it didnt actually make much difference but it sounds like your wifes situation isnt too dis-similar to mine