Life insurance payout and wifes debts

milothewestie

my wife died in june 2014,we took out a life policy in her name about 5 years ago in trust to me her husband,the policy payed out to me in full so my question is this

there is enough money to pay off her debts after funeral paid

House is in my sole name and always has been i had house before we met and always paid mortgage and bills out of my account
her debts total about £8000
3 credit cards 2 x£2000 each and one owing £400
and a catologue £3000 pounds

as she had been ill for about three years she didn't earn any money and i supported her obviously but paid her debt payments up until her death.
do i now inherit her debts and become responsible for them and have to pay them out of the life insurance payout or do the debts die with her,were do i stand legally

regards and thanks for any answers

PeacefulWaters

The estate is responsible for her debts, not you personally.

The proceeds of the life policy are yours and not the estate's (assuming it was in trust).

If after valuing her bank accounts and property there is money left to pay the debts they should be settled. If there's not enough money the creditors should receive pro-rata payments to the value of the estate.

If her estate's "value" is zero send the lenders a death certificate with a covering note telling them she had no money and no assets. One or two of them might still request payment. Remind them that you're not liable and ask them to cease. After that they will stop, or leave themselves open to harassment allegations.

Had the policy not been written in trust the proceeds would have formed part of the estate and should then be used to settle the debts.

Useful link:
http://www.direct.gov.uk/en/prod_dg/groups/dg_digitalassets/@dg/@en/documents/digitalasset/dg_170740.pdf

There is a section on debts in there and another one here:
https://www.moneyadviceservice.org.uk/en/articles/dealing-with-the-debts-of-someone-who-has-died

milothewestie

thankyou, that's very informative

milothewestie

so with the house being solely in my name when i met my wife to her death is there any claim anyone can have on any equity it may have accrued over the last six years,although its still below the market value of when i purchased it in 2008 so i suppose is in negative equity

PeacefulWaters

milothewestie wrote: »

so with the house being solely in my name when i met my wife to her death is there any claim anyone can have on any equity it may have accrued over the last six years,although its still below the market value of when i purchased it in 2008 so i suppose is in negative equity

I'm no solicitor but I can't see any way in which they can have.

magpiecottage

milothewestie wrote: »

so with the house being solely in my name when i met my wife to her death is there any claim anyone can have on any equity it may have accrued over the last six years,although its still below the market value of when i purchased it in 2008 so i suppose is in negative equity

If the house was in your sole name then no.

Had it been owned under a joint tenancy (in England or Wales), then only loans that were secured on it (i.e. mortgages) would be.

milothewestie

magpiecottage wrote: »

If the house was in your sole name then no.

Had it been owned under a joint tenancy (in England or Wales), then only loans that were secured on it (i.e. mortgages) would be.

thanks magpie