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    • S Baker
    • By S Baker 11th Aug 18, 7:41 PM
    • 4Posts
    • 0Thanks
    S Baker
    probate/IHT/life insurance
    • #1
    • 11th Aug 18, 7:41 PM
    probate/IHT/life insurance 11th Aug 18 at 7:41 PM
    My mum died in February and I am trying to sort out her estate but I am getting so much conflicting information I really donít know what to do.
    There is a will. I am the sole executor and the sole inheritor.
    We owned our house as joint tenants and she lived with me for the last 20 years of her life. I had the house valued by a local agent and it came in at £775,000 but there is still a £165,000 mortgage so the residual value is £610,000 half of which Is £305,000 so under the IHT limit. Is this correct? I have contacted the Land Registry who have removed her name from the title. I do not intend to sell the house as it is my family home. How do I let HMRC know that there is no IHT to pay? Apparently, you have to inform HMRC before 6 months. Is this correct?
    My mum was very ill for the last few years of her life and I bought some life insurance (for me really) to pay the funeral costs. It was £10,000. I paid the premiums and they have paid the insurance money directly to me. I have used this to pay for the funeral (£5000) and to cover some outstanding care bills (£4000) that she had as she needed a lot of care. Does the outstanding £1000 form part of her estate?
    She has a number of credit card debts. One has been paid but there is one outstanding for £4000. There is no money left in her estate. There was about £700 in total in her accounts and saving but I used that to pay the care bills. All of the stuff in the house was jointly owned apart from her clothes (gone to charity) and nothing of any value, not even any jewellery. She had no car or any other item of value.
    How do I deal with all of this? Some people say I need probate but as far as I am concerned all her affairs have been dealt with. I have shut down all her accounts and the property is in my name. I have no other family apart from a very elderly uncle who is currently in and out of hospital with a serious heart condition so I donít like to bother him with this and I donít think he would know the answers anyway. He is not interested in any claim on mumís estate. Why do I need probate? What do I say to the credit card company that is owed £4000? Do I need to pay for this debt? Can they put a charge on the house? I donít have £4000 in my accounts.
    As there is no money in the estate I donít want to pay a solicitor for advice as this would be very expensive. I shall be struggling as it is to run the house alone. I have advertised for a lodger.
    Any help gratefully received. Where can I go to get reliable answers to my questions?
Page 1
    • Yorkshireman99
    • By Yorkshireman99 11th Aug 18, 8:01 PM
    • 4,761 Posts
    • 3,984 Thanks
    Yorkshireman99
    • #2
    • 11th Aug 18, 8:01 PM
    • #2
    • 11th Aug 18, 8:01 PM
    From what you say the estate is insolvent and the standard advice would be just to leave it/ However as you have intermeddled in the estate you cannot avoid your responsibilities as executor. I suggest you see a solicitor PDQ to sort out the mess.
    • Keep pedalling
    • By Keep pedalling 11th Aug 18, 8:30 PM
    • 5,673 Posts
    • 6,461 Thanks
    Keep pedalling
    • #3
    • 11th Aug 18, 8:30 PM
    • #3
    • 11th Aug 18, 8:30 PM
    Under these circumstances you do not need to complete probate, but as YM says you have created a serious problem for yourself by favoring some creditors over others.

    The alternative to taking legal advice is simply to pay off the debts which could be the cheaper option in the long run.

    You are now in a position of being asset rich but cash poor, so I think you should certainly consider downsizing in the very near future, owning a house you can!!!8217;t afford to maintain is not a good position to be in.
    • Marcon
    • By Marcon 11th Aug 18, 9:39 PM
    • 559 Posts
    • 415 Thanks
    Marcon
    • #4
    • 11th Aug 18, 9:39 PM
    • #4
    • 11th Aug 18, 9:39 PM
    My mum died in February and I am trying to sort out her estate but I am getting so much conflicting information I really don!!!8217;t know what to do.
    There is a will. I am the sole executor and the sole inheritor.
    We owned our house as joint tenants and she lived with me for the last 20 years of her life. I had the house valued by a local agent and it came in at £775,000 but there is still a £165,000 mortgage In whose name?so the residual value is £610,000 half of which Is £305,000 so under the IHT limit. Is this correct? See https://www.gov.uk/inheritance-tax/passing-on-homeI have contacted the Land Registry who have removed her name from the title. I do not intend to sell the house as it is my family home. How do I let HMRC know that there is no IHT to pay? Apparently, you have to inform HMRC before 6 months. Is this correct? Not quite. You must pay Inheritance Tax by the end of the sixth month after the person died.
    My mum was very ill for the last few years of her life and I bought some life insurance (for me really) to pay the funeral costs. It was £10,000. I paid the premiums and they have paid the insurance money directly to me. I have used this to pay for the funeral (£5000) and to cover some outstanding care bills (£4000) that she had as she needed a lot of care. Does the outstanding £1000 form part of her estate?Probably not, but you need to check the terms of the policy - if in doubt, ring the insurers and ask them to confirm
    She has a number of credit card debts. One has been paid but there is one outstanding for £4000. There is no money left in her estate. There was about £700 in total in her accounts and saving but I used that to pay the care bills. All of the stuff in the house was jointly owned apart from her clothes (gone to charity) and nothing of any value, not even any jewellery. She had no car or any other item of value.
    How do I deal with all of this? Some people say I need probate but as far as I am concerned all her affairs have been dealt with. I have shut down all her accounts and the property is in my name. I have no other family apart from a very elderly uncle who is currently in and out of hospital with a serious heart condition so I don!!!8217;t like to bother him with this and I don!!!8217;t think he would know the answers anyway. He is not interested in any claim on mum!!!8217;s estate. Why do I need probate? You may need an Insolvency Administration Order rather than probate, given the circumstances you describeWhat do I say to the credit card company that is owed £4000? What have you said to them so far? Presumably you have advised them of your mother's death and the card has not been used since her death?Do I need to pay for this debt?Is the card solely in your mother's name? If it was a joint card, you will be liable for the full debt. If in your mother's name only, you will need to pay some of the debt, but not all if the estate is insolvent. Once someone dies, all unsecured creditors rank equally - but you have chosen to pay off some in full, and they probably aren't about to give you a refund however nicely you ask! Executors are personally liable for ensuring an estate is properly administered in accordance with the law, so you have made yourself personally liable for whatever proportion of £4,000 would have been payable to the credit card company had the net value of the estate been shared out correctly. Can they put a charge on the house?In theory they could, but the reality is that no judge would allow you to be made homeless for such a modest amount, so they'd know they could not enforce it until such time as the house is sold I don!!!8217;t have £4000 in my accounts.
    As there is no money in the estate I don!!!8217;t want to pay a solicitor for advice as this would be very expensive. It could be a lot more expensive if you don't take proper advice based on full information. Reasonable costs for necessary expenditure (and legal advice would fall into this category) can be charged to the estate, which would further reduce the amount payable to the credit card company I shall be struggling as it is to run the house alone. I have advertised for a lodger.
    Any help gratefully received. Where can I go to get reliable answers to my questions?Not a complex estate by the sound of things, so any competent high street solicitor should be able to provide a fixed-fee interview to set you on the right lines/advise you if you need further specialist advice
    Originally posted by S Baker
    Looking at your other questions, you refer to keeping 'horses'. Any chance you could enter into a horse share or similar to free up some cash? I appreciate this may not be what you want - any more than you want to sell your home of many. years - but there will be some difficult decisions to take, made more difficult by the recent loss of your mum.
    Last edited by Marcon; 12-08-2018 at 10:04 AM.
    • Brynsam
    • By Brynsam 12th Aug 18, 1:56 PM
    • 1,740 Posts
    • 1,275 Thanks
    Brynsam
    • #5
    • 12th Aug 18, 1:56 PM
    • #5
    • 12th Aug 18, 1:56 PM
    My mum died in February and I am trying to sort out her estate but I am getting so much conflicting information I really donít know what to do.
    There is a will. I am the sole executor and the sole inheritor.

    As there is no money in the estate I donít want to pay a solicitor for advice as this would be very expensive.
    Originally posted by S Baker
    As an executor, you need to follow the rules - and you've not done that, leaving yourself personally open to claims from unhappy creditors (e.g. the credit card company owed £4,000).

    Whether there is money in the estate or not you need proper legal advice. Saying this would be 'very expensive' invites the response 'not half as expensive as getting it wrong'. Ask for some quotes for initial advice and you may find out that 'very expensive' is nothing like the figure you may be worrying about.

    None of this is easy in the wake of a bereavement, but letting it fester will make it worse - and make you worry more.
    • getmore4less
    • By getmore4less 12th Aug 18, 3:32 PM
    • 33,581 Posts
    • 20,313 Thanks
    getmore4less
    • #6
    • 12th Aug 18, 3:32 PM
    • #6
    • 12th Aug 18, 3:32 PM
    Step back and look at the assets.

    The key will be the life payout is that inside/outside the estate.
    check with the company.

    if that is outside the estate then what was in the distributable estate?
    (if inside then there is enough to make a distribution)

    you said a few hundred and some personal possessions along with 1/2 jointly owned house

    First call on that will be the funeral looks like there is nothing left after that then there is nothing to distribute to the creditors from the estate(with your executors hat on)

    The inventory and account will show no distributable assets.

    If you(with your own hat on) choose to use your own money to pay of any debts that's up to you you don't have to follow any rules

    Bottom line will be will the creditors want any of the house as that involves a lot of hassle for them as they need apply for a court order under s421A Insolvency Act.

    For £4k I can see them just accepting they get nothing.

    Do some reading on insolvent estates(so you have a clue what any solicitor will be talking about) get all your paperwork in order and go see a solicitor for an initial consultation.

    Unless the life money is in the estate I suspect they will say just ask the CC company to write off the debt and come back if they say no.
    • S Baker
    • By S Baker 12th Aug 18, 7:49 PM
    • 4 Posts
    • 0 Thanks
    S Baker
    • #7
    • 12th Aug 18, 7:49 PM
    • #7
    • 12th Aug 18, 7:49 PM
    I can afford to maintain the house in the long run as I retire next year and I have some fairly significant pension income. I have no intention of selling the house until I want to. I may have to take out a loan to pay off all mums debts to get me through the year but the reality is they were her debts solely in her name - not mine! I paid the care company out of the insurance money which technically means my money so not out of the estate but yes I will ring them and check this is the case. The care company that looked after mum in her last years were lovely and I am still friends with them all. They enabled my mum to stay at home as she wished all through her illness and were a great help to me in looking after mum. There is no way that they would not get paid. The credit card company are another matter. The mortgage was in joint names. Does this make a difference? It does not help that I can't access the government gateway as I never get the codes mobile access is very poor here. I thought I had informed all accounts but I found a couple more when I was clearing out her cupboards so I am still waiting for those (<£50) and I found a £3 premium bond bought in 1970 which is apparently now worth (yes you guessed it ) £3. No money form her accounts has been touched but the banks have all paid the money to me directly into my current account so it is all muddled up with my money. Also, we have 2 joint accounts - mostly to pay the care bills so I have a new question - how does the money in the joint accounts count towards the estate? Again very small amounts (<£200). As for entering a horse share that would be like selling my children in a slave market. No thanks. I'll get a lodger to get me through the next year. That will bring in enough and it will all be tax-free. I will however go and see a solicitor as most people seem to advise this. I was very close to my mum and this has all been very difficult and you are right to say go and see someone and not stew on it. Thanks. Sophie
    • getmore4less
    • By getmore4less 12th Aug 18, 8:05 PM
    • 33,581 Posts
    • 20,313 Thanks
    getmore4less
    • #8
    • 12th Aug 18, 8:05 PM
    • #8
    • 12th Aug 18, 8:05 PM
    Mortgage stays with the property.

    Keep meticulous records of cash flow.
    • Keep pedalling
    • By Keep pedalling 12th Aug 18, 8:32 PM
    • 5,673 Posts
    • 6,461 Thanks
    Keep pedalling
    • #9
    • 12th Aug 18, 8:32 PM
    • #9
    • 12th Aug 18, 8:32 PM
    Thanks for the clarification, by the sounds of it your mothers estate had insufficient funds even to pay for the funeral costs, and the small amount of cash in the joint accounts is now yours and does not form part of the estate.

    I can understand why you paid the care company, as in effect they have provided a service to both of you (I know from personal experience that having good carers takes away a lot of the strain of caring for a loved one). If you chose to pay that from your own money I do not see that as intermeddling especially as those fees had been coming out of a joint account before her death.

    Do not contact the CC company until you have received legal advice. The mortgage is now solely your responsibility.
    Last edited by Keep pedalling; 12-08-2018 at 8:36 PM.
    • Brynsam
    • By Brynsam 12th Aug 18, 10:53 PM
    • 1,740 Posts
    • 1,275 Thanks
    Brynsam
    Check the relative costs of taking some of your pension money early v taking out a loan - if you are so close to retirement, it could be a viable option.
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