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Debts After Death

By: Beth Morrisey MLIS - Updated: 20 Feb 2018 | comments*Discuss
 
Debts debts After Death death debts

When someone dies any private property, possessions, investments and other assets owned by that person becomes known as his or her estate. A chosen executor (as stipulated in the deceased’s will) or administrator (appointed by law if no will exists) will have this estate assembled and documented, valued, taxed correctly and finally distributed it to those who stand to inherit. This distribution will either take place according to the terms of the deceased’s will or by the laws of intestacy/succession if no will exists. Before this can happen, however, debts that are both owed by and owed to the deceased will need to be taken into account.

Debts Owed by the Deceased

When an individual dies and still owes money in debts, these amounts must be covered by the deceased’s estate. Insurance policies may be enough to pay off some debts, so always check to see if the deceased held death cover for a mortgage or some sort of payment protection cover for personal loans and/or credit card debt. Some of the debts that may need to be covered include water rates, Council Tax, utility bills, outstanding amounts on hire purchase agreements, tax debts and possibly even mortgages. Personal loans, credit card debt and other personal debts will need to be paid off by the estate as well, and if total debts can not be covered by insurance money and cash then property and personal possessions may need to be sold. If these items are sold for higher than the market value, tax may be due from the sale as well. If there is not enough value in the deceased’s estate to cover his or her debts, the debts will not necessarily pass on to a spouse or family member unless another individual was involved in joint loan with or guaranteed a loan for the deceased.

Debts Owed to the Deceased

Debts owed to the deceased are considered part of his or her estate and it becomes the responsibility of the executor or administrator of the estate to collect on these debts. Generally, however there will need to be written terms of the agreement to make it enforceable. Debts that were not stipulated in writing may be unenforceable and the money may not be able to be recouped. In fact, if loans were made on an informal basis to another individual there may not be any legal obligation for the other individual to pay them back. Business debts owed to the deceased should be discussed with a solicitor. A solicitor will also be able to advise the executor or administrator on how best to collect debts that are proving difficult to recoup.

The executor or administrator of the deceased’s estate will be primarily responsible for seeing that all debts owed by the deceased and all debts owed to the deceased are properly sorted and settled. It is highly advisable that a solicitor be involved in debt repayment and collection, though advice can also be sought from a Citizens Advice Bureau (CAB). Debts can take time to settle, so anyone expecting to inherit from the estate of a deceased friend or family member should remain patient and offer help as needed in order to smooth the process and ensure for an efficient settlement of all of the deceased’s affairs.

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Supernurse - Your Question:
Looking for advice I have paid life insurance policy for my mum direct debit for almost twenty years. My mum died recently leaving credit card debt of approx. £2000 should the insurance policy I have paid be considered part of her assets

Our Response:
The proceeds of a life insurance policy will usually form part of the deceased's estate unless it was "written in trust"...so you should check the details of the policy and seek advice from a solicitor or financial advisor.
FacingBereavement - 20-Feb-18 @ 12:54 PM
Looking for advice I have paid life insurance policy for my mum direct debit for almost twenty years. My mum died recently leaving credit card debt of approx. £2000 should the insurance policy I have paid be considered part of her assets
Supernurse - 16-Feb-18 @ 7:18 AM
Harry- Your Question:
Hello, my father is frail and in his 80s. He lives alone, vehemently refusing most types of help. He is no longer safe to drive. For my father's family visits, medical appointments etc my sister and I have set up an account with a minicab company. My father is using this enthusiastically, but refuses to pay for it despite being wealthy. This leaves us paying for it and it amounts to around £500 per month! Do you think this money could be counted as a debt to us when the estate is assessed for IHT in future? Thanks in anticipation.

Our Response:
We don't think it will be discounted from future Inheritance Tax. Perhaps you could bill him for the expense then claim it from his estate as a debt when he dies? If you stop paying the bills, would he capitulate and agree to pay himself do you think? Sorry we can't really make any other suggestions.
FacingBereavement - 13-Feb-18 @ 10:51 AM
Hello, my father is frail and in his 80s.He lives alone, vehemently refusing most types of help.He is no longer safe to drive.For my father's family visits, medical appointments etc my sister and I have set up an account with a minicab company.My father is using this enthusiastically, but refuses to pay for it despite being wealthy.This leaves us paying for it and it amounts to around £500 per month!Do you think this money could be counted as a debt to us when the estate is assessed for IHT in future? Thanks in anticipation.
Harry - 11-Feb-18 @ 12:26 PM
Sallyally - Your Question:
Hi, would appreciate some advice. My mother died in 2016 aged 66. I'm the sole executor of the will which left everything to me. I've done Probate and the net estate value was £28,000. Mum's only asset was her house worth about £40k which is still on the market. I've just had a letter from DWP saying that they want £15,000 from the estate back due to overpayment and they will take proceedings against me if I don't pay it. I'm panicking as I don't have £15,000. What should I do? TIA

Our Response:
Contact the DWP and ask for a breakdown of the debt, when it occurred etc. Once they reply, take it to Citizens' Advice along with details of your mother's assets etc and ask them for help.
FacingBereavement - 29-Jan-18 @ 10:36 AM
Hi, would appreciate some advice.My mother died in 2016 aged 66.I'm the sole executor of the will which left everything to me. I've done Probate and the net estatevalue was £28,000. Mum's only asset was her house worth about £40k which is still on the market. I've just had a letter from DWP saying that they want £15,000 from the estate back due to overpaymentand they will take proceedings against me if I don't pay it.I'm panicking as I don't have £15,000. What should I do? TIA
Sallyally - 26-Jan-18 @ 5:11 AM
Tarn - Your Question:
Hello, my grandma passed away in 2012. My dad took on her estate and dealt with some bills however there has been a debt bought of my grandmas now they’re asking for payment which my dad is paying and it’s crippling him. If this debt wasn’t brought to late until my grandmas estate was gone, does dad still have to pay?

Our Response:
Tell your father to go to Citizens' Advice with details of the debt. After 5 years it's quite late to be claiming this and usually if there is not enough in the estate to cover it, the debt would be written off.
FacingBereavement - 12-Jan-18 @ 3:28 PM
Hello, my grandma passed away in 2012. My dad took on her estate and dealt with some bills however there has been a debt bought of my grandmas now they’re asking for payment which my dad is paying and it’s crippling him. If this debt wasn’t brought to late until my grandmas estate was gone, does dad still have to pay?
Tarn - 10-Jan-18 @ 10:29 PM
Holly - Your Question:
My dad has written a will leaving his residential property to me and my sister.He has his name on the mortgages of a couple of other properties that he has got out for his wife (estranged).Would the mortgages of these properties have to be paid off using the profit from the sale of his residential home (our inheritance) first before we were entitled to anything left?Thanks in advance

Our Response:
You will need to check whether the deeds of the other properties are in joint names as joint tenants, tenants in common or just your father's name to establish who is liable for any debts. Your father may also have life insurance policies covering these if they are still mortgaged. If you can't manage this yourself, you should seek professional legal advice.
FacingBereavement - 6-Sep-17 @ 2:25 PM
My dad has written a will leaving his residential property to me and my sister. He has his name on the mortgages of a couple of other properties that he has got out for his wife (estranged). Would the mortgages of these properties have to be paid off using the profit from the sale of his residential home (our inheritance) first before we were entitled to anything left? Thanks in advance
Holly - 4-Sep-17 @ 10:10 PM
Kazbah- Your Question:
My mum died and bills came in after her death. who pays these. Also she died after getting pensions from my dad who died years earlier we were asked to pay back but her bank is empty how do we pay back money she spent? She was alive 25 days agter payment why should they ask for it back?

Our Response:
Debts repayments should be made out of the deceased's estate. If there is nothing left in the estate - the debts should be written off...they're not your responsibility. Ask a professional about the pension payments as we don't have enough detail to comment.
FacingBereavement - 2-Aug-17 @ 10:46 AM
My mum died and bills came in after her death .. who pays these.. Also she died after getting pensions from my dad who died years earlier we were asked to pay back but her bank is empty how do we pay back money she spent? She was alive 25 days agter payment why should they ask for it back?
Kazbah - 29-Jul-17 @ 7:06 PM
My mother recently passed and has left her house (mortgage paid off) to myself, my brother and my sister (both of whom live in her house). However, my mother also left a certain amount of debt which only around half of can paid through her insurance policies. There's a shortfall of around £15,000...will the house have to be put up for sale in order for this to be paid? As stated, both of my siblings still live at the property. Can they be forced to sell? PS. The property is in Scotland.
Corky - 13-Jul-17 @ 3:56 PM
Carrie - Your Question:
My mum passed away 2 months ago. She was still owed her share of my grandma's will, which my aunt had never given to her. Am I entitled, as my mums only next of kin (my mum died without a will! ) to claim this money, approximately £35,000, from my aunt? I have a copy of my grandma's will as proof. Thank you for any info.

Our Response:
How long ago did the grandma die? Has the Will been adminstered yet?
FacingBereavement - 17-May-17 @ 12:56 PM
My mum passed away 2 months ago.She was still owed her share of my grandma's will,which my aunt had never given to her.Am I entitled, as my mums only next of kin (my mum died without a will! ) to claim this money, approximately£35,000, from my aunt?I have a copy of my grandma's will as proof.Thank you for any info.
Carrie - 16-May-17 @ 4:01 PM
Kitten - Your Question:
I was left a property in will ,it has a outstanding mortgage will want 2 take ,but mortgage company won't letMe were do I stand legally I lived in house for 11 years my grandads parents died and left me property they both lived with me

Our Response:
You should speak with a financial adviser to see if there's anyway you can get a mortgage/borrow in some other way. The only alternative would be to sell the property to repay the outstanding mortgage but a professional legal or financial adviser would be able to tell you more.
FacingBereavement - 2-May-17 @ 2:48 PM
I was left a property in will ,it has a outstanding mortgage will want 2 take ,but mortgage company won't let Me were do I stand legally I lived in house for 11 years my grandads parents died and left me property they both lived with me
Kitten - 2-May-17 @ 10:13 AM
Kitten - Your Question:
I was left property In a will ,I lived in home 11 years and me grandad lived with me but the morgate In his name and they won't let me take over morgate and are trying to sell home

Our Response:
If you were left the property in a Will we're not sure why it is not in your name now. Unless someone promised it to you in the Will but hasn't died yet? Sorry - there's not enough information here.
FacingBereavement - 29-Mar-17 @ 2:25 PM
I was left property In a will ,I lived in home 11 years and me grandad lived with me but the morgate In his name and they won't let me take over morgate and are trying to sell home
Kitten - 28-Mar-17 @ 10:38 AM
Milly - Your Question:
My friend recently passed away with a lot of debt if I sign the death certificate will I be reliable for his debt please help thank you

Our Response:
No you won't be liable for your friend's debts.
FacingBereavement - 16-Mar-17 @ 11:17 AM
My friend recently passed away with a lot of debt if I sign the death certificate will I be reliable for his debt please help thank you
Milly - 14-Mar-17 @ 12:15 PM
I lost my father last year, he still had a small mortgage on his house. I have shown the lender the death certificate and a copy of the will showing me as the sole beneficiary and informed them that I wish to pay the mortgage off and have the means to do so. They are not allowing me to pay it until probate is granted, but are still adding interest to the debt, which I feel is unfair. Does anyone know where I can find regulations regarding this and if they're allowed to do it?
jojo - 11-Jan-17 @ 6:16 PM
Ma1963c - Your Question:
My parents had a new carpet laid last October 2015. They paid for it I believe part debit card and then cash on it being laid. They weren't happy with bits of plastic within the carpet and requested compensation and arranged for an engineer to inspect it. Dad died suddenly on 7th December 2015 and mum died 25th February 2016. In July I started getting text messages from the shop saying that they never paid the balance when it was fitted. So now its my dead fathers word against the shop. any advice appreciated because they won't leave me alone. Thanks

Our Response:
Sorry you need to give more information? Did the engineer attend to inspect it? What was the outcome?
FacingBereavement - 13-Dec-16 @ 1:59 PM
My parents had a new carpet laid last October 2015. They paid for it I believe part debit card and then cash on it being laid. They weren't happy with bits of plastic within the carpet and requested compensation and arranged for an engineer to inspect it. Dad died suddenly on 7th December 2015 and mum died 25th February 2016. In July I started getting text messages from the shop saying that they never paid the balance when it was fitted. So now its my dead fathers word against the shop.. any advice appreciated because they won't leave me alone.Thanks
Ma1963c - 12-Dec-16 @ 4:24 PM
Keith - Your Question:
I received a letter from works and pensions for the repayment of pension paid to my mother in error a few days after she died nearly eight months ago. Her assets were divided up to beneficiaries seven months ago. Is this debt payable.

Our Response:
DWP are entitled to recover overpaid pensions. If there is nothing left in the estate however, they cannot be paid. Did you inform them immediately when your mother died? Have they tried to recover the payments previously?
FacingBereavement - 2-Dec-16 @ 11:36 AM
I received a letter from works and pensions for the repayment of pension paid to my mother in error a few days after she died nearly eight months ago.Her assets were divided up to beneficiaries seven months ago.Is this debt payable.
Keith - 1-Dec-16 @ 1:21 PM
jackie - Your Question:
Im the rep. Of my mother for all questions and doc. You need but we have a prblem for all call request cause aside from bevenent payments we want to know if my father have any property left in uk. Can I inquire if what dep. Can help me as a me where we ask a help for a any mobile plan for all call to uk gov. For all inquires call cost for requested additional information call is the requiremensts Hope you undrstant our situationbecause we undergoing crisis after my father pass away

Our Response:
Sorry but we cannot help without lots of information from you. Please go to a Citizen's Advice Bureauwhere they'll be able to direct you to the right people/organisations.
FacingBereavement - 29-Sep-16 @ 12:05 PM
Im the rep. Of my mother for all questions and doc. You need but we have a prblem for allcall request cause aside from bevenent payments we want to know if myfather have any property left in uk. Can i inquire if what dep. Can help me as a me where we ask a helpfor a any mobile plan for all call to uk gov. For all inquires call cost for requested additional information call is the requiremensts Hope you undrstant our situationbecause we undergoing crisis after my father pass away
jackie - 28-Sep-16 @ 4:01 PM
jackie - Your Question:
My mother passed away in July, a few days later I received a letter from her care home stating due to an over sight on their part she has a debt of £1976 , she had no will only a small amount of money in her bank that was used for her funeral. I did not have power of attorney. Who is responsible for this debt?

Our Response:
If someone dies and there is not enough in the estate to pay all the debts then these should be written off (i.e. her debts die with her as they cannot be repaid). As a relative, you are not liable for the debt unless you provided some sort of personal guarantee to the care home.
FacingBereavement - 14-Sep-16 @ 11:00 AM
My mother passed away in July, a few days later I received a letter from her care home stating due to an over sight on their part she has a debt of £1976 , she had no will only a small amount of money in her bank that was used for her funeral. I did not have power of attorney. Who is responsible for this debt?
jackie - 12-Sep-16 @ 12:51 PM
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