Car on finance deal can we pay before probate?

apb1

My mother died recently and I am an executor named in the will with my sister and my partner.

We are currently sorting out all the IHT and Probate Forms. There won't be any inheritance tax as the estate is sizeable (or it seems it to me!) but under the threshold once all the extras are added relating to deceased spouse and property etc.

My specific question is about mum's car. She had an agreement with Toyota finance with about 5.5k outstanding on it. The car is worth about 9k. My sister wants to buy it and is keen to do so now. Is it ok for her to pay the finance company off and take ownership of the car? Or are we supposed to wait for probate as technically it's a debt to the finance company? I have no problem with her doing this, we are close and get on well, but I don't want to inadvertently break any rules. We are keeping records of all payments and so on, and I guess we could:

1 Record sister's payment of debt once she's paid off
2 Transfer ownership of car (with value of 9k or whatever recorded as a credit on the records we are keeping)
3 When we get probate, pay sister back, then she owes me 4.5k i.e. half of car

Would welcome some advice, thanks in advance.

Yorkshireman99

apb1 wrote: »

My mother died recently and I am an executor named in the will with my sister and my partner.

We are currently sorting out all the IHT and Probate Forms. There won't be any inheritance tax as the estate is sizeable (or it seems it to me!) but under the threshold once all the extras are added relating to deceased spouse and property etc.

My specific question is about mum's car. She had an agreement with Toyota finance with about 5.5k outstanding on it. The car is worth about 9k. My sister wants to buy it and is keen to do so now. Is it ok for her to pay the finance company off and take ownership of the car? Or are we supposed to wait for probate as technically it's a debt to the finance company? I have no problem with her doing this, we are close and get on well, but I don't want to inadvertently break any rules. We are keeping records of all payments and so on, and I guess we could:

1 Record sister's payment of debt once she's paid off
2 Transfer ownership of car (with value of 9k or whatever recorded as a credit on the records we are keeping)
3 When we get probate, pay sister back, then she owes me 4.5k i.e. half of car

Would welcome some advice, thanks in advance.

As long as your sister pays the full costs there should be no problem.

Keep_pedalling

There would only really be a problem, if the estate was insolvent with more than one creditor involved.

apb1

Thanks both. So all I have to do is keep a record (and she keeps the receipt of course). Does it mean she can take ownership before we get probate, i.e. pretty much now?

Keep_pedalling

apb1 wrote: »

Thanks both. So all I have to do is keep a record (and she keeps the receipt of course). Does it mean she can take ownership before we get probate, i.e. pretty much now?

Yes, in fact it would be better to have the car registered to her her rather than leave it in limbo, where the estate could run into problems for not taxing it or SORNing it.

maximumgardener

From what you say, you and your sister are executors and (presumably) the sole beneficiaries of your late mothers estate?
so ...you certainly sound as if you have this query well covered.

One thought...you could ask Toyota Finance for "options" , as they do have a financial interest in the vehicle. Take it vehicle is on HP plan (rather than PCP) ?

100% agree that as long as full value of vehicle appears in estate accounts .....you can manage the balance payment situation to suit you and your sister ( keep receipts etc)