Dealing with a deceased persons estate
Discussion
Looking for advice on what can be legally deducted from a deceased persons estate. For example if the deceased had a life insurance policy that was left to the spouse does this form part of the estate? If the deceased took out a joint loan with spouse is any of this deductible? Are shares held in the persons name part of the estate? Also what happens if there is not enough money to pay off credit card debts held solely in deceased persons name? Any help would be much appreciated.
Are you the executor of the will or administrator of an intestate estate?
Was the life insurance policy "written in trust" for a named beneficiary?
Shares would be part of the estate.
If the estate's liabilities exceed its assets, no distribution can be made to beneficiaries, as the creditors must be paid first. The executor or administrator of an insolvent estate must take great care to avoid being held liable to creditors, and if things are in a real mess it may be best not to act as executor/administrator. Debts are not, however, passed on to heirs.
A joint loan may impose joint and several liability so that the surviving borrower may be liable for the whole loan - check the loan agreement.
IAAL but IANYL.
Was the life insurance policy "written in trust" for a named beneficiary?
Shares would be part of the estate.
If the estate's liabilities exceed its assets, no distribution can be made to beneficiaries, as the creditors must be paid first. The executor or administrator of an insolvent estate must take great care to avoid being held liable to creditors, and if things are in a real mess it may be best not to act as executor/administrator. Debts are not, however, passed on to heirs.
A joint loan may impose joint and several liability so that the surviving borrower may be liable for the whole loan - check the loan agreement.
IAAL but IANYL.
I'm just going through this process, if memory serves me right the only things that can be taken out of the estate prior to probate is
Funeral costs, inc reasonable costs for a wake/get together afterwards.
Solicitors fee.
Then its a case of documenting everything else and presenting for probate.
However saying that one thing that came out was that my late father had an annuity which continues to payout but is not part of the "estate", our solictor called it "non-protective rights benefits and protected rights benefits" we just took his advise.
Sorry I hope this helps in someway in a difficult time
Funeral costs, inc reasonable costs for a wake/get together afterwards.
Solicitors fee.
Then its a case of documenting everything else and presenting for probate.
However saying that one thing that came out was that my late father had an annuity which continues to payout but is not part of the "estate", our solictor called it "non-protective rights benefits and protected rights benefits" we just took his advise.
Sorry I hope this helps in someway in a difficult time
Thanks for the replies. If say the amount left was £10k and the funeral costs were 6.5k would that mean that the estate left for creditors would be 3.5k or do the creditors have first rights to the 10k. Luckily all house, property and majority of shares were transferred to mothers name many years ago.
OP be very aware that if you are the Executor and have or are intending to administer the estate, then you (and any other executor who has not renounced) are personally liable for getting things right! Under these circumstances, I would suggest you seek executors insurance which costs around 200 quid or so, and which you can charge to the estate anyway. That will give you some protection....
If the estate looks as though it might be insolvent, do make sure you seek proper professional advice before spending or distributing anything, as an official receiver may have to be appointed.
If the estate looks as though it might be insolvent, do make sure you seek proper professional advice before spending or distributing anything, as an official receiver may have to be appointed.
pjfamilyguy1 said:
depending on the amount left, inheritance tax may be applicable, we foolishly thought it was the threshold for the deceased, but its actually a threshold per beneficiary.
again this is just my experience and poor memory.
I think you have your legal terms mixed up there in that the IHT threshold is for the Estate (£325k for deaths from 6/4/1999 to date) (ie all the assets net of liabilities for the estate) and you don't get to 'give' up to £325k per Beneficiary IHT free!!!again this is just my experience and poor memory.
As BV says IAAL,BNYL and it's not my field!
If you get really stuck try the Probate Registry, they are usually quite nice and helpful people to steer you in the right direction. Failing that get proper legal advice, although if the figures you have posted are close to reality I can see why it is an expense you aren't dead keen on!
Sorry to hear of your loss and predicament. Losing someone is hard enough wthout such added complications. If you have a potentially insolvent estate, I doubt you have any IHT worries.
Here are some resouces on insolvent estates
http://www.step.org/insolvent-estates
http://www.insolvencydirect.bis.gov.uk/casehelpmanual/D/DeceasedInsolvents.htm
STEP is the trade body for lawyers who practise in this field. You could check out some local firms who have members of STEP and see if they will do a short free initial consultation ot explain what they can do for you, many lawyers do this.
If you get such an appointment, try and take along (preerable send beforehand) a spreadsheet of the assets and liabilities, which can be readily scanned to give a measure of the problem. Make the most of your time. A note sent beforehand explaining who is who and a clear synopsis of the position would help too, less time explaining things and getting spellings right, more time gettting advice at least on what can be done for you. Don't forget they are trying to sell you a service in this meeting it's not really a pro bono.
As BV says a joint loan is likely to be a joint and severable liabiliy, meaning both borrowers or either of them are liable to repay the loan to the lender. Ths makes the joint borrower potentially a creditor of the estate, for the part of the loan that the deceased did not pay back to the lender. You can bet the lender will look to the (I assume solvent)survivor to repy the loan. You need to look at the loan documents for the precise terms of the loan.
Good luck
Here are some resouces on insolvent estates
http://www.step.org/insolvent-estates
http://www.insolvencydirect.bis.gov.uk/casehelpmanual/D/DeceasedInsolvents.htm
STEP is the trade body for lawyers who practise in this field. You could check out some local firms who have members of STEP and see if they will do a short free initial consultation ot explain what they can do for you, many lawyers do this.
If you get such an appointment, try and take along (preerable send beforehand) a spreadsheet of the assets and liabilities, which can be readily scanned to give a measure of the problem. Make the most of your time. A note sent beforehand explaining who is who and a clear synopsis of the position would help too, less time explaining things and getting spellings right, more time gettting advice at least on what can be done for you. Don't forget they are trying to sell you a service in this meeting it's not really a pro bono.
As BV says a joint loan is likely to be a joint and severable liabiliy, meaning both borrowers or either of them are liable to repay the loan to the lender. Ths makes the joint borrower potentially a creditor of the estate, for the part of the loan that the deceased did not pay back to the lender. You can bet the lender will look to the (I assume solvent)survivor to repy the loan. You need to look at the loan documents for the precise terms of the loan.
Good luck
jensenhealey2 said:
STEP is the trade body for lawyers who practise in this field....
Forgive me for contradicting, but not quite! The Society of Trusts and Estate Practitioners are one of several independent associations for practitioners dealing with family inheritance and succession planning. STEP has over 19,400 members across 95 jurisdictions from a broad range of professional backgrounds, including lawyers, accountants, trust specialists and other practitioners (of which I am one) in this area.
STEP members specialise in a wide range of activities, from drafting a relatively simple will to more complex issues surrounding international families, as well as other activities.
Qualified practitioners are not necessarily solicitors. Some solicitors are STEP Members.
STEP have associated themselves with CLT International for the delivery of certificated professional qualifications for the legal industry.
Another similar body is Cylex. I have done both.
3Dee said:
jensenhealey2 said:
STEP is the trade body for lawyers who practise in this field....
Forgive me for contradicting, but not quite! The Society of Trusts and Estate Practitioners are one of several independent associations for practitioners dealing with family inheritance and succession planning. STEP has over 19,400 members across 95 jurisdictions from a broad range of professional backgrounds, including lawyers, accountants, trust specialists and other practitioners (of which I am one) in this area.
STEP members specialise in a wide range of activities, from drafting a relatively simple will to more complex issues surrounding international families, as well as other activities.
Qualified practitioners are not necessarily solicitors. Some solicitors are STEP Members.
STEP have associated themselves with CLT International for the delivery of certificated professional qualifications for the legal industry.
Another similar body is Cylex. I have done both.
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