Dealing with a deceased persons Estate may often involve scenarios more complex than those envisaged. It is possible, for example, that the deceased owes money, is owed money, or even that they both owe money and are owed money! In any case this will affect the value of their Estate. We will deal here with what happens if the deceased is owed money, before considering what happens if they owe money.
Money owed to the deceased is counted as part of their Estate: Their Estate is everything they owe and are owed less anything they owe. It will in this case become the responsibility of the Personal Representative who acts on behalf of the deceased to claim back the money owed, and it will be in the interests of all the benefactors of the will that this is achieved.
Money owed to the deceased must be declared as it affects the amount of inheritance tax on the deceased’s Estate and may also impact on what is paid out under the terms of the will.
Recovering the Debts of the Deceased
Recovery of casual debts related to sales or money lent may be difficult and there will be no legal obligation on the part of the debtor to pay outstanding money. In many cases it will be difficult to prove how much of a debt is owed, and even if a debt exists at all. This demonstrates the importance of having written agreements drawn up of all significant debts owed – with no written agreement even in your life time a debt owed to you is not worth the paper it is written on, whereas a dated record of the agreement is binding: This goes for contracts of all kinds.
Be sure also to check whether the deceased may be owed things such as insurance on damage or theft of property, tax rebates, and so on.
Business debts should be recoverable, although the law regarding business debts varies depending on what type of business owes money. In the case that business debts are owed it is in your interest to seek legal advice. Your first port of call may be the Citizens Advice Bureau.
Your situation may be slightly different. ask a question below ↓ and our editorial team will reply with our advice.
Dealing With the Debts of the Deceased
When someone dies it is often wise to advertise in the local papers for creditors, in order to see whether they are owe any money. As well as doing this, the Personal Representative must search through their personal documents and their bank accounts (or statements) for evidence of regular and ongoing debt payments. If they do owe anything then this amount must be taken from the total value of the Estate and will therefore reduce their Inheritance Tax liability.
All debts must be paid for from the Estate of the deceased, although it must be noted that this cannot be done until some Inheritance Tax has been paid on the Estate. Be sure to tell all creditors that the debtor is deceased as this will allow some reprieve from immediate payments having to be made. It is unlikely if there is ni money left in the Estate that the beneficiaries of the will need settle the debt unless it was incurred a joint debt.
My brother passed away this year. He had several Asset Reunifications companies chasing him. I understand he was entitled to some money from a property sale going back to 2001.
How can I establish where any money is held and by whom.
I could sign up with one of the Asset companies but they are asking between 19% & 25% plus VAT.
He has not.. he lied to a Dying woman on her death bed!
I have no money to take him to court..what do i do?????
my father died in December 2018 and without making a will. He had a partner but they never married. I am applying for authorisation to deal with his small estate.
There is a complete breakdown in any relationship between his partner and our family. Now since Dad died his partner is claiming she lent my father a considerable amount of money and she will be applying to his estate and us to pay this back. There is no agreement that we are aware of, nor any record of him paying her money from his bank account. She is claiming he has been paying her back.
Obviously if he did borrow this money we are happy to pay it back if there are sufficient funds, but I am suspicious that this has been made up as she is now aware that my bother and I will inherit his estate. My brother and I were extremely close to my father so we are finding this whole situation very upsetting and awful... at this time to be receiving letters and messages money grabbing is quite sickening). She insisted a long time ago that their house and vehicles be entirely in her name, which foolishly Dad agreed to, so she is already keeping their house and sold his car within two weeks of his death. His only asset in his name is a small shop, which is up for sale.
Do you have any advice please on what we should do about this claim of a loan to her?
Many thanks
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