advice regarding Phillips and Cohern chasing debts

glosflamingo

Searching around it seems this is a well known company for chasing debts from executors of wills. So was hoping for some advise.


My husband died 18 months ago. I was executor of the will and everything has been sorted. Basically:


1.money in joint account automatically transferred to me and I understand is not counted towards estate
2.money due from pension automatically passed to me and company stated that it was not part of the estate
3.house was in husbands sole name and had outstanding mortgage of 72 on a house valued at 150,000.
I used money due from pension to pay off mortgage, leaving only a few thousand which I used to pay funeral costs.


But now these letters have started to come address to executor (not my name) at the family address where I still reside, claiming that my husband owes just under £5,000.
I have no record of this debt and the letters do not specify who the original debt was with.


So what do I do?


1. ignore and hope they get fed up and go away
2. Write to them asking them to prove original debt, hope they cant and get debt written off
3. just pay up. I gather they can claim that the approx 80,000 equity in the property that was in husbands sole name is classed as forming his estate. Am I correct in this regard?


If 1 and 2 fail and I have to do 3, can they make me sell house as I don't have the money to pay them!

idrankthecoolaid

Not much help to you I am afraid, but they contacted me about two debts owed by one of my parents. One of them had in fact already been paid and they admitted that was the case when I pressed them on it. Whilst I have no doubt they are a reputable company, they don't always get their facts straight.


Hopefully someone else will come along shortly with some more helpful information.

TonyMMM

It would appear that he did have a fairly substantial estate, the value of which you presumably included on the probate application.

As executor - what steps did you take to advertise for creditors to come forward ... notice in the Gazette for example ?

You can (and should) certainly ask for evidence that the debt exists, but if it does then as executor of the estate you will have to deal with it and if you don't want to sell the house that may mean raising funds in some other way.

badmemory

idrankthecoolaid wrote: »

One of them had in fact already been paid and they admitted that was the case when I pressed them on it. Whilst I have no doubt they are a reputable company, they don't always get their facts straight.

To be honest this to me is the very opposite of a reputable company. To "try it on" because you think you can get away with it because the person who used to owe the money has died & maybe the executor may not know it has been repaid is not good.

Keep_pedalling

If the debt is genuine then it will need to be paid. The first thing to do is ask for proof of the debt.

This is really the job of the executor rather than you.

badger09

Keep_pedalling wrote: »

If the debt is genuine then it will need to be paid. The first thing to do is ask for proof of the debt.

This is really the job of the executor rather than you.

Op said she was the executor

glosflamingo wrote: »

Searching around it seems this is a well known company for chasing debts from executors of wills. So was hoping for some advise.


My husband died 18 months ago. I was executor of the will and everything has been sorted. Basically:


1.money in joint account automatically transferred to me and I understand is not counted towards estate
2.money due from pension automatically passed to me and company stated that it was not part of the estate
3.house was in husbands sole name and had outstanding mortgage of 72 on a house valued at 150,000.
I used money due from pension to pay off mortgage, leaving only a few thousand which I used to pay funeral costs.


But now these letters have started to come address to executor (not my name) at the family address where I still reside, claiming that my husband owes just under £5,000.
I have no record of this debt and the letters do not specify who the original debt was with.


So what do I do?


1. ignore and hope they get fed up and go away
2. Write to them asking them to prove original debt, hope they cant and get debt written off
3. just pay up. I gather they can claim that the approx 80,000 equity in the property that was in husbands sole name is classed as forming his estate. Am I correct in this regard?


If 1 and 2 fail and I have to do 3, can they make me sell house as I don't have the money to pay them!

Uxb

TonyMMM wrote: »

As executor - what steps did you take to advertise for creditors to come forward ... notice in the Gazette for example ?

This bit always puzzles me
As I understood it this notice only protects the executor not the residual beneficiaries - despite the notice saying that you have until day x to bring forward proof of your claim.
The implication being by the wording that if you failed to do so then you could not claim.

However I was always told that this is not so and that if there was a debt discovered after that date specified in the Gazette then it is still a valid claim but the claimant would have to go after the residual beneficiar(ies) themselves individually....(and good luck with that!)

So if you are both the executor and the sole beneficiary there is no point in a notice in the Gazette since you not protected in any way at all.

Flugelhorn

That was my understanding too Uxb. I didn't do the gazette bit as was concerned it might encourage some unscrupulous claims and also I was exec and sole beneficiary do liable to anything genuine anyway .

I hope the OP gets this sorted - need to get really good evidence of the debt and to be sure it hasn't been paid already

Savvy_Sue

glosflamingo wrote: »

1.money in joint account automatically transferred to me and I understand is not counted towards estate

I think you're wrong here: yes, the money passes to you, BUT I think half of it still counts as part of his estate unless you can show some other proportion of ownership should be used.

I know I'll be picked up on this if wrong, and it's a few years since I had to do this ... but my memory is that when Dad died we put half the joint account down within his estate, but when Mum died holding a joint account with my brother, we put it all down as part of her estate because although he now had access to that money, he didn't regard it as his and we divvied it up as per the will.

badmemory

Sorry but I do think you are wrong. A joint account becomes the property of the survivor & is not part of the estate. Your brother could have retained all that account & whilst he could have kept it all he did the decent thing but it was not necessary to declare it as part of the estate. I do hope you didn't have to pay any IHT!

getmore4less

badmemory wrote: »

Sorry but I do think you are wrong. A joint account becomes the property of the survivor & is not part of the estate. Your brother could have retained all that account & whilst he could have kept it all he did the decent thing but it was not necessary to declare it as part of the estate. I do hope you didn't have to pay any IHT!

It is possible for a joint accounts to be beneficially owned by ONLY one of the account holders.

There is also a difference between distributable and taxable estates and even where an asset is really a joint asset and it passes by survivorship it is still taxable.

HMRC cover this briefly in their guide for IHT205


https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/730619/IHT206-2011.pdf

Valuing joint bank accounts
Valuing the deceased’s share of a bank account is
quite easy but sometimes an account may be held
in joint names just for convenience. For example,
if an elderly person can no longer get out, they
may add a son’s or daughter’s name to their bank
account so the son or daughter can operate the
account for them.
If an account is in joint names for convenience
and the deceased provided all the money in the
account, you should treat the account as if it
was in the deceased’s sole name. Include the
full balance of the account in box 9.2 (for joint
tenants) or 11.1 (if the account was held as
tenants in common). But the opposite also applies,
and if the deceased did not provide any of the
money in the account and their name was on it
for convenience only, then, so long as the provider
did not intend to make a gift, there is no need to
include anything about the joint account on form
IHT205(2011).