Advice on valuing my wife's estate against her debts.

Yorkshireman99

Keep_pedalling wrote: »

Even though holding the property as joint tenants takes your wife's share of the house out of her estate, you need to be aware that creditors can still pursue the dept via a Insolvency Administration Order.

http://www.lucasjohnson.co.uk/tag/insolvent-administration-order/

In theory yes but with the scale debt stated by the OP it is unlikely to happen.

Kynthia

I'm sorry for your loss.

I think the main thing is to not rush anything and take the time to find out the correct position regarding ownership of the property, any assets, and all the debts including the funeral costs. These things take time and you can't un-pay someone if you find out you didn't need to, or shouldn't have, paid them.

Trelawneyman

Sound advice, so thanks for that. I will wait until I get some more clear detail on the whole situation before making any decisions. Strangely I do recall that one of the card companies I advised of her death did say that her debt doesn't pass to anyone else and if her estate didn't have sufficient funds they would write off the debt. I can't for the life of me remember which one that was now but it came back to me just now. I suppose I wasn't thinking too clearly at the time.

I presume I would need some independent authority to state what her overall estate calculates out to taking into account all debts and assets as
I'm sure the creditors need some sort of proof?

da_rule

If you are administering the estate then you are the proof. Simply compile a spreadsheet/list of all the debts with the relevant evidence (final statements/letters etc).

Then value the assets that can be used to pay debts (single bank account/savings accounts, any insurances and any non-jointly owned assets that could be sold).

You then pay the debts in order or priority (secured, funeral, preferred, unsecured etc).

If there isn't enough to pay all the unsecured debt there are 2 options:
1) The company wipes it
2) They are paid a proportion - for example, if there are unsecured debts of £10,000 (assuming the higher ranking debts are dealt with) but there's only £1,000 in the pot to pay the debts, all of the unsecured creditors will get 10% of what they are owed

Yorkshireman99

da_rule wrote: »

If you are administering the estate then you are the proof. Simply compile a spreadsheet/list of all the debts with the relevant evidence (final statements/letters etc).

Then value the assets that can be used to pay debts (single bank account/savings accounts, any insurances and any non-jointly owned assets that could be sold).

You then pay the debts in order or priority (secured, funeral, preferred, unsecured etc).

If there isn't enough to pay all the unsecured debt there are 2 options:
1) The company wipes it
2) They are paid a proportion - for example, if there are unsecured debts of £10,000 (assuming the higher ranking debts are dealt with) but there's only £1,000 in the pot to pay the debts, all of the unsecured creditors will get 10% of what they are owed

Very bad advice. The OP needs to be very careful they don't end up being liable for intermedling. The standard advice with an insolvent estate is to leave well alone.

konark

You can, of course, still arrange a funeral and pay for it out of your wife's bank account (funds permitting).

da_rule

Yorkshireman99 wrote: »

Very bad advice. The OP needs to be very careful they don't end up being liable for intermedling. The standard advice with an insolvent estate is to leave well alone.

As the estate is intestate, the OP will be at the top of the list when it comes to being the administrator, unless he chooses to appoint a solicitor or allow someone lower down the order to deal with it. It could be argued that he has already started intermedling as he has done more than simply tell people about the death, he has started making enquiries into the amount of debt owed by the estate.

The OP can't really "leave well alone", he needs to get it sorted. And he can either do this himself or appoint someone to do it for him.

If there isn't the money to pay the debts then there isn't the money. Creditors have to either wipe the debt or get what they're given (either nothing or a proportion of what they're owed). But at the same time, the creditors are not going to go away, so it can't just be swept under the carpet.

The most important thing to check is the mortgage. As this is a secured debt it outranks even the funeral costs. It would be worthwhile checking that they are happy to remove your wife's name and therefore her estates liability. Obviously the liability then passes solely to the OP, but it could've done anyway as the mortgage would have joint and several liability.

Yorkshireman99

da_rule wrote: »

As the estate is intestate, the OP will be at the top of the list when it comes to being the administrator, unless he chooses to appoint a solicitor or allow someone lower down the order to deal with it. It could be argued that he has already started intermedling as he has done more than simply tell people about the death, he has started making enquiries into the amount of debt owed by the estate.

The OP can't really "leave well alone", he needs to get it sorted. And he can either do this himself or appoint someone to do it for him.

If there isn't the money to pay the debts then there isn't the money. Creditors have to either wipe the debt or get what they're given (either nothing or a proportion of what they're owed). But at the same time, the creditors are not going to go away, so it can't just be swept under the carpet.

The most important thing to check is the mortgage. As this is a secured debt it outranks even the funeral costs. It would be worthwhile checking that they are happy to remove your wife's name and therefore her estates liability. Obviously the liability then passes solely to the OP, but it could've done anyway as the mortgage would have joint and several liability.

Wrong again. As a general principle nobody has any obligation to administer an intestate estate nor does anyone have any authority or obligation to appoint a solicitor to do the work. The creditors might wish to appoint but that would be up to them.In any case no professional is going to take the job unless they will be paid. Funeral costs outrank all others. So far the OP has probably not done enough to be considered intermeddling. The liklihood is that the OP will be able to strike a deal with the mortage lender. The chances are that most of the unsecured debt will get written off. There is no reason for the OP to pay them himself.

securityguy

YM and I keep making this point, and people keep missing it. The sequence of priority for intestacy is to sort out who administers the estate if there is more than one person applying. There are situations where people can be forced to give information as a personal representative, and YM and I have discussed in the past how realistic those situations are. But you cannot be forced to take on the role of an administrator, and if you are in the situation where your spouse has debts but all their assets are in joint names, there is no point: there are no assets, there are only debts, and it isn't your problem.

Where YM and I have disagreed is that I think you can refuse to even answer questions about the estate (what assets did my wife have? Dunno, you'll have to ask the administrator, who isn't me) whereas he thinks there is no harm, and possibly general "moral good" in answering questions provided it does't constitute intermeddling. I think it depends on who's asking and whether they say please, but that's a detail: what you certainly cannot be is forced to administer an estate. Not even your spouse's or your parents'.

There is now a small change from the past in that if you own a house as joint tenants and one party has debts and then dies, then the creditors can pursue the survivor, who is now sole owner, for the debt, even if it was not secured over the house. So the old idea that a joint tenancy existed completely outside the estate has been slightly weakened.

This is not, in a million years, going to apply to eight grands' worth of card debt: no court is possibly going to grant a possession order for eight grand. At the very, very worst a deal might be struck in which eight grand is added to the mortgage (there is clearly equity to cover that) and paid out to the creditors for the survivor to repay over the course of the loan. However, the executors cannot recover the cost of doing this (the liability would sit with the estate, which has no money, and the liability of the joint tenant is just for the debt, not the estate costs) and it simply wouldn't be worth their while.

"It could be argued that he has already started intermedling as he has done more than simply tell people about the death, he has started making enquiries into the amount of debt owed by the estate. "

No, it couldn't. Courts have had to look at intermeddling in depth, as it has arisen in cases in which people have been executors, renounced and then bought assets from the estate and been accused of intermeddling and hence conflict of interest. Intermeddling excludes many of the things used to frighten people into acting, going all the way up to being a signatory on an application to open an executor bank account being held to not constitute intermeddling sufficient to prevent renunciation.

Trelawneyman

Sorry for not being here yesterday, just other things got in the way. I have read all of the comments and am trying to make sense of them all. I will read them all again and try to understand them better as struggling with it a bit for now. I do appreciate all of your help and advice.

I have considered appointing a solicitor to deal with her estate but did wonder if anyone would take it on when they know the facts around the value of the estate? I am a little confused to say the least but have garnered the information that it seems the funeral costs are the highest priority debt against the estate. Stupid thing is, I took out a funeral payment plan for myself last year as I didn't want her lumbered with those costs if I died.
This was due to some serious reflections following being diagnosed with Diabetes about 15 months ago and having a stroke the week after. I have recovered from that very well now and have full movement in my left arm and left leg again.

Sorry, rambling a bit now. My main concern is keeping the house so I can keep my son and daughter safe. I can work on in my job for as long as I need to and believe I can extend the mortgage term as necessary. I appreciate some ongoing bills will be difficult to manage but if I am sensible and refer to sites like this regularly I should be able to manage that.

I will go and read the comments and advice again to make sure I understand what is being suggested.

Thank you all.