Bills after death 24 June 2022 at 9:09PM in Deaths, funerals & probate 5 replies 563 views

pete1904

Hi, My mother in law passed away last week and has made me executor. Only got the death certificate  today so haven't been able to do much about contacting  various people. What happens to things like debts to catalogues and bank loans, and also things like rent ( she has shared ownership of home with housing association so paying rent). Do organisations generally freeze payment and interest till estate is settled as her bank account will get frozen. Tia.

[Deleted User]

Normally, yes.

Flugelhorn

Presume there is enough equity in the property to make the estate solvent? ie value of her share of the property greater than the debts
On the whole all organisations accept the fact that the person has died and that they won't get their bills paid until probate is granted and the estate finalised.
Re money in the ban - most banks will handover a  significant amount on sight of death cert and will - It used to be about 20K limit but I think some are much higher. I was exec a few years ago and RBS sorted within 24hrs of me seeing them - having the money made it easier to pay things that wouldn't wait, like gardeners  and carpet cleaners etc 

RAS

Hi, hope you have been able to make some headway, although your priority as a family is supporting those most closely related.

You've probably already started gathering paperwork? It's fairly important that you get some idea of the debts early on. If you're dealing with accruing rent, utilities and small consumer debt, the shared ownership property should cover them. Do check whether she had any life insurance or a pension policy that paid out on death, particularly if she worked within the last ten years? 
 
If MIL had a lot of credit cards and loans, and you think the assets won't cover the debts, you need specialist advice before you do anything other than arrange the funeral.

The funeral directors should send their bill directly to her bank and they will pay out without needing the will or probate. 

Ask the bank's bereavement team what they need to release the funds in the bank account but make sure the estate is solvent before you collect in the money.

You will need probate to sell the shared ownership home, but this recently got a lot easier for estates below the IHT threshold that may well be £500K if MIL left the estate to children, and possibly double that if she was widowed.

You may also want to engage fairly quickly with the housing association regarding the sale of the home. Some have the right to buy back, so you need to know if that's the case or if you are going to sell. If you are going to sell the home, given the accruing rent, you may want to get it on the market as soon as you've applied to probate. That's likely to take 8-14 weeks, perhaps more, you can't exchange until it's granted but shared ownership often take longer to sell.


  

Keep_pedalling

It does not sound like the estate is insolvent unless she has run up very large debts. Banks will pay quite large sums executors before probate is obtained so it may not need to get the funeral director to invoice the bank. 

Assuming the estate is solvent you should write to her creditors informing them of her death. Include a copy of her death certificate and ask for a final statement. Inform them that you need to apply for probate so payment will take a little time.

I am not sure if the HA will suspend the rental payments but you need to engage with them ASAP, it may be that they have first refusal in buying back her share.

TBagpuss

If it is shared ownership then they wouldn't *usually* buy back her share - normally the processis that there are rules about the way the hosue is marketed and they are involved in marketing - often t has to be offered through them for a set period, so it can be made availablto people on ther waiting list, then if not sold within x months can be sold on the open market (although normally the valuation and marketing agents need to be agreed with the HA.) 
I would expect rent to be payable until the hosue is sold,  although they may well allow this to accrue and be paid out of the sale proceeds.