Debts after death

notyet

Hello all. My partner recently passed in a sudden accident. I discovered he had no life insurance and no will all too late (seriously people, get these in place!). At the time of his death I notified Tesco Bank as he had a personal loan and credit card with them. I asked if they needed the Direct Debit changed to my name to make the repayments, and was told I did not need to pay anything. 4 months on  and I have received letters from Tesco Bank advising collection agency require payment from his estate. He had no savings, was in receipt of universal credit due to ill-health. There were 2 frozen pension schemes that still have not confirmed if there is any money payable to his dependants (2 children under 16). Can they claim payment from those pension pots?

Silvertabby

My sympathies to you all.

It depends on the pension schemes, but it is more than likely that any monies/benefits will go straight to his beneficiaries and so will not form part of his estate.  ie, can't be claimed by Tesco. 

If you haven't yet done so, advise the collection agency that your partner died insolvent and that no-one is dealing with his estate.  Doing this won't stop you from making funeral arrangements, as that is a contract between you and the funeral director. 

ADD:  According to your last post, you have a mortgage.  Is that still the case and, if so, how is the house owned? 

getmore4less

What was his property status?

Any assets like a car?

Keep_pedalling

You say your partner, but in a previous thread you called him your husband, which is it? In another thread you say my, rather than our mortgage, so is the house solely in your name? If joint names do you know if ownership is as joint tenants or tenants in common?

notyet

The house was jointly owned, 51% mine for legal reasons. After his death it is solely in my name, on a mortgage. My husband had no savings, no car, no material assets.

p00hsticks

notyet said:

The house was jointly owned, 51% mine for legal reasons. After his death it is solely in my name, on a mortgage. My husband had no savings, no car, no material assets.

I'm no expert, but thought that to own a house in unequal proportions it would have to be owned as tenants in common rather than joint tenants ? and if so, then you husbands 49% would form part of his estate ?

doodling

Hi,

Comments:

1. From what you have said your husband owned 49% of the house.  Presumably that meant that you owned in as Tenants in Common rather than as Joint Tenants - please confirm?
2. Given that you state you now own the house then it suggests that either the house was owned as Joint Tenants (in which case the 51/49% split is highly unusual) or the house was owned as Tenants in Common and the Administrator of the estate has transferred ownership of his portion to you - which of these is the case?
3. Did anyone become Administrator of his estate (i.e. obtain Letters of Administration (probate for people without wills))?
4. If the house was owned as Joint Tenants then you now own all of it.
5. If the house was owned as Tenants in Common then the ownership of his portion of the house is determined by the laws of intestacy which vary depending on where in the UK you live and the value of his share of the house.  You are likely to end up with most of his share, but not necessarily all (e.g. his children might get part).
6. If the house was owned as tenants in Common then who had the mortgage and if it wasn't joint, how was it agreed (if at all) that the shares would vary according to the size of the mortgage?
7. Unless the 49% share of the house minus any deduction as a result of the mortgage is less then the sum of the debts then his estate was solvent at death.
8. If the estate was solvent then the debts should in theory be paid.
9. (8) above says "in theory" because if you held the house as Joint Tenants (and now own it completely) then whilst the debts should be paid, there is a five year time limit for creditors to apply to a court to have the debts set against the value of his portion of the house (i.e. force you to pay).  If the debts are small (<£1000) then most creditors won't bother with the necessary court costs (more significant than a simple CCJ) whilst if they are large (>£10000) then they might.
10. If you held the house as Tenants In Common then someone will need to obtain Letters of Administration to change the ownership of his portion of the house.  The Administrator needs to deal with those debts and ultimately the money would need to come from you (because otherwise the money would need to come from selling the house to turn his portion into cash).
11. In both cases note that you are highly unlikely to lose the house, the worst case would be a charging order against the house for the value of the debts, to be paid whenever it is eventually sold.
12. To answer your specific question about the pensions, no, creditors would not be directly entitled to the money from the pensions.  If the money goes directly to children then there is no way the creditors (or you!) can get their hands on it.  If the money goes to you then it may be prudent for you to consider all the points above and work out whether you choose to use that money to settle the debts.

Hope the above helps.

getmore4less

10.  If you held the house as Tenants In Common then someone will need to obtain Letters of Administration to change the ownership of his portion of the house.  The Administrator needs to deal with those debts and ultimately the money would need to come from you (because otherwise the money would need to come from selling the house to turn his portion into cash).

As long as there is a surviving owners a grant is not needed to deals with the property, 

Common misunderstanding but has been clarified by the land registry that  do not need a grant of a deceased owner if there are surviving ones.

doodling

Hi,

getmore4less said:

10.  If you held the house as Tenants In Common then someone will need to obtain Letters of Administration to change the ownership of his portion of the house.  The Administrator needs to deal with those debts and ultimately the money would need to come from you (because otherwise the money would need to come from selling the house to turn his portion into cash).

As long as there is a surviving owners a grant is not needed to deals with the property, 

Common misunderstanding but has been clarified by the land registry that  do not need a grant of a deceased owner if there are surviving ones.

This is not relevant to the OP, but:

Whilst that is consistent with the wording of the usual Tenants in Common restriction, noting the reference to capital money:

No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court.

It feels like something which should lead to Tenants insisting on a different wording which does require an Executor or Administrator in the case where their wills do not leave everything to the remaining Tenant.  I'm surprised that there isn't already an alternative form of wording (perhaps omitting the reference to capital money) to cater for that.