At My Wits End

Mackhie

My mother passed away recently. She had no will, and according to what I have looked up the 'estate' (if you can even call it that) was so small that I didn't even need Probate or Letters of Administration. All she had was about £2,500 in her bank accounts, and life assurance policies which amounted to a total of about £7,500. Her bungalow was rented and she lived alone, so she had no 'property'.

Her creditors were numerous. I have written to all of them (as far as I know). Some have responded, asking for repayment, others have said that "the matter is being processed and I will hear from them shortly".

I have already deducted funeral costs and such-like from the value of her estate. The creditors probably amount to £10,000-£12,000 (or possibly more) in total. To top it all, my brother, who originally stated that he was happy for me to deal with the estate, yet after the funeral began making all kinds of accusations of fraud on my part. The messages I received were quite abusive. In the end, I contacted the police, who assured me I had done everything correctly, and made a note of the incidents, although due to the wording of his messages would be difficult to prove as criminal harassment.

I am also receiving conflicting advice. Several people have said that "her debts die with her" and that the money from the life assurance shouldn't be used to pay her creditors as this goes to her beneficiaries (me and my brother). Other organisations have not indicated contrary to this when asked directly, but have implied that life assurance counts as part of the estate. The creditors are making out that I am liable to pay them out of her estate, and insurance payouts (i.e. life assurance) count as part of the estate.

The only other thing I have found is that I should post in the governments Gazette (according to gov.uk) to notify any potential unknown creditors.

I am totally confused. I feel like just handing it all to a solicitor (or to my brother and let him deal with it) and wash my hands of it.

Who is right? Do I pay the creditors as far as I am able out of the bank money and assurance payouts?

Should I spend another £70 posting in the Gazette?

Is there an order of priority for the creditors? (They are mostly finance companies (unsecured), a couple of credit cards, and some small sundry debts (£100 -£200) to utilities and a mail order company.

Any help would be appreciated (though please don;t mention CAB - the waiting times are ridiculous and they would probably just divert me somewhere else anyway).

Silvertabby

My sympathies.

Debts are indeed payable from the estate, but I assume that the funeral cost more more than the £2.5K your mum left in her bank account.

If the proceeds of the insurance policies were paid directly to the named beneficiaries, then they do not form part of the estate.

Based on the information you have given, I would supply each of her creditors with a copy of her death certificate and a letter stating that the estate is insolvent and that no-one is dealing with it.

Some companies will no doubt try to bully you into paying up, and you may even be tempted to use the insurance policies to pay off some of the debts - but please don't do this, as it could be classed as intermeddling, and leave you open to personal demands for repayment of other debts.

As for posting in the Gazette, when my sister (a discharged bankrupt) died insolvent the legal advice I was given was it wasn't necessary, as even if more creditors popped up there was no money to pay them.

I'm sure someone (Yorkshireman?) will pop up and confirm this, and may even be able to supply you with some suitable words for the letters.

Malthusian

You should tell the creditors that the estate is insolvent and nobody is administering it, then walk away.

You should not take any other action as that will be intermeddling. Arranging the funeral isn't classed as intermeddling. Most other things expected of an administrator, e.g. closing bank accounts, placing notices in the Gazette and the like, is.

If you have already intermeddled you will need to see it through to the end, and should contact a solicitor immediately.

The life insurance policies would normally be outside the estate. The beneficiaries do not become liable for the estate's debts. However if the life insurance payouts go into the estate, they will go into the pot to pay creditors, and if the policies have been assigned to a particular creditor, the payout will go directly to that creditor.

Mackhie

Rather concerned that you say "closing bank accounts" means that I have "already intermeddled". If I have, then it is on the advice of the local council (and in a written document!)

I was given a "bereavement pack" by the coroners when they picked my mum up to take her to the hospital pending autopsy. I thought it was from the funeral directors. Turns out it's a local council pack that all the coroners hand out.

In it it had advice and a list of people and organisations to contact, so I followed it practically to the letter. I notified the bank (as instructed) and THEY closed the account and transferred the money onto my account.

As far as creditors go, so far I contacted them, sending them a letter that they were unlikely to get anything (the template of which I took from https://www.nationaldebtline.org/EW/sampleletters/Pages/Write-off-after-death.aspx. They have largely ignored the content of the letter and are still asking for the money.

Mum had a funeral plan, so the cost of the funeral was only £1,290, but there was the cost of the wake, flowers etc on top of this.

-taff

They will ask for the money, it's their last chance to get any. The money from her account paid for her funeral which is fine. There is no money anyhere else, so there's nothing to pay them with. You have not had any dealings with her estate so far so you can quite truthfully say no one is administering it. As for closing the bank account, that money paid for the funeral so.....don't panic mr mainwaring....

Tom99

Mackhie wrote: »

Rather concerned that you say "closing bank accounts" means that I have "already intermeddled". If I have, then it is on the advice of the local council (and in a written document!)

I think it is only executors under a will where intermeddling would prevent them renouncing their role a executor.

unholyangel

Tom99 wrote: »

I think it is only executors under a will where intermeddling would prevent them renouncing their role a executor.

In a nutshell, if you intermeddle in the deceased estate, you become executor de son tort. They have all the liability of an executor but none of the rights of one.

MovingForwards

Tom99 wrote: »

I think it is only executors under a will where intermeddling would prevent them renouncing their role a executor.

No, even without a will people can intermeddle and cause themselves a lot of agro.

http://www.mondaq.com/uk/x/209888/wills+intestacy+estate+planning/What+Not+To+Do+When+Someone+Dies

Mackhie

unholyangel wrote: »

In a nutshell, if you intermeddle in the deceased estate, you become executor de son tort. They have all the liability of an executor but none of the rights of one.

De son tort. : as a result of his own wrong act (I had to Google this)

So, the Bereavement Advice Centre (finances department), the Police and even the solicitors (in a consultation session), who have all told me I have done nothing wrong...are in fact all themselves wrong about this.

I would appreciate it if someone with some real and useful knowledge on this matter would respond....and in plain English. I do not understand financial or legal jargon. No more time-wasters please! This is a serious matter.

Mackhie

MovingForwards wrote: »

No, even without a will people can intermeddle and cause themselves a lot of agro.

http://www.mondaq.com/uk/x/209888/wills+intestacy+estate+planning/What+Not+To+Do+When+Someone+Dies

Oh, and this.....(from the very site you refer to)

"acts which involve dealing with the deceased's assets in a manner which goes further than merely safeguarding them and their value are acts which are likely to be classed as intermeddling."

That's all I have done, merely safeguarded the funds released so far (other than paying funeral costs, and even that could be argued that it came out of my personal funds without touching the estate funds).

In fact, the more I read your little article, the more I am reassured that I have acted properly and done nothing wrong.

getmore4less

Most of the official stuff on dealing with estates tends to ignore the insolvent situation and just assumes someone will administer.

This leaves the novice in a situation where they dive in and can get caught out when the estate is insolvent

In the situation where there are no assets left after funeral expenses anyone that started can back off and wind down communication.

But this estate seem to have some money left which was transfered to your account

That is what probably puts you across the line of intermeddling upto that you were fine.

As there is some money left that leaves a problem as it needs distribution.

As there is not enough to pay the debts it becomes a lot of work for nothing.

Solicitor will probably want assurance that you will pay when(not if) the money runs out.

With no secured debts, funeral, administration expenses there will likely be some left from the £2.5k.
Unlikely there are preferred debts that leaves the rest as all unsecured.

I suspect on £12k debts 10p in the £1 unless you uncover some more.

Where you go from here, I think a solicitor consultation may be worthwhile using some of the money that is left.