Funeral expenses and over paid pension

shadyadie

My Father in Law died in April.
He lived in a rented house and only had a couple of hundred in the bank.
My wife and I have arranged and paid for the funeral ourselves as there wasn't a will and put the money from his bank towards it. (it covered about a tenth of the cost)
Now the state pension has told us that they had paid him 2 weeks of pension after he had passed away and want it back.

Am right in saying all his estate goes towards the funeral first and then to others if there is anything left, or do I have to pay this back? out of my own pocket.

System

There is a strict legal priority for debt repayment. See below from bereavementadvice.org

1. Secured creditors. They will recover what they are owed from the asset which secures the debt. Examples of a secured debt are a mortgage on a property or a loan for purchase of a car. If the asset against which the debt was secured does not cover the entire debt, the balance of the debt falls into the unsecured creditors category.
2. The funeral expenses. These should be reasonable and proportionate to the size of the estate. For example one cannot use £6000 of a £7000 estate on the funeral if there are also debts of several thousands of pounds. A gravestone or other permanent memorial is not considered to be part of the funeral expenses.
Family members who pay for a funeral from their own money may find it difficult to recover the money later if there are other creditors.
Please do not arrange a funeral if you do not know where the money to pay for it will come from. Call us for more information on what to do in this situation.
3. Testamentary expenses. These are the expenses you incur as part of the administration of the estate. You should keep a careful record of these and keep any receipts for petrol or train journeys, postage etc. You may also want to ask for proof of posting certificates at a Post Office which are free of charge.
4. Preferred debts and Preferential debts – these are very rare and will not apply in most cases. Wages due to employees are preferential debts and this may apply where the deceased received direct payments for employing carers.
5. Unsecured creditors e.g. debts to local and central government. utility bills, bank loans, credit and store card debts.
6. Interest due on unsecured loans.
7. Deferred debts – an example would be an informal loan between family members.

So at best the overpayments fall into No. 4. You have nothing to do with the debts of the estate

shadyadie

Thanks for that, it's nice to get some reassurance that we are doing this right. As we have never had to do this before.