Can creditors take my Brothers pension?

[squaresausage]

My brother died last weekend, not yet 40.

He holds a private pension and a superannuated one through the NHS.
I have letters from legit debt collection agencies asking for silly sums of money.

My question is - can they claim the money from his private pension and from his NHS pension?

I really don't know where to start.

[LaurieFairyCake]

Unsecured debt cannot be claimed from the estate as far as I know. Do you know what the debt is for?

[squaresausage]

Laurie, I think it is for a personal loan.

There is no will. The amount they are stating (over 16,000) is not a sum of money my brother would've borrowed.

Are his pensions, both private and NHS, classed as part of his estate?

He owned no property and there is nothing else left in his name.

[Collaborate]

Of course unsecured debts are payable out if the estate.
Don't know whether the pension payouts would form part of the estate though.

[LaurieFairyCake]

An unsecured personal loan means they can fuck off as far as I know.

I really loathe debt collection agencies when they do stuff like this.

[LadyKooKoo]

Unsecured loans and credit agreements can be deducted from the estate but i don't think a pension forms part of it. Sorry about your brother.

[iheartdusty]

lauriefairycake is wrong.

debts survive death, whether secured or not.

the relevant question here is whether the pensions fall into the estate - my guess is that they do not, because the payment to the person who has died will stop, but there may be a widow's benefit or life assurance payout or similar, which generally does not fall into the estate.

It could be £16,000 due to lots of interest being added?

[iheartdusty]

i meant to say,I am sorry for your loss. That's no age.

[LaurieFairyCake]

I've just been googling and it says that only debts that go through probate are to be repaid. Unsecured debts are bottom of that list and a pension is very unlikely to go through probate surely.?

[squaresausage]

Many thanks for the replies so far.

I have tried to do a bit a research myself before contacting the company that holds his private pension (which I know he has left in my name) and his work.

Most certainly this amount the debt collection agency is stating must have a lot of interest added, and if indeed they can lay claim to death in service payouts (from NHS) or his private pension, then I am loathe to pay interest. In fact, if they are allowed to claim it would wipe out everything he has.

I am based in Scotland if that makes any difference. Like I said there is no will, no children or partner, and we never discussed this issue at any length.

Many thanks for the condolences, it's all so confusing just now, I just want to do the right thing.

[squaresausage]

I found this

I see no sign of pension there but an expert eye would be very much appreciated.

[squaresausage]

a wee bump

[Marmight]

Generally if someone dies before they take their pension in the form of an annuity, the proceeds can be paid directly to the beneficiaries outside of the estate.

The reason for this in (in 99% of cases), a pension fund is held in trust for the benefit of the named person and so does not form part of their estate, on their early death.

As your brother was still young, (normally you now have to be 55 to access a pension, unless special occupation or ill health/incapacity), and if he completed an expression of wish, it should be a simple thing to sort.

However the trustees have to ensure legally that they pay to the correct beneficiaries, ie financial dependents.

Any unsecured debt, if there is no money remaining, is not recoverable. The pension proceeds should not be used. The firm can add as much interest as they want, it doesn't matter if there is no estate left!

Your best bet, is to contact the two pension companies and go from there.

Sorry for your loss as well. I hope you can get it all sorted with a minimum of fuss.

[WestieMamma]

I used to work in the pensions industry (a gazzillion years ago so my memory is rather faded). I seem to recall that it varied from pension scheme to pension scheme depending on the rules of the scheme, but I can't swear to it. I do remember working with one scheme for a few years where the bulk of my work was processing trust applications to put the funds into trust to avoid inheritance tax. I'd check with the pension providers.

[squaresausage]

Marmight and Westie, thank you. I'll be on the case tomorrow.

[poshfrock]

Square, I am a probate lawyer so you can PM me if you have any more questions but the basic position is as follows:

1. Do the pensions pay out any death benefits? I would be surprised if they do not but the benefits may be limited to a pension for a surviving spouse or dependent child, particularly the NHS one.
   
2. If there is a lump sum payable then did your brother complete a nomination form to say to whom it should be paid on his death?
   
3. If he did complete a nomination then the lump sum will be paid to that person/s. It will be paid outside the estate and the creditors cannot claim it.
   
4. However if there is no nomination then the pension trustees may pay it to the estate and probate may be required before they will do this. In that case the creditors must legally be paid from the estate although you can deduct the costs of the funeral and the probate application before settling the debt.
   
5. If you choose not to apply for probate then the creditors can do so to ensure they get paid.
   

I would suggest you take professional advice as insolvent estates can be tricky to deal with.

Like I say you can PM me if you need more advice.

[squaresausage]

posh, this is invaluable advice. Thank you. In Scotland it seems I apply for what is called confirmation. This allows me to act as executor. My brother had named me on his private pension, and I'm sure on his NHS one also. There s nothing else left, only his wages in his bank account. I have a few hard phone calls to make today.