What happens now?

Poppops

My father has just died. He has no estate. He lived with my mother in social housing and they lived week to week on their pensions.

I have been paying some of their bills for sometime including a credit card which has a balance of £6000 left on it. It was quite a hefty sum when I finally found out about it as it had incurred many late and non payment charges.

My dad had dementia and until then had made every payment on time. Mum never opened mail or dealt with post and when dad was unable to she just left that to me. When I found out about the bill I contacted the credit card company. They wouldn't reduce the charges but did allow a payment plan and I have been paying £300 per month on it myself for some time

Mum still lives in the council house she lived in with dad. The only assets they have are things like the TV which she will obviously still need. No money in the bank. No car.

So what happens now? Do I have to complete any forms to prove there are no assets to disperse?

And what about this debt? I have read about estates being declared insolvent if there is more debt than assets. I would like to avoid this at all costs and would rather continue paying the debt than allow this to happen. Pre dementia my dad would have been horrified at the thought of this. Is the creditor likely to allow me to do this?

Any advice would be much appreciated. Many thanks

FreeBear

Is the credit card in joint names of both your father and mother, or was it in just his name ?

If the latter, stop making payments and inform the credit card company that the holder is deceased and the estate is most likely insolvent. Their bereavement team might call you and give you some bull about "because you have been paying the debt, you are responsible for the outstanding balance". That would be cobblers.

Even if the estate is solvent after paying funeral expenses, the credit card company would have to join any other unsecured creditors and wait for a pro-rata payment. Play hard ball with them and demand that they cease adding penalty charges and interest and they will only get X amount based on what was owed at the time of death IF there is any money left.

If the credit card was in joint names, advice will be different.

Savvy_Sue

I am sorry for your loss, and for the problems this is leaving. Have you found our sticky threads at the top of this board?

There is a lot to be done, but the thing to remember is that very little of it has to be done immediately. I'd say the priorities are registering the death, thinking about the funeral, and notifying pension providers that Dad has died, then checking if Mum is entitled to Pension Credit / housing benefit / council tax benefit - so that you know sooner rather than later what Mum's income is going to be.

First question, had your dad made a will? If he had, then that needs to be dealt with. Post back with what it said if you find one.

If you / Mum are sure there's no will, then in this situation there's probably little to be gained from obtaining Letters of Administration.

So I think your first step is a bit of information gathering (although you may already know some of these things), and you might also want to do a bit of future proofing ...

Was the credit card debt in Dad's sole name, or in joint names? I am sure the company will be only too delighted if you carry on paying it off, but if it was in his sole name, then you might be able to get it written off. Your choice, of course. If in joint names it's probably now your Mum's responsibility, although again it could be worth talking to someone like Stepchange or CAP who might be able to get the total reduced even though you weren't able to manage that. Note that the two I've mentioned are 'good' organisations who don't charge a fee! So you're no worse off if they can't help. You say your dad would be horrified, but I can't help feeling that your money might be better spent looking after mum if she needs it, rather than settling this debt if it can be written off.

Oh, and your mum's housing department may have someone who would help her with a benefits review and making claims. Also very important to check that the tenancy is changed into her name - if it was a joint tenancy that's straightforward, but if it was in Dad's sole name then it's important to get that sorted.

Are the bank accounts in joint names? Are they in credit? If in his sole name, then it may be more complicated to get the balance transferred to Mum, but with small sums then just showing the death certificate may be enough. If in joint names, the balance passes to Mum automatically.

How long since your dad's dementia started, and had your mum claimed a single person discount on the council tax because of it? If not, I don't know if that can be backdated, probably more likely if the dementia was formally diagnosed. Obviously she can definitely get that now, and it will be backdated to date of Dad's death. The single person discount may sound odd, but it was mentioned to me when I reported Dad's death at his local council offices, and said that Mum would now be living alone. The lady asked if she was fully compos mentis, because if she couldn't look after her own affairs then no council tax would be due.

Which leads me on to, if you're going to sort out mum's finances from now on, you probably need to get Power of Attorney for her. But is there a reason why she doesn't open letters, or was it just something your Dad always did? If she still has 'capacity' - ie she could look after her own financial affairs if she was so minded - then PofA is the way to go. If she lacks 'capacity' - ie she wouldn't understand the forms involved in PofA - then you'd have to apply to the Court of Protection, which is more complex.

Poppops

Wow. Thanks very much for the responses. Really useful.

I've already contacted the pension service. They were really helpful and told me that based on dad's NI contributions, mum's pension will increase. She will also be entitled to pension credit, housing benefit and council tax benefit which they were receiving as a couple.

I've had PoA for dad for some time. Mum doesn't deal with bills because he always did. I doubt she will change now. Lol.

Their bank accounts were in sole names. There is only a few pounds in dad's. The credit card was just in his name.

So if I could just ask ..... if I don't need to apply for a letter of administration as there is nothing to distribute, and I send the credit card company a copy of the death certificate, is it their decision whether or not the estate becomes insolvent? What process would it be?

Again, many thanks

Newly_retired

Excellent advice so far. Sorry for your loss, but you have already made good progress.
As your parents were already on Pension Credit, I wonder if there is entitlement to a funeral grant? Could be worth checking.
Otherwise, remember that whoever signs the contract is responsible for the costs, even if there is no money in the estate.

Newly_retired

As far as the credit card is concerned, I did wonder if you had assumed legal liability for it by making payments. But now that you have told us you had PoA for your dad, that should not be the case.
PoA ceases upon death, so you are no longer responsible and shoul stop making further payments.
I agree that it is more important to look after your mum's interests than to worry about the estate being insolvent.

konark

If the estate is insolvent there is no need to apply for probate, and in theory the Local Authority would pay for the funeral, but it will not be a very good one and most people would probably want to arrange their own.If your mother is on pension credit she will qualify for a funeral payment if there are no savings or insurance policies to cover this. Unfortunately it will not cover the whole funeral, probably about a third.

g6jns_2

konark wrote: »

If the estate is insolvent there is no need to apply for probate, and in theory the Local Authority would pay for the funeral, but it will not be a very good one and most people would probably want to arrange their own.If your mother is on pension credit she will qualify for a funeral payment if there are no savings or insurance policies to cover this. Unfortunately it will not cover the whole funeral, probably about a third.

Fact not theory. The local authority, or hospital if the deceased died there, are legally obliged to pay the full costs of a basic funeral. There will. be no frills and it will almost certainly be a cremation but will be dignified. The OP should not arrange the funeral unless they are prepared to pay the costs.

Poppops

Thanks again for the responses and advice

My brothers and I are taking care of the funeral arrangements so that isn't an issue. There are enough of us to enable mum to have the funeral she wants for dad. The pension service, who have been so helpful, told me mum is probably entitled to £700 which she said she would use for the headstone as we are paying the funeral

I can afford to keep making the payments to the credit card although obviously £300 a month is a lot of money.

If I send them a copy of the death certificate which I can collect tomorrow, are they likely to write it off do you think or would they make the estate insolvent.

I know i'm labouring this point and I apologise for that, but I just don't feel I could bear that to happen

wwl

You say the card was in his name - why are you proposing to make any payments?
If the estate has assets, these will go to the debt, if not, the debt dies with him. You should at the very least get them to put the account on hold until things are sorted out. (is it even legal for them to accept payments on the account of the deceased?)

Poppops

That's the questions I am asking

There is no estate. A few pounds only

I have been paying the debt since he became unable to. However this is the only debt he has and I would rather repay it than have his estate declared insolvent. But I don't know if the creditor will force that or just write off the debt