Setting off deceased relatives account/credit card

Rich44_2

Long story short.

October last year my wife's aunt passed away
Mother in law dealing with estate
December mother in law dies (previous Estate not settled)

We've subsequently found mother in law had huge credit card debt with bank A and also bank account with bank A.

In said account is about £700 of her sister's money balance from life insurance after funeral expenses.

Bank A have written saying sorry blah blah were keeping the money to service the £4,000 credit card debt (who gives a very ill lady on benefits a card like that? But there you go)

We've written to them saying you can't have the money because:

1.its not hers it belongs to her sister's estate
2.by doing so they are withholding money from the estate, because more is owed than available this substantially reduces the total to be divided up amongst all the creditors.

At this moment in time they're refusing to budget, are they right? Where do we go from here? Do I tell the other creditors and let them fight it out?

Any thoughts suggestions gratefully received, thanks.

colsten

Rich44 wrote: »

(who gives a very ill lady on benefits a card like that? But there you go)

banks can't win, can they - if they do give people credit, it's wrong. If they don't give people credit, it's wrong.

Rich44 wrote: »

1.its not hers it belongs to her sister's estate

everything in your MIL's account is part of her estate

Rich44 wrote: »

2.by doing so they are withholding money from the estate, because more is owed than available this substantially reduces the total to be divided up amongst all the creditors.

the fact that she owes more than she has is neither here nor there.

Rich44 wrote: »

At this moment in time they're refusing to budget, are they right?

check the T&Cs of the account, there is almost certainly an offset clause in them

Rich44 wrote: »

Do I tell the other creditors and let them fight it out?

it depends on the debts whether and how they need to be settled. You/the executor should seek legal advice if unsure.

System

The mistake that your MIL made was not opening a separate executor account to deal with aunt's estate which would have safeguarded the money.

As it is all money's in MIL's accounts form part of the estate regardless of source.

It is normal when dealing with deceased's accounts that if a bank hold both money and debt then offset is applied and the residue (if any) can then be paid out to the executor or the debt forms part of the estate