widow needs DIY probate help re insolvent estate

JoMSE

Hello, My husband ( formerly self employed and retired) died after a period in care with dementia.
I have been doing the probate myself and have received the Grant of probate.  There is only a few thousand in the bank, no property, no anything else.  He had been paying back a Working Tax Credit overpayment to DWP and there will be a payment to the Council due for his last month of care. I understand I can get payment of funeral costs.   I am also retired and on Pension Credit. I have tried to get answers to several questions from citizens Advice, Age Uk and several free legal services but they either don't answer specific questions or are oversubscribed or have lost funding.  So, please can anyone answer the following?      Is putting a notice in The Gazette a good idea? Should I also get a box number to avoid giving out my address? Are these expenses recoverable? The estate will not have enough to pay
both DWP and the Council.  Who decides who gets what?  How long do I have to finish the process?  Any help appreciated. Thank you

Flugelhorn

re the Gazette - my understanding is that this only protects the executor from any claims from creditors but does not protect the beneficiaries - and you are both exec and beneficiary. You probably also know the finances well and hence probably no risk of there being any unknown debts

sourcrates

Moved to more appropriate board.

Keep_pedalling

The best option with insolvent estates is to walk away and not administer them. As he had no significant assets probate will not be required, have you actually applied for it? If you have you can no longer take the simple route outlined below. 

If you have not applied for probate and not touched any of his bank accounts then you need to do the following. If you have not done so already inform the bank of his death via their bereavement department, this will freeze his account, but you can still arrange for the funeral director’s invoice to be paid directly by the bank. 

Write to all the creditors you are aware of inform them of his death (include a copy of the death certificate) and tell them that the estate is insolvent and that no one is administrating it. Don't place a notice in the gazette. 

The first call on an estate is secured debt, which is not applicable here. Second is funeral costs, then unsecured debt and finally beneficiaries if anything is left. If there is not enough to pay unsecured debt then the creditors need to be paid on a pro rata basis. Get this wrong and the administrator can become responsible for the debt which is why the normal advice is not to administer the estate.

If it is too late to do that let us know and we will try to advise you as best we can. I think this thread is better placed in the deaths, funerals and probate board so I will ask the mods to move it. 

Savvy_Sue

Do you have a local Law Centre? Or have you tried Citizens Advice?
The answer to the 'who gets what' question is not necessarily straightforward. Don't rush to pay either: if you receive pressing 'reminders' about the debts I'd reply with a holding response that the estate is insolvent and priority of payments will take time to establish. 

Do you own or rent your house? (Now noted that OP says no property, so my question is irrelevant in this situation.)

And I'm sorry for your loss.

JGB1955

Keep_pedalling said:

The best option with insolvent estates is to walk away and not administer them. As he had no significant assets probate will not be required, have you actually applied for it? I

If it is too late to do that let us know and we will try to advise you as best we can. I think this thread is better placed in the deaths, funerals and probate board so I will ask the mods to move it. 

The OP has already said that she has obtained probate.....

Keep_pedalling

JGB1955 said:

Keep_pedalling said:

The best option with insolvent estates is to walk away and not administer them. As he had no significant assets probate will not be required, have you actually applied for it? I

If it is too late to do that let us know and we will try to advise you as best we can. I think this thread is better placed in the deaths, funerals and probate board so I will ask the mods to move it. 

The OP has already said that she has obtained probate.....

Sorry, I miss read the opening post.

That makes things more complicated as she now has no choice but to deal with the creditors.

@joeMSE can you give us the gross and net numbers you used on the probate application and a breakdown of how much is owed to each creditor plus funeral costs please?

Savvy_Sue

Keep_pedalling said:

JGB1955 said:

Keep_pedalling said:

The best option with insolvent estates is to walk away and not administer them. As he had no significant assets probate will not be required, have you actually applied for it? I

If it is too late to do that let us know and we will try to advise you as best we can. I think this thread is better placed in the deaths, funerals and probate board so I will ask the mods to move it. 

The OP has already said that she has obtained probate.....

Sorry, I miss read the opening post.

That makes things more complicated as she now has no choice but to deal with the creditors.

@joeMSE can you give us the gross and net numbers you used on the probate application and a breakdown of how much is owed to each creditor plus funeral costs please?

And I missed in the opening post that there was no property. 

JoMSE

Thank you all for your comments. 
It seems I should have started here rather than going straight to government sites.
I am still pursuing free legal advice but have been rather surprised to find how decimated these services now are.
Both Citizens Advice and age UK used to do occasional afternoons for drop in legal advice but have lost funding.  
Numbers I've been given for legal services are oversubscribed and not taking new queries. So all advice appreciated.

I have grant of probate which lists estate gross value as £2641 and net value as 0.  Was told there is no negative 
value. 

Funeral Expenses - £1299  (my husband requested cremation only , family abroad)
DWP -  £5008    ( final repayment of Working Tax Credit overpayment he'd been repaying and querying for years) 
Council - £1126  (last payment for care home - much appreciated when he needed 24/7 care for his last year.

My daughter paid the funeral costs but I need to pay her back.

My next step was going to be placing a notice in the Gazette .  I don't believe there are any debts I don't know about as I've been handling his accounts for the past couple of years.  As Flugelhorn noted, I am both the executor and beneficiary, so I am not protected by the Gazette notice even though I'm not benefitting in any way.  I closed his account and opened a separate one.

So, is my next step to reimburse my daughter for funeral expenses ?
Both remaining debts are government. What's my next step to work out who get's what?

I'm assuming this is pretty basic stuff.  If I were to pay for an hour with a lawyer, is that a probate expense I can claim?  Anything else I should watch out for?

Thank you again.
  




    

Keep_pedalling

The first stage  is to place a notice in the Gazette and inform both creditors that the estate is insolvent and that you are waiting to find out if there are any other creditors before distributing what little there is.

If no creditors crawl out of the woodwork after two months then you can distribute what is left after funeral costs and all other estate expenses (including the gazette notice)  to the DWP and the LA on a pro rata basis. (I calculate this as 81.64% for the DWP and the rest for the LA). If another creditor appears during the 2 moths then you have to adjust those pro rate percentages accordingly.

If another creditor approaches you after the two months you simply tell them that the estate was insolvent and that there is nothing to distribute.  The gazette notice covers you for this as executor and they can’t chase beneficiaries because there are none. 

Having said that the gross value of this estate would in most cases not cover the funeral and other administration costs. If those the total costs are approaching the gross value then you simply write to the creditors and tell them that  all estate assets have been used up on funeral and estate expenses so there is nothing left to distribute to creditors. 

user1977

JoMSE said:

If I were to pay for an hour with a lawyer, is that a probate expense I can claim? 

I don't think an hour with a solicitor will tell you more than the basics which are already here, it's just a question of doing the sums of what the estate comprises and apportioning that among the debtors. It doesn't sound like any debts are big enough for creditors to make a big deal about (though you might get some pressure to repay them in full, which you can ignore if you've done your sums properly).