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AIBU?

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Original poster

Are we now responsible for FILs debts now he's passed away?

303 replies

DebtAfterDeath · 26/07/2023 22:20

Really sorry, posted in legal but also here as i know traffic is heavier and i am desperate for advice.
FIL recently passed away ( 5 weeks ago).
Today my husband has found a letter from Ovo stating he owes £3600.
We also believe he had other debs and CCJs but we have no idea on the amounts.
My SIL used the Tell us Once service but Citizens Advise told me today they don't notify people he owes money to and that's our responsibility.
His only estate is the £6000 in his bank when he died (which the bank have already sent to SIL and she has split in half with my husband) and a potential £10k life insurance claim. He privately rented and had nothing else, no valuables and so on.
We are really worried that we may get chased up for money and Citizen's Advise have recommend we register his death in The Gazette. It's going to cost £100 to do it (fine). But nobody I'm talking to seems to have heard of this and are saying pretty much just leave it, he didn't own a lot anyway and this is more for people with large estates.
We want to do the right thing I'm just not sure what that is?
Also there is an option on The Gazette to use the forwarding address service so our address doesn't get disclosed but again this doubles the cost of the notice to almost £200 and we aren't sure how necessary it is
We are so clueless, I'd be really grateful for any advice. The lady at Citizen's Advice was lovely but admitted she got all her advice off the internet as it was a new one to her!
Thanks

OP posts:
Thread gallery
11
Shinyandnew1 · 26/07/2023 22:23

I thought any debts came out of the estate, so I’m surprised the bank released his money straight to family.

FuchsAndMöhr · 26/07/2023 22:23

The money shouldn’t have been distributed. Probate should have been applied for as his estate was worth more than £5,000 and his debts should be paid from his estate (either because you know who his creditors are or because you advertise in the Gazette).

OhhhhhhhhBiscuits · 26/07/2023 22:23

Well the sister had no right to split the 6k between the 2 of them. That forms part of the estate and that needs to be used for funeral costs and also to pay the debts. All debts will come from the estate, if there is no money in the estate then they are written off. You do not pass on debts. However the sister has complicated things by taking money from the estate so personally I would put that 6k back pretty sharpish.

SophiaElise · 26/07/2023 22:24

Sorry for your loss.

Upon death, debts are settled by the estate so the £6000 should go towards the ovo debt. Whatever is left after debts is what is shared as inheritance.

TeaKitten · 26/07/2023 22:25

Why has she just taken the £6000? She can’t do that.

HJ40 · 26/07/2023 22:26

Hi, sorry for your loss. I'm not a lawyer, but based on what I recall from sorting out my own Father's estate.

  1. in the first instance, all debts must be settled, (or settled as much as is possible with the value of the estate) with HMRC first in the queue
  2. only then can any remainder be split according to a will, if there is one

So I would think your SIL should not have split the cash and none of you should spend it as it is owed to cover the debts.

I'm sorry I don't know anything about the Gazette, nor what obligation there is on you to seek out other lenders.

ThinWomansBrain · 26/07/2023 22:26

the £6k that was his in the bank should be used to settle his debts, (and I think funeral expenses) - so beyond the £6k that you and your sister have nabbed, no, your not liable.
I don't think the life insurance payout is part of the estate.

Swingwhenyourewinning · 26/07/2023 22:26

It will be written off. Call them explain he’s dead say theirs no estate send a death cert. I worked for ovo collections

GenieGenealogy · 26/07/2023 22:27

Agree with all the above - currently sorting out the administration of a parent's estate.

Debts are settled out of the £6k in the accounts and then the REMAINDER distributed to beneficiaries. Life assurance policies are different, dad's paid out to mum as a beneficiary but it is not classed as estate in the same way.

So you're not responsible for the debt, the estate is. But if you have done your own thing, taken the money and spent it, the creditors will be asking questions.

MrsPinkCock · 26/07/2023 22:27

No. Some (limited) debts die with the person. Others can be claimed from the estate. But you aren’t responsible as NOK if the estate can’t cover the debts.

Also, life insurance may not even form part of the estate - in our case it was a separate payment.

toochesterdraws · 26/07/2023 22:27

Was there a will or not? This is pretty important.

Overthebow · 26/07/2023 22:27

Don’t spend any of the £6k, you’ll have to repay it abd debts will come out of that.

Ponoka7 · 26/07/2023 22:27

Whoever did the probate, was the executor should have paid the debts out of his estate. You need to start a conversation about this with them. The estate is responsible for the debt. If you have had part of that estate, then you will have to pay it to whoever comes after payment.

SleepyRich · 26/07/2023 22:27

Not a lawyer but I believe his estate would be liable for any debts so they could reasonable take the £6000 that was in his account/potentially any valuables. But they wouldn't be able to chase you for anything in addition to what was your fathers.

You can send a copy of the death certificate to the debtors informing them there were minimal assets and see what happens next but you may well need legal advice. I would expect that £6000 will either go in fees or back to repay some of the debt.

Whataretheodds · 26/07/2023 22:28

Was the £6k in an account that SIL held jointly with your FIL? Or an account in his sole name?

GenieGenealogy · 26/07/2023 22:28

Swingwhenyourewinning · 26/07/2023 22:26

It will be written off. Call them explain he’s dead say theirs no estate send a death cert. I worked for ovo collections

There is an estate. There was a £6k estate but the OP has already (prematurely) split that with her sibling.

Original poster
DebtAfterDeath · 26/07/2023 22:28

When they notified his bank of his death the bank asked them to go In with the death certificate. They did this and after 2 weeks the finds got transferred to my SIL. What should have happened? They were made to believe this was normal practice
Neither of them have spent any of the money
FIL had a funeral plan which covered the cost of that thankfully

OP posts:
EscapeRoomToTheSun · 26/07/2023 22:28

Personally I would just ignore all the letters. They won't chase it themselves, I they will pass it to debt collectors who are unlikely to come after the estate.

I would also not be wasting any money on an announcement or forwarding address. But yes, as pp, it should technically have come out of the estate. No probate tho so they won't be able to find out that there was any money anyway.

Original poster
DebtAfterDeath · 26/07/2023 22:28

toochesterdraws · 26/07/2023 22:27

Was there a will or not? This is pretty important.

No will at all. He was a single man with 2 DC and not a lot to his name

OP posts:
MegBusset · 26/07/2023 22:29

It’s not unusual for banks to release funds without probate even when over £5k if it’s not large amounts of money. This happened recently when my MIL died.

However if your SIL is the executor she needs to settle debts before distributing any funds. There is an order in which debts should be paid after death, funeral costs come first, then secured debts eg mortgages, then unsecured debts. If you Google you should find the order.

Once the estate has run out of money then there’s no further liability.

toochesterdraws · 26/07/2023 22:30

The bank will usually release some funds to allow final expenses such as a funeral to be paid for, but they should not have simply paid your SIL all the money out of the account. How were they to know whether or not she was entitled to any of it?

Original poster
DebtAfterDeath · 26/07/2023 22:31

Whataretheodds · 26/07/2023 22:28

Was the £6k in an account that SIL held jointly with your FIL? Or an account in his sole name?

Solely in his name

OP posts:
MegBusset · 26/07/2023 22:32

toochesterdraws · 26/07/2023 22:27

Was there a will or not? This is pretty important.

This is not important in this instance. The debts need to be repaid from the estate, in the priority order. Whatever is left is distributed according to the will or goes to NOK if no will.

JaukiVexnoydi · 26/07/2023 22:35

The money shouldn't have been released to you - any outstanding debts are supposed to be paid out of the assets of the deceased but if the debts are greater than the assets then the remaining debt just stops existing.

The "Mort" syllable in mortgage is because it's a kind of debt that can outlive the debtor - which is why thr banks want you to have life insurance. No mortgage = no debt beyond the money & assets the deceased left.