Debts After Death Question

Edrof

Edrof

Edrof

Soldato
Joined
16 Nov 2009
Posts
16,035
Location
UK
Hi all!

I recently lost my dad and am going through his estate. I need help figuring out some (probably) simple things and I've searched online a lot but I'd rather talk about it here.

He leaves (made-up values):

£150,000 house in his name to my mum.
£20,000 pension lump-sum to my mum.
£5,000 life insurance to my mum.

Four credit cards with £10,000 of debts between them.

The card companies change their answer to us, with some saying mum won't have to pay anything. I understand that his debts should be paid from his estate but what of the above counts as estate? Can they force the sale of a house for a couple of thousand pounds?

Many thanks!
 
In theory, the CC card companies can enforce their debts, but no judge is going to kick someone out or their home, unless your mum's got pots of money of course. They'll probably set up a charge against the house, so that when it's eventually sold, they get paid off

As the pension lump sum is relatively small, wouldn't it make sense to cash part of it in and pay off the CCs. There are tax free exemptions for small pensions
 
Whether or not the house will form part of his estate depends on whether your parents are "Joint tenants" or "tenants in common". If they are joint tenants, and own an equal proportion of the house, then the remaining part will pass automatically to your mother and will not form part of his estate. If they are tenants in common then it *will* form part of his estate and this creditors could make a claim against it. Most people are joint tenants, but you say the house is "in his name" - does that mean that he was sole owner of the house? If so, then it would form part of his estate.

The payout from a life insurance policy doesn't form part of his estate - as the money is never his, it's paid straight to the named party.

The pension is hard to say as on a lot of details. If he's already drawn down the lump sum from his pension (i.e. it's cash in a bank account) then it will form part of his estate. If it's still in a pension scheme that has some kind of rules in place to pay out to a named beneficiary on death - then it *probably* doesn't form part of his estate. But you're better off speaking to either the pension providers or an independant financial adviser on that one.
 
Ergates said:
Whether or not the house will form part of his estate depends on whether your parents are "Joint tenants" or "tenants in common". If they are joint tenants, and own an equal proportion of the house, then the remaining part will pass automatically to your mother and will not form part of his estate. If they are tenants in common then it *will* form part of his estate and this creditors could make a claim against it. Most people are joint tenants, but you say the house is "in his name" - does that mean that he was sole owner of the house? If so, then it would form part of his estate.

The payout from a life insurance policy doesn't form part of his estate - as the money is never his, it's paid straight to the named party.

The pension is hard to say as on a lot of details. If he's already drawn down the lump sum from his pension (i.e. it's cash in a bank account) then it will form part of his estate. If it's still in a pension scheme that has some kind of rules in place to pay out to a named beneficiary on death - then it *probably* doesn't form part of his estate. But you're better off speaking to either the pension providers or an independant financial adviser on that one.
Click to expand...

Sorry for your loss.

This is excellent advice, I wouldn't have said anything different - @Edrof is you need any assistance dealing with your Dad's estate, drop me an email via trust. I've dealt with estates for a long time and am more than happy to give you a hand :)
 
Pez said:
Sorry for your loss.

This is excellent advice, I wouldn't have said anything different - @Edrof is you need any assistance dealing with your Dad's estate, drop me an email via trust. I've dealt with estates for a long time and am more than happy to give you a hand :)
Click to expand...

Good to see OCUK members helping each other out :)
 
ScoTTyBEEE said:
Credit card debt is unsecured and in someone else’s name. Tell them to go swivel.
Click to expand...

Terrible advice - Credit card debt is indeed unsecured, however if the estate is solvent then it will need to be paid. For clarity, only the estate can be pursued for the debt... nobody else.
 
Sorry for your loss, i lost my dad to cancer on the 31/12/2016, sorting his estate took almost a year through probate.. long and arduous process to say the least.
 
It's over 10 years since my father died - no will and not much in the way of assets (lived in a council bungalow) or savings. Dealt with the estate myself as the amounts were so small and it was mainly a question of sending off death certificate copies to the various parties, in order to close things out. However all the bills had to be paid including the gas who initially sent a cheque for a rebate, but three weeks later I got a letter advising they had made a mistake and he actually owed £150! By that point I had disbursed the (little) remaining balance between myself and my brother and had to ask him for £75 back to cover the bill. Maybe could have fought it but over such a small amount wasn't worth getting solicitors involved.
 
Edrof said:
Hi all!

I recently lost my dad and am going through his estate. I need help figuring out some (probably) simple things and I've searched online a lot but I'd rather talk about it here.

He leaves (made-up values):

£150,000 house in his name to my mum.
£20,000 pension lump-sum to my mum.
£5,000 life insurance to my mum.

Four credit cards with £10,000 of debts between them.

The card companies change their answer to us, with some saying mum won't have to pay anything. I understand that his debts should be paid from his estate but what of the above counts as estate? Can they force the sale of a house for a couple of thousand pounds?

Many thanks!
Click to expand...
went thru this 2yrs ago ..
dad owed loads on his cc .. they can't touch the house or your mum ..
as soon as he died the house became solely your mums ..
we just went into each bank told them what happened let them take a copy of the death cert ..
and that's the last we heard of it ..
 
I discovered after my partner died last August, is that she had been persuaded to take out a Debenhams credit card, I think that it was sold to her with the promise of 10% off the purchase she was making. I only found out about it as the card arrived after her death. The debt was only £66 and I was prepared to pay it but she did not need the card, she really should not have been able to get the card given her poor financial history where it was necessary to take out a Trust Deed to get her out of the mess she was in.
I questioned Debenhams and asked was it policy to target 75 year old woman who whilst not having dementia her mental faculties were not as they once were.
They wrote off the debt, wow wee and apologised and agreed that the card should never have been offered in the first place.

Not in the slightest relevance to your thread OP I admit. But I am sorry for your loss.
 
Fantastic advice - thank you so much to everyone who commented. I'll take it all on board and advise my mum - she'll feel much better!
 
Edrof said:
Fantastic advice - thank you so much to everyone who commented. I'll take it all on board and advise my mum - she'll feel much better!
Click to expand...

Sorry for your loss, make sure all are looking after themselves stress can really take it out of you.

For debt related matters I would get a solicitor involved especially any large amounts in dispute. A wily person might save a lot of money that whilst might not feel ethical is within the bounds of law and should be treated as such...
 
Just saw this and wanted to say that I’m so sorry to hear about your dad, @Edrof :(

If you want to chat just shoot me a PM.
 
You must log in or register to reply here.
Back
Top Bottom