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

Not all the comments on the thread are legally correct. Eg as to pension or life insurance pay out the rules will depend on if the person had put those in trust (very commonly done via your employer) in which case the sum is outside the estate and goes to the beneficiary. The famil members who received the money from the bank should have hung on to it (as it is not really theirs yet) and must pay the debts out of it once it is clear what money and debts exist. If they have spent it they are still obliged to pay debts from what they received even if they have to take out loans to do so.

The money that was shared out needs to be pooled to pay off his debts. If there is any left then you halve it.

Small estates often do not need probate.

farewill.com/articles/when-is-probate-required#:~:text=you%20need%20probate-,How%20much%20money%20can%20someone%20leave%20before%20probate%20is%20required,seeing%20a%20grant%20of%20probate.

My late DM died intestate a few years ago and her bank paid me over £20,000 that she had in her accounts as soon as they had received the death certificate.
There were no debts as such, I had to repay the Benefits Agency a small amount that had been overpaid from her pension.
They did not wait for letters of administration to come through.

Thanks so much for all the advice, I really appreciate it.
To clarify, none of the money has been spent, just split between the 2.
I've advised them this morning they need to

• transfer the money back to SIL and keep in 1 account
• arrange a royal mail post redirect
• contact everyone they can think of or know of that he may owe money to

I've also let them know that the life insurance likely is classed as his estate as it was a sole policy and he had no Will.

They posted the advert last night in the Gazette and it is waiting approval.

Thanks so much for all your help
I've learned a lot. Its very much appreciated

I've had recent experience of this and as people above have stated the first money out the estate is to pay for the funeral following that it's the debts .priority debts first hrmc council ect. If there there is no money left them every body else gets told there is no estate to claim from . Make sure you keep all reciepts. And the paper thing is right our solicitor did the same it's to give creditors chance to make a claim.

But that is an outright lie. I can't believe the dishonest people on this thread (well, actually I can, but it is disheartening).

Oh, don't. It has been a pleasure.

When my dh passes his account was frozen, you had to apply for funds to be released, so the funeral director bill was settled from this account and then there was nothing left. He had a small personal loan balance remaining that was written off.

There is also a similar but different in places process for this sort of thing in Scotland, where it's called Confirmation, not Probate. I have found that most banks and other companies are helpful, most will have a "bereavement unit" - I just googled for the units in the companies where I knew Dad had accounts and contacted them by email, or filled in a form on their website with things like dad's full name, date of birth, postcode etc. Then they contacted me with a list of what accounts and things he had with them.

Also just to be clear, I know there have been a few comments regarding grabby SIL. This isn't the case at all.
DH and SIL went into the bank with the death cert as advised on the phone by them, they did this immediately after registering his death together as this banks nearest branch was in the city which is where the registery office is. They were surprised how easy it was - no thought was given to which of them should have the money transfered to. SIL is not working and has more time which is why they said she should. The bank never mentioned anything about distributing to creditors and they believed that as they used Tell us Once this was enough.
We have learned a lot in the last 24 hours 😞

The bank should not have released the money. When my mother died intestate, the only money the bank released was to the funeral director.
Probate needs to be started and letters of administration obtained.

A quick Google could have told you this.
If your sister is going to be executor of the estate she needs to look up what her duties are. I recommend keeping it to one executor as long as you all trust each other, it’s easier if one person is doing it all and you don’t need signatures from everyone else.

Any debt from the estate needs to be paid first, you needs to find out what all of the outstanding bills are. When the bill accounts are closed down there will be money to pay. If the person was in receipt of benefits or a pension and that was paid after they died then that also needs to be sent back until it’s all done formally.

When my mother died I went though the house bagged up any paper work in a bin bag, took it home and went through all of it.
Your sister will be legally responsible to make sure the estate is settled. It would be best for everyone to give the money back and let her sort it out.

You need to pay any debts out of the estate. (The 6k) The life insurance presumably will have one of you (or both) as named recipients so that's your money not the estates. When my mother died the estate was 20k we never did probate and we're not asked to.

You’re wrong. It’s not up to the people owning the debt that there is some money, it’s up to those dealing with the estate to prove there is NO money. A quick look at the deceaseds bank statement at the time of death will show a transfer of £6k into someone else’s account. The debt collection agency will not let this go!

However, there IS an estate - £6k plus a possible insurance policy.

We had to advertise our father's death to give potential creditors the opportunity to advise us of any claims they had on the estate. The executor of the Will couldn't distribute any assets until we were certain that there were no outstanding debts, otherwise he became liable for them. I'd seek legal advice, can you access a free initial appointment to get some info?

Technically the monies have to be paid out of the estate. But these are unsecured creditors and unlikely to chase if you don't communicate. Not saying that is the moral thing to do by the way - its not but that is also the reality of the situation. No need to go through probate. Its the same as any debt but now its owed by the beneficaries of the estate rather than your dad (if the estate has distributed to them rather than to settle debts) but the energy co etc don't know that there is money (abd even if they donthere could be numerous creditors) and most write off if not immediately forthcoming. You can't lie though as that would be fraud. If you paid for funeral, wake etc you can get that back first before any obligation to pay anyone else.

You can charge for your time in sorting out the estate too.

Life insurance is different - doesn't go into the estate so is not up for grabs and goes direct to named beneficaries (or who the life insurance co decides if no-one named) so that should be clear of claim.

By the way most banks will distribute £50k without probate.

The key thing to keep in mind is debts are owed by your FIL's estate (eg the money he has in the bank and any other assets excl life assurance or DIS pay outs) not the family of the deceased. So any debts or outstanding bills should be paid out of the estate.

If there are still debts left after all the money has been spent then you declare the estate insolvent. Do not pay the debts out of your own money.

This is why monies from the estate should not be distributed quickly as it will take a while for bills to be reconciled when accounts are closed. Also if you are selling a property owned by the deceased you may have running costs associated with that property that need to be paid until it is sold.

You’re correct in that only the deceased person is liable for the debts, but incorrect in the assertion that a small unsecured debt shouldn’t come from the estate, nor that the companies won’t chase the debts.
There is money in the estate to clear the debts, so the estate is liable. I am currently dealing with my DMs estate - she died in Feb 2022. As her house is yet to be sold, I have been unable to clear all her debts - small ones of less than 2K each which have all been passed on to a debt collection agency. They contact me every few months to check up on progress - they most certainly aren’t showing signs of writing off the debts!

And i have never seen a life insurance policy where the trustees didn't have discretion to decide where to pay - and they would always choose NOK in absence of declared instruction.

I used the Gazette, it meant after the set date there was nothing to be achieved as the notice had been put in so I’d shown due diligence.

no one came forward and that was the end of the matter - for me it was peace of mind.

I just paid the one fee

Yes, this. If you don't know of all debts, it's usual practice to place a notice in The Gazette, so any other organisations he owed money to can come forward. The cost of the notice comes out of the estate (the £6000). Don't spend this, it needs to be used to settle debts (in the correct order) then anything left can be passed on. If nothing left, no debts can be paid.

Has your SIL checked with the insurance company about the policy? Some policies have a named beneficiary in which case it falls outside of the estate and as such will be paid directly to the named beneficiary. My DM had 2 policies - one named me as beneficiary the other didn’t name anyone. I had to apply for probate and include the unnamed one in the valuation of her estate, but not the one where I was named. (tThis was confirmed by the helpline at the Probate office). However, I did have to show the insurance company the probate certificate, only then did they pay out.
If they insist in probate, and there is no will, someone will have to apply for letters of administration.
You don’t need a solicitor to do this - save the money and DIY.
https://www.gov.uk/government/publications/apply-for-probate-by-post-if-there-is-not-a-will#:~:text=You%20can%20apply%20for%20the,right%20to%20manage%20their%20estate.

You could also do a call credit search or perhaps Experian or something to get info on any accounts or debts he has. If in doubt, check with a solicitor. If it turns out he owes more than he has in the estate I wouldn’t bother going for letters of administration and tell the companies no one wants to act on behalf of the estate. Don’t know what would happen re the money already paid out though so best to check with a sol.

Good that your DH is transferring the money back to your SIL.

In the circumstances you have described your DH would not be liable for your FIL’s debts but your SIL would have made herself liable up the full amount of the £6k which she wrongly distributed and had also left herself vulnerable to a criminal prosecution had any of the creditors chosen to report her. This was because in technical legal terms she “intermeddled in an insolvent estate”

https://www.nelsonslaw.co.uk/intermeddling/

Hopefully she’s now on the path to sorting things out properly now!