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    • kangoora
    • By kangoora 9th Feb 18, 10:58 PM
    • 552Posts
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    kangoora
    Query on insolvent estate
    • #1
    • 9th Feb 18, 10:58 PM
    Query on insolvent estate 9th Feb 18 at 10:58 PM
    Hi, this is more of a general query as I'm curious. I see a lot of advice about the dangers of intermeddling in an insolvent estate.

    1. If the executor thinks the estate is insolvent and then washes their hands of it who then deals with the estate in terms of closing bank accounts, recovering any money owed, settling bills, disposals of any assets etc?

    2. As a follow on, what happens should the estate turn out not to be insolvent at a later date. Say, for example, there was a bank account uncovered that was unkown to the executor containing say, 20k (or valuable assets, antiques etc). Can this even happen or how do any beneficiaries get this money with the executor not acting in their role?
Page 1
    • konark
    • By konark 9th Feb 18, 11:58 PM
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    konark
    • #2
    • 9th Feb 18, 11:58 PM
    • #2
    • 9th Feb 18, 11:58 PM
    1. No-one deals with the estate unless one of the creditors thinks they may get a few pennies to the pound and takes over as administrator.

    2. The original executor can then deal with the estate but must pay all known creditors before any distribution.
    • Sea Shell
    • By Sea Shell 10th Feb 18, 7:39 AM
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    Sea Shell
    • #3
    • 10th Feb 18, 7:39 AM
    • #3
    • 10th Feb 18, 7:39 AM
    Good question OP. What I can't get my head around, is how far you are allowed to go in ascertaining IF an estate is solvent or not, WITHOUT it being classed as Intermeddling??

    Also, if it is found to be insolvent....what you are able to do with any of the personal possessions of the deceased - especially those of no monetary value to anyone. But what of family hair-looms (wedding rings etc), which may have some value, but you'd hate to see "sold off".

    Example. Person of State Pension age (only income), lives alone in an owned home (but Joint Tenants), has minimal savings, but maybe owes money e.g. Credit Cards, Loans, 0% finance etc. Has some jewellry and other personal items that might be worth a couple of hundred.

    Home would pass automatically to co-owner.....then what!!!!??
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • Margot123
    • By Margot123 10th Feb 18, 9:12 AM
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    Margot123
    • #4
    • 10th Feb 18, 9:12 AM
    • #4
    • 10th Feb 18, 9:12 AM
    If anyone is concerned about intermeddling, then they shouldn't even consider doing anything at all.

    I guess the only reason someone would be curious is if they thought there might be something by way of an inheritance due. However they would then be treading on dangerous ground if they attempted to make any enquiries.

    In that situation, it would be best to leave it to any creditors to sort, and feel themselves lucky if there's anything left over.
    • Yorkshireman99
    • By Yorkshireman99 10th Feb 18, 12:32 PM
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    Yorkshireman99
    • #5
    • 10th Feb 18, 12:32 PM
    • #5
    • 10th Feb 18, 12:32 PM
    Good question OP. What I can't get my head around, is how far you are allowed to go in ascertaining IF an estate is solvent or not, WITHOUT it being classed as Intermeddling??

    Also, if it is found to be insolvent....what you are able to do with any of the personal possessions of the deceased - especially those of no monetary value to anyone. But what of family hair-looms (wedding rings etc), which may have some value, but you'd hate to see "sold off".

    Example. Person of State Pension age (only income), lives alone in an owned home (but Joint Tenants), has minimal savings, but maybe owes money e.g. Credit Cards, Loans, 0% finance etc. Has some jewellry and other personal items that might be worth a couple of hundred.

    Home would pass automatically to co-owner.....then what!!!!??
    Originally posted by Sea Shell
    In those circumstances just tell any creditors that the estate is insolvent and that nobody is administering the estate. In a strict legal sense any jewelry should be sold and used to contribute to the debts but that would be intermeddling. In practicee just forget about the items. A creditor would only choose to administer the estate in very unusual circumstances. Just making enquiries is not intermeddling.
    Last edited by Yorkshireman99; 10-02-2018 at 4:51 PM.
    • getmore4less
    • By getmore4less 10th Feb 18, 2:26 PM
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    getmore4less
    • #6
    • 10th Feb 18, 2:26 PM
    • #6
    • 10th Feb 18, 2:26 PM
    Some get involved not for the money but for the moral responsibility.

    Eg. a parent that wants bury a child.

    There are a few things that are not classed as intermeddling(case law) for beneficiaries & others people,

    For named executors it is less clear as even notifying of the death could be classed as an executor duty so for them bet to keep well clear till they have renounced the executor role.

    if any doubt keep away, research and take advice before doing anything.

    Humanitarian actions are OK(Like taking in a pet)
    Organising and paying for a funeral
    Securing property/assets that can include things like moving physical assets for safekeeping, insurance, locks, essential repairs.
    Notifying people & institutions of the death
    Making enquiries.

    With the latter two you need to be careful with the wording to avoid them being interpreted that you are acting as an administrator.

    Paying any debt, collecting in an asset or running a bussines is intermeddling.

    It can be very easy for the unaware to cross the boundary and get drawn in, some institutions can be very devious and even lie to get people to admit they will be administrator.

    In the real world no one official polices intermeddling which means backing off/out after doing anything
    • konark
    • By konark 11th Feb 18, 1:17 AM
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    • #7
    • 11th Feb 18, 1:17 AM
    • #7
    • 11th Feb 18, 1:17 AM
    Generally as long as you don't attempt to take assets from the estate or distribute to beneficiaries you will not be deemed to have intermeddled.

    In response to Seashell's query, if someone with a joint ownership of a property died insolvent the creditors COULD make a claim against their portion of the house, but it is a complicated legal process and for smaller amounts they would probably just write them off.
    • Sea Shell
    • By Sea Shell 11th Feb 18, 7:28 AM
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    Sea Shell
    • #8
    • 11th Feb 18, 7:28 AM
    • #8
    • 11th Feb 18, 7:28 AM
    In response to Seashell's query, if someone with a joint ownership of a property died insolvent the creditors COULD make a claim against their portion of the house, but it is a complicated legal process and for smaller amounts they would probably just write them off.
    Originally posted by konark
    Is that true!!? I thought that homes owned as Joint Tenants passed automatically to the other owner on the death of the first, and therefore never form part of their estate. If its not IN the estate then how can creditors pursue the money.

    Do you have any links to cases where this has happened? Thanks
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • Keep pedalling
    • By Keep pedalling 11th Feb 18, 9:16 AM
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    Keep pedalling
    • #9
    • 11th Feb 18, 9:16 AM
    • #9
    • 11th Feb 18, 9:16 AM
    Is that true!!? I thought that homes owned as Joint Tenants passed automatically to the other owner on the death of the first, and therefore never form part of their estate. If its not IN the estate then how can creditors pursue the money.

    Do you have any links to cases where this has happened? Thanks
    Originally posted by Sea Shell
    Yes, it is true a creditor can apply to the court to retrieve the dept from the surviving owner of the property in effect splitting the joint tenancy.

    They can do this under section 421A of the insolvency act 1986.

    http://www.legislation.gov.uk/ukpga/1986/45/section/421A

    This is an expensive process so is only likely to happen where a large dept is involved.
    • Sea Shell
    • By Sea Shell 11th Feb 18, 9:43 AM
    • 679 Posts
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    Sea Shell
    Thanks. Learn something every day!!
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
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