Death and debt

Edinburghsaver

My younger brother died last week - he was only 28 and it was unexpected. My mum and I are now in the process of sorting out his affairs, and now have the death certificate.

We are aware that my brother had no will, no real value in his estate, and had debt that was being managed by a Individual Voluntary Agreement. We have cleared out his flat (rented) and found a lot of paperwork and want to start telling the people he owed money to of his death. We are also in the process of redirecting his mail.

I wanted to find out if folk thought it was worth employing a solicitor considering that he had nothing of value in the estate and existing debts to pay? Also, do we need to wait for the Grant of Letters of Administration before we contact his IVA administrators and the other people he owed money to? We are planning on handing back the keys to his rented accommodation today - is there anything else we should do immediately?

GreenQueen

I'm so sorry for your loss. It must have knocked you sideways, and not knowing where to turn.

Afraid I don't have any advice, but couldn't just cut and run.

Mojisola

Edinburghsaver wrote: »

My younger brother died last week - he was only 28 and it was unexpected. My mum and I are now in the process of sorting out his affairs, and now have the death certificate.

We are aware that my brother had no will, no real value in his estate, and had debt that was being managed by a Individual Voluntary Agreement. We have cleared out his flat (rented) and found a lot of paperwork and want to start telling the people he owed money to of his death.

As the estate is insolvent, you shouldn't do anything at all.

If you want to inform the people he owed money to, you can send a photocopy of his death certificate (don't pay out for official copies) with a letter saying that no-one is dealing with the estate. Either don't give your own contact details or say that you will not respond to any correspondence.

TonyMMM

Sorry for your loss.

If he had nothing of value, then there is no estate to administer and no need for a solicitor or letters of administration.

You should limit any contact with debtors who attempt to claim anything to a simple letter informing them of his death and telling them that there no estate, and make it clear you are NOT acting as the administrator.

Any debt he may have had in his sole name is not payable by you or any other family member - despite what some companies may try and tell you.

Edinburghsaver

Thanks for the condolences and advice. We have just found paperwork regarding 3 pensions that my brother had. All appear to be low value and certainly not enough to clear his debts. Would you still advise doing nothing?

Savvy_Sue

Pensions, it depends. If there is a named beneficiary then the money might pass OUTSIDE the estate, and they could claim it. If not enough to clear the debts, you don't want to claim if that's not the case.

getmore4less

I would not do anything yet but inform the IVA practitioner let them deal with creditors.

You can move and collect possessions for save keeping if needed.

xylophone

You should check with the pension administrators whether any payment is made to a beneficiary outside the estate.

https://www.litrg.org.uk/tax-guides/bereavement/what-happens-pension-funds-when-someone-dies

fatbelly

getmore4less wrote: »

I would not do anything yet but inform the IVA practitioner let them deal with creditors.

This is correct. You should do this straight away. This is one IP's guidance:

https://www.payplan.com/iva/ivas-after-death/

TBagpuss

The reason people are advising you to do nothing is that if you get involved (known as 'intermeddling' with the estate, you can find yourself liable for the debt, as there are very strict rules about how you use any funds, and what order you pay debts, and if you get it wrong you can end up being personally liable instead.
Let your brother's IVA practitioner know what has happened, and pass any paperwork to them. If you want, you can send a letter to any creditor to let them know that your brother has died, that you are not dealing with the estate and that you understand that the estate is insolvent.

Hopefully, they will leave you aloe but unfortunately some may try to claim that you, or your mum, are liable. You aren't, don't believe them.

With regard to the pensions, they may pass outside the estate, but if not then I would suggest that yo pass the details on to the IP and let them deal with it. The creditors can fight it out between themselves and the pension companies.

I'm very sorry for your loss.

Malthusian

Savvy_Sue wrote: »

Pensions, it depends. If there is a named beneficiary then the money might pass OUTSIDE the estate, and they could claim it. If not enough to clear the debts, you don't want to claim if that's not the case.

Payment is at the trustees' absolute discretion and they don't need the deceased to have named a beneficiary to pay it somewhere other than the estate.

The OP should contact all three pension companies with a copy of the death certificate and inform them a) that their brother had no dependents and his mother and brother are his closest living relatives, b) that they would like to be considered for any payment of death benefits (if they would), and c) that his estate is insolvent so any payment of death benefits to his estate will go to his creditors. This is not intermeddling as pensions sit outside the estate.