Deceased owes Money

Shunna

My Mum-In-Law passed away recently and I am the Executor, she leaves behind 2 Daughters, one of which is my wife, she has approx 9k in the bank but has numerous credit cards with approx 6k on each of them. Being the executor, do I need to inform the credit card company that we can make some payment towards the debt but not all of it, we need to keep some money back for funeral costs?
OR
Do the credit card companies write the debt off?

Thanks

Yorkshireman99

Shunna wrote: »

My Mum-In-Law passed away recently and I am the Executor, she leaves behind 2 Daughters, one of which is my wife, she has approx 9k in the bank but has numerous credit cards with approx 6k on each of them. Being the executor, do I need to inform the credit card company that we can make some payment towards the debt but not all of it, we need to keep some money back for funeral costs?
OR
Do the credit card companies write the debt off?

Thanks

As executor you are legally responsible. If the estate is insolvent decline to act and do nothing otherwise you could be personally for the debts. Ŷou really should be very cautious.

Keep_pedalling

Does she have any other assets?

konark

..........like a property?

unforeseen

Funeral costs are a priority and come above other debts so should be dealt with before offering the cc companies anything. Just inform them that their customer has died and you will be in touch in due course. Do not mention how much is in the estate at this time.

Savvy_Sue

unforeseen wrote: »

Funeral costs are a priority and come above other debts so should be dealt with before offering the cc companies anything. Just inform them that their customer has died and you will be in touch in due course. Do not mention how much is in the estate at this time.

Problems may arise if there are more debts than just the credit cards, and not enough to cover the basic funeral costs. It really is important to tread carefully.

AnotherJoe

People often state here that by getting involved in an insolvent estate they risk becoming liable for all the debts but is there actually any evidence for that ? If for example a solicitor started the process of probate and only through the process of investigating the deceased's affairs worked out they were insolvent, I feel sure they wouldn't be liable, so why would a non solicitor?
Many of us here have begun probate thinking it's normal with a surplus, is anyone seriously suggesting that if for example you discovered a large debt that wiped that out, you'd immediately become liable?
Something doesn't seem right.
Can anyone point to an actual instance of this happening, one that isn't a real left field example, just a normal "deceased owes £20k and has £10k assets" or "found mum had mortgaged the house before she died and spent all the money" type.

Yorkshireman99

AnotherJoe wrote: »

People often state here that by getting involved in an insolvent estate they risk becoming liable for all the debts but is there actually any evidence for that ? If for example a solicitor started the process of probate and only through the process of investigating the deceased's affairs worked out they were insolvent, I feel sure they wouldn't be liable, so why would a non solicitor?
Many of us here have begun probate thinking it's normal with a surplus, is anyone seriously suggesting that if for example you discovered a large debt that wiped that out, you'd immediately become liable?
Something doesn't seem right.
Can anyone point to an actual instance of this happening, one that isn't a real left field example, just a normal "deceased owes £20k and has £10k assets" or "found mum had mortgaged the house before she died and spent all the money" type.

If you get involved in the admin of an insolvent estate, known as intermeddling, you CAN be liable. Executors can take out inranceagainst this. Nevertheless nobody prudent will do the job. The risk IS very real.

Owain_Moneysaver

AnotherJoe wrote: »

People often state here that by getting involved in an insolvent estate they risk becoming liable for all the debts but is there actually any evidence for that ? If for example a solicitor started the process of probate and only through the process of investigating the deceased's affairs worked out they were insolvent, I feel sure they wouldn't be liable, so why would a non solicitor?

Because a solicitor would (a) not pay out any money to anyone until he was sure of the extent of liabilities (b) has professional indemnity insurance to cover him if he does become liable.

Owain_Moneysaver

Shunna wrote: »

My Mum-In-Law passed away recently and I am the Executor, she leaves behind 2 Daughters, one of which is my wife, she has approx 9k in the bank but has numerous credit cards with approx 6k on each of them. Being the executor, do I need to inform the credit card company that we can make some payment towards the debt but not all of it, we need to keep some money back for funeral costs?

NO.

As Executor you are NOT allowed to give preference to one creditor over another (other than as laid down in law, eg limited funeral expenses).

If you pay money out to one beneficiary/creditor when there is a claim by another creditor, the executor can become personally liable.

If the estate is insolvent and you intend to execute it, you must take professional advice.

Where an estate is insolvent, there are legal rules setting down an order of priority for how the costs and liabilities of the estate should be paid and, in particular, which creditors should receive what. If you act as an Executor of an insolvent estate and distribute the cash available in the wrong way you can become personally liable to the creditors who lose out.

https://lcf.co.uk/insolvent-estate/

The rules of bankruptcy apply to insolvent estates, in that groups of creditors must be paid in a specific order of priority.

If the executor or administrator dealing with the estate distributes funds incorrectly, or without realising that specific rules apply to insolvent estates, they may become personally liable for all misdirected monies.

https://www.begbies-traynorgroup.com/articles/insolvency/what-is-an-insolvent-estate

AnotherJoe

Yorkshireman99 wrote: »

If you get involved in the admin of an insolvent estate, known as intermeddling, you CAN be liable. Executors can take out insurance against this. Nevertheless nobody prudent will do the job. The risk IS very real.

So no examples then? I'm starting to think this is overblown. Or just take out insurance. How otherwise can they, for example get into the house to remove personal effects, maybe of trivial cash value but highly sentimental value or to investigate to see if indeed the deceased has £100k under the mattress?



How would you advise OP pays the funeral? Would taking money out of one of the deceased bank accounts to pay be intermeddling ?