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Dad died over a year ago.

Dad died over a year ago.

Postby becj28 » Mon Jul 31, 2017 1:07 pm

Please help. My dad passed away over a year ago and had nothing to leave. I have since found out he had a life policy that is worth money and have to obtain probate for this. His house was a council house and I left it fully furnished and handed back the keys. They did not charge me for this. I am aware my dad had some debts but not who they were with or for how much and have no paperwork with regards to these. He binned everything. I am wondering if I claim this money am I setting myself up for a fall and liability of this debt. Is it worth getting the grant if probate or should I run for the hills. Does anyone know if there's any way to find this debt or to protect myself and my brother.
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Re: Dad died over a year ago.

Postby becj28 » Mon Jul 31, 2017 1:15 pm

I need to clarify when I left the house furnished he had nothing of value in terms if possessions. He had a relationship breakdown 9 years previous and his home was repossessed and he walked away with nothing.
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Re: Dad died over a year ago.

Postby atticus » Mon Jul 31, 2017 1:42 pm

Contact the life company. They may have a simplified procedure you can use.
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Re: Dad died over a year ago.

Postby theycantdothat » Mon Jul 31, 2017 2:31 pm

Whether the proceeds of a life policy form part of the deceased's estate (and are accordingly available to creditors) depends on how it is written. Basically, if it was written in trust for named beneficiaries the beneficiaries are entitled to the proceeds; probate is not required. If it was not written in trust the proceeds form part of the estate and are available to creditors; probate is needed unless the insurers have a simplified procedure.

If the proceeds are available to creditors they cannot claim from any beneficiary an amount which exceeds what the beneficary has received. The only risk the beneficiaries run (apart from the cost of obtaining probate) is to have to repay what they received.

It is of course the duty of executors acting as such to pay the deceased's debts of which they are aware in preference to paying beneficiaries.
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Re: Dad died over a year ago.

Postby becj28 » Mon Jul 31, 2017 2:33 pm

Thank you for your advice I really appreciate any help. They told me I have to go through probate. The policy is worth 22.5k. It was one he had through his job. I don't think he will have even remembered its existence. I have only found out about it via a letter that was passed from a house he lived in years ago. The thought of missing out a debtor and then then coming to claim off me in years to come terrifies me. I even contemplated not claiming the policy. I know all his gas, electric etc was paid as he was prepayment but I'm unsure if his mortgage had a shortfall due to the repossession and have no idea who it was with or for how much. His ex who he had a joint mortgage with is no longer on talking terms with the family. Someone said place an ad in the London gazette and local paper. Basically if none comes forward for this money will I just have to sit with it in the bank for years just in case?
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Re: Dad died over a year ago.

Postby dls » Mon Jul 31, 2017 3:59 pm

We cannot know the amounts involved, so it is difficult to assist.
If you take out a grant, you then 'advertise for creditors', and that gives anybody who might want to claim against the estate a right to make that claim within six months. If they do not make such a claim then you can in theory distribute.
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Re: Dad died over a year ago.

Postby becj28 » Mon Jul 31, 2017 4:49 pm

Thank you David
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Re: Dad died over a year ago.

Postby theycantdothat » Mon Jul 31, 2017 5:21 pm

Insurance arranged through an employer is a third possibility. Whether the proceeds are part of the estate depends.

Advertising by a notice under section 27 of the Trustee Act 1925 only protects personal representatives. It works like this. You put the notice in the London Gazette and a local paper. When the notice expires (which has to be at least two months after the date the notice appears) the PRs can dispose of the estate having regard only to the debts of which they have notice at the date of distribution. The words in italics are important as it means any claim given after the notice expires but before the estate is distributed must be paid. The claim does not have to be made formally or in pursuance of the notice; it is sufficient that it has come to the PRs' notice.

By way of example:

Before the notices appear A makes a claim. The PRs must pay A.

Before the notices expires B makes a claim. The PRs must pay B.

After the notices expire but before the estate is distributed C makes a claim. The PRs must pay C.

After the notices expire and after part of the estate is distributed D makes a claim. The PRs must pay D but only up to the limit of the undistributed estate

After the notices expire and after all the estate is distributed E makes a claim. The PRs do not need to pay E.

What about the beneficiairies? They are not protected in their capacity as such even if they are executors. A creditor may follow the proceeds into the hands of any beneficiary, but only to the extent of what the beneficiary has received. Let's assume E is owed £15,000 and you and your brother each get £10,000. So long as he does not claim more than £15,000 altogther, E can claim what he likes from each of you and your brother so long as he does not claim more than £10,000 from either. If he claims more from one than the other, there is a right from the one who pays more to get a balancing contribution from the other so that each ends up paying the same. If E is owed £25,000 he cannot claim more than £20,000, that is £10,000 from each of you.

Even if the proceeds are available to creditors it has to be worth cashing in the policy. The worst that can happen is that you pay back what you received. If you are nervous about spending the money in case a claim is made, do not spend it until the limitation period has expired. What the time limit is depends on the nature of the debt, but the maximum is twelve years.
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Re: Dad died over a year ago.

Postby becj28 » Tue Aug 01, 2017 9:38 pm

Thank you theycantdothat
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