Debt after someone passes away

shamoo

Hello all

Recently my dad passed away suddenly and unexpectedly at the age of 52. I have been left with dealing with his estate and need some advise. some facts that may help you.
My mum is alive (does not work - disability)
they rent do not own
has not gone to probate
he has 1 life insurance that will go to my mum
1 private pension that will go to my mum
and a small amount of savings that were in a single account and is being transferred to my mums account.
All debt were in his name as a sole account holder

The savings do not cover his debt. (but life and pension will cover it)
he had
1 x loan
4 x credit card

my questions to you are:
1, is his life insurance part of his estate? (I have read it's not)
2, does his debt need to be paid by my mum who will receive his money (insurance)
3, if the debit does not need to be paid by my mum, whats my first step?

Thanks for your help

Colin

Torry_Quine

If debts are entirely in his name then his estate is liable and if insufficient funds then the debt die with him no matter what any company says otherwise.

Did he have a will and if not then is someone going to administer his estate.?

Sorry for your loss. Take care

shamoo

He did have a will, I am a executor of the will. i'm reading conflicting things about life insurance and pension money becoming part of his estate?

thanks

HappyMJ

shamoo wrote: »

He did have a will, I am a executor of the will. i'm reading conflicting things about life insurance and pension money becoming part of his estate?

thanks

If the policy was a joint life policy then she'll get all the money. They paid the premium and anything held jointly automatically goes to other person and not to the estate.

If it's a single life policy the estate gets the money then it gets distributed according to his wishes after the debts have been paid.

andyfromotley

The savings will be part of his estate and will need to go towards his debts.

asparagus1968

hello, so sorry for your loss. The following thread may help you regarding the estate and debt.


https://forums.moneysavingexpert.com/discussion/4896302

MataNui

The saving cannot go to your mum no matter what the will says. they are part of the estate and all debts must be settled first. Any money left in the savings AFTER paying all the debts will go to your mum.

The pension is not a part of the estate so you dont have to include that for paying off debts.

Life insurance may not be part of the estate. If the insurance is payable to a named person then it is not part of the estate. An example of this sort of payment would be a death in service benefit run by some companies. You can also specify on many standard life insurance policies who they are payed to. Also if it was a joint policy it is not part of the estate. You need to check the policy.

Also dont forget any assets in his name like a car for example. That would be part of the estate and would need to be sold to pay the debts and not passed on.

shamoo

thanks for the replies,
the life insurance was a joint policy and he has no car, it was a company car.
The money he had is less than the debt.

Marktheshark

Obtain 3 quotes for a funeral and the bank will relese the savings to pay towards the funeral.
If there is not enough / Nothing left then after making funeral arrangements they can simply do nothing if they are no joint assets.
Refer any nasty letters back to the senders and instruct them to contact the administrators of the estate, which if there is no estate there wont be any to contact.

Karonher

This is taken from the link above.


"Are outstanding debts passed to family? Importantly, only the deceased's estate is liable for any debts – not their family. If there's only enough to pay some debts, these generally need to be prioritised in this order: secured debts (such as mortgage), then funeral costs, then other debts (including taxes). We've simplified this to give you an idea, but the order of payment required under the law is complex. There are rules on how much everyone should get if there isn't enough to pay all of these. Contact the Citizens Advice or consult a lawyer."

From reading this I think the estate will need to pay as many creditors as possible until the money runs out. It also says which groups need to be paid first. After that the family do not have to pay the rest.

shamoo

thanks everyone for your help, the funeral was/has been paid by his estate. Potentially you have help save my mum £15k hopefully more..
Again many thanks