Mother died intestate, debts exceed assets

Tealblue

Just found this forum - apologies if I'm asking something which has already been answered. If so, pointing me to the relevant thread would be much appreciated.

Elderly lady has been in care home for several years and died in March, leaving cash at bank of about £6,000 but debts of around £24,000. No will. Son/other family members aren't interested in taking on the administration of an estate when they have nothing to gain but could incur personal liabilities.

What happens if nobody does anything...?

konark

It would be up to her creditor/s to apply to administer the estate and pay themselves about 25p in the £1, or less after funeral expenses. If there's one large creditor they will do this , but if, say she owed a grand to 24 creditors it probably wouldn't be worth anyone's while to do it and her money would just stay in the bank..

By the way, the family members are quite correct not to get involved in administering an insolvent estate

securityguy

Tealblue wrote: »

Elderly lady has been in care home for several years and died in March, leaving cash at bank of about £6,000 but debts of around £24,000. No will. Son/other family members aren't interested in taking on the administration of an estate when they have nothing to gain but could incur personal liabilities.

They are very sensible and have been well-advised. The "well, someone has to do it, so I will, even though it's insolvent" mentality dies very hard.

What happens if nobody does anything...?

Not the relatives' problem, not your problem. In the limit, creditors could apply for administration and pay themselves a portion of what they are owed, but for six grand (perhaps four after funeral) it almost certainly isn't worth their while unless it's a very straightforward estate owing all then debt to one creditor. Even then, it's going to be marginal whether it's worth the work involved.

troubleinparadise

I'm surprised she managed to have run up such a large debt given she had been living in a care home, presumably paid for by the LA as her assets fell below the funding threshold; was no-one acting as her Attorney for her finances, or keeping an eye out for her?

Not that it matters given that Attorneyship ceases upon death, but sad that things were in such a muddle when she was in full time care.

securityguy

troubleinparadise wrote: »

I'm surprised she managed to have run up such a large debt given she had been living in a care home

It could have pre-dated care, of course.

Tealblue

Very many thanks for your help and advice - much appreciated (and will be followed!).