Sorting out debts after death

getmore4less

Shelldean said:

Keep_pedalling said:

beavere38 said:

At the moment I believe there will be enough in the estate to cover it. I found out there is a life assurance policy with a named benefactor and I am told this goes to the benefactor not into the pot. There is also a pension with a named benefactor and again this does not go into the pot. Is this right? I thought debtors were the priority to get paid before anybody else gets anything?

Insurance policies written in trust and some pension payments do not form part of the estate so creditors cannot claim from them.

There is a pecking order ofwho gets what from estate assets

1 Secured debt creditors
2 Funeral Costs
3.Unsecured debt creditors
4. Beneficiaries 

I thought the funeral debt took first priority???

Only on estate assets.
The estate only gets what's left from assets used for security. 
Eg. a house with a mortgage,
 only the equity belongs to the estate not the house. 

Keep_pedalling

Shelldean said:

Keep_pedalling said:

beavere38 said:

At the moment I believe there will be enough in the estate to cover it. I found out there is a life assurance policy with a named benefactor and I am told this goes to the benefactor not into the pot. There is also a pension with a named benefactor and again this does not go into the pot. Is this right? I thought debtors were the priority to get paid before anybody else gets anything?

Insurance policies written in trust and some pension payments do not form part of the estate so creditors cannot claim from them.

There is a pecking order ofwho gets what from estate assets

1 Secured debt creditors
2 Funeral Costs
3.Unsecured debt creditors
4. Beneficiaries 

I thought the funeral debt took first priority???

Not on assets that have a charge on them e.g. a mortgaged house. 

xylophone

I found out there is a life assurance policy with a named benefactor and I am told this goes to the benefactor not into the pot. There is also a pension with a named benefactor and again this does not go into the pot. Is this right? I thought debtors were the priority to get paid before anybody else gets anything?

A named "beneficiary" - a benefactor gives and a beneficiary receives.

Policies written in trust fall outside the estate and as pension  death benefits  are  paid at the discretion of the Trustees of the Scheme these too fall outside the estate.

https://www.moneywise.co.uk/pensions/retirement/why-you-need-will-your-pension

https://www.confused.com/life-insurance/guides/writing-life-insurance-in-trust