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

[DebtAfterDeath]

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

The bank release the money if it's less than a certain amount (this happened when MIL died) but debts still have to be paid. Your sister-in-law should have paid the debts first. They can chase her for the money.

Who is the executor of his will? The executor must pay any debts out of that £6k. Your SiL had no right to just take it and share with your DH. It needs to be put back and used to pay his debts. Anything left after all debts have been repaid could be shared between SiL and your DH. Your SiL sounds very grabby.

That would be lying. As there was money it needs to be repaid.

It doesn't matter where the physical money is, as soon as you take the death certficate and will/letter of administration to the bank they will release the money (to whoever is administrator/ executor) and close the account, you can't just 'pay it back' into a closed account.

That money should be held in one account by the administrator/executor, until debts are settled, then distributed to the beneficiaries.

Funeral costs would normally come out first (although as pre-paid that wont happen) then settle the other debts, you should settle that debt BUT you could write to them and to inform them that the person is deceased and send an original copy of the death cert, and you may find they write off the debt automatically without asking you anything else, or they may ask for a settlement, I'd chance my luck first! But don't lie and say there's no money left, and be prepared to pay it if you need to!

The CAB should have been able to correctly tell you that his debts should have been settled by the estate before distributing funds to relatives.

You don't have to lie, just say the person is deceased, provide the evidence, and see what they say, you may find they'll just automatically write it off, but if they don't and ask for evidence be honest and provide what they ask, there's literally no harm in trying! It will either work or it won't.

I found the government guide, "What to do when someone dies", very helpful when I dealt with my mother's death. It's all set out logically, in the order things have to be done. The financial bit really is quite tricky and I found it quite a worry. But one thing that struck me was that nothing at all could be done about the estate until all debts had been repaid. Your SiL really should not have touched that money. My mother's funeral costs were paid directly by the bank from her estate because no money should be released until debts etc are settled. In fact, if you do publish in The Gazette (which they recommend if there is no will) you must wait a statutory length of time before you distribute the estate. It's a minefield and I'm absolutely amazed that the bank just gave her the money like that if the account was in her father's name. Also, don't forget that any overpaid benefits he might have received will have to be repaid too. Good luck.

The OP has updated to say there is no will.

Also, I don't think the SIL sounds 'grabby'. I imagine she accepted (and split) the money from the bank in good faith. OP clearly states that the OVO bill only came to light today, after the bank had passed on the £6k to the SIL.

OP, see what replies you get on the Legal board. I note that your DH and SIL haven't yet spent any of the £6k. I imagine they need to hold on to it for the time being, as presumably it needs to be spent on your FIL's OVO bill and any other debts of his that may come to light.

I'm not a lawyer, but I don't think your FIL's family can be held responsible for any of his debts that are not covered by his estate (i.e. that £6k). Again, the Legal people will be able to advise you on this. They will also be able to tell you if the money for the Gazette ad comes out of FIL's estate.

Best wishes - especially to your DH and SIL, who've lost their dad.

Re Life Assurance.

In the case mentioned above the policy was written with the wife as beneficiary so the money was paid to her directly.

If the policy is not written with a named beneficiary or in trust for a specific person or persons it DOES form part of the estate.

@DebtAfterDeath As others have said, any debts are paid out of the late person's estate, before anything else is paid to any 'beneficiaries' and your SIL should NEVER have just divided it up between her and your husband until all income and debts were established and debts settled, or at least as far as possible.

The advice about putting a notice in the paper is probably a good one if you can't be sure what debts he has - but you may find that there is sufficient paperwork in his house to let you know without doing that. The expense of doing that will need to come off the £6000 and not your personal money. Your SIL and DH need to 'reunite' the money received - and add it to the £10k if you get it from the Life Insurance Policy. Also advise Royal Mail to redeliver any mail addressed to him for, say, 6 months

Personally, although I used the 'tell us once' option, I also did phone all the people who needed to know as I was anxious to deal with things as speedily as possible and I didn't want to wait, possibly for weeks, to hear back from various sources

You may find ( as I did, to my surprise) that when you tell people regarding his regular commitments - Council Tax, Energy company, Any Broadband or telephone companies etc etc that there may be refunds/rebates come into the Estate - or you may find that Money is owed ( like outstanding pension payments). You won't know what needs to be paid out until that is done and you should wait and see until you have heard from all these people before going forward.

The bank didn't do anything wrong in paying the money out as it was only a small amount in their eyes ( individual banks have different ideas about when they want Probate) - but your SIL and DH need to make sure that they follow the correct procedure now or they MIGHT find themselves liable for payment of outstanding debts, months and months down the line. I am in Scotland and the advice here was to wait 6 months after My Mother died before distributing anything that was left, just to ensure nothing unknown turned up

Either SIL or DH need to keep written accounts of what comes in and goes out. Doesn't need to be anything fancy though, just the details - and also keep any receipts relating to any expenditure. You may have needed to put more towards his funeral too, depending on what his funeral plan covered and that would come off the £6,000 if it hasn't already

The bank has allowed you access to the money not given it to you.

The bank giving you the money with no grant of probate is all very weird.
They should not have done that.
You need to make an application for the grant listing all family members, estate value, debts, whatever you are aware of.
The courts will decide who inherits based on the information given and they inherit all debt aswell as assets

No money can be paid out to anyone until everyone has an opportunity to call in a debt. That’s why CA advised you to put the death in the paper.
Debts must be paid first.

Like others have said, when there is no will you have to follow the rules of intestacy.

If your SIL is taking on the role of administrator, then it is her responsibility to follow the rules. This includes paying your FIL's debts out of his estate. His estate is any money in bank accounts and certain insurance policies.

She probably doesn't need to apply for Probate because the estate is not particularly large, but this also means that if he has a lot of debts then there is an order that they need to be paid because some take priority. Debts will also include final rent, bills, and any overpayments from benefits.

Only after all the debts are paid should any remaining money be divided equally between all living children and the children of any deceased children.

Basically, give that money back to your SIL, cash in the insurance policy, pay the debts, then split what is left over if anything.

My dad died 10 years ago, my and my brother got £4.5k each from a pension. It was paid out in a day and debts (of which dad had shit loads) were never mentioned. I used Tell Us Once, I didn’t have the time or inclination to fanny about sorting out random creditors nor did I get the impression I had to.

Yes legally all debts must be paid and it is your legal duty to do this.
Luckily no one’s come after you, but you took a big risk splitting up the money for yourselves and not paying off the debts.

But there is an estate - £6000 that OP’s husband and SIL have split between them. This should be used to pay for the funeral and any creditors

Funeral expenses are paid first - they take priority. Then the estate is distributed according to the will, if there is one, but only after probate has been granted.

The government website is clear about this stuff and I can't think why no one in your family checked it out: your SIL definitely should not have distributed the £6k like that.

But you don't inherit debts, they'll be written off.

Yes, sorry, the debts are sorted before the estate is distributed.

This is absolutely bizarre, to the point that I think you don’t have the full story. No bank is going to distribute funds like that.

They do when there is only a small amount in the account. £6k is a small amount. I think Probate is only needed when there is more than £20k.

Have been here with a parent who died. Send copy of death cert and explain no money was left. Will be written off.

This is the correct approach. And, as CAB suggested, putting a notification in the Gazette.

The executor of the will should have applied for probate. There’s a lot that has to happen before the estate is released to the executor. Who was the executor of the will? They’ve not followed the correct legal process here..

If you had RTFT you'd have seen there is no will.

Sensible advice here.

Probate not needed for a small amount of cash; banks will release funds under £50k with just a death certificate.

No will means rules of intestacy apply which sets out who inherits and in which order. Your DH and SIL would be top of the list. No need to apply for administration for such a small amount.

But debts must be paid out of the estate so as everyone else has said, make sure you do that. And do check with other utilities as he may have credit balances owing to him.