Forum menu
Having just started going through this and having a few solicitors and accountants in the family the general rule is this:
Outstanding debts first including any DWP repayments.
Funeral costs second.
Family last.
I've set up a separate account to deal with all the costs, just a current account in my name but you can get an Executor's Account, all bills are processed through that and documented. What was left of my dad's assets were transferred into it directly and any bills are either paid out directly or a payment to the person who paid the bill is done, everything is documented with references and receipts are kept safe. This way my finances are kept separate and it's easy to see what the state of play is, especially if the estate won't cover the whole lot. I have had it lucky as there's enough to cover everything plus a decent bit left over so I haven't had to worry about paying anything, just had to keep costs under control.
If I was you I'd gather all the bills and costs paid out with documentation and create a spreadsheet of it all, that way you can show where every penny has gone. You will be in a much better position then to know exactly what you owe or otherwise.
But if the executor spent the deceased’s money on the funeral, and then finds there was an uncleared debt, they may be liable for that.
They can be if they can be proven to have acted against the will or to have benefitted in any way. As long as you are not completely incompetent at it it's unlikely a debtor will come after you as the vast majority of people undertaking the Executor role are not experts at finances. This obviously changes if they are a professional like an accountant etc. The key part is that they have to be able to demonstrate they they have enacted the wishes in the will and distributed the resultant Estate of the deceased correctly to the best of their knowledge and abilities.
Funeral expenses must be proportionate to the estate taking account of debts.
What that means in practice is not clear to me, but if the funeral costs ate up the entirety of the cash in the estate when the estate additionally had a few k of debts, I wouldn't be surprised to find that money clawed back regardless of priorities of debts.
If an estate had 10k of cash but 20k of debts, I doubt you would get away with spending all the 10k on the funeral, paying the costs out of the estate and sticking two fingers up to the creditors as a lower priority claim on the estate.
yep, was just pondering on this, wondering how it would all be assessed, not that its relevant here.
and no real need for a spreadsheet either. we have a (low key) funeral invoice, a request for PIP and a request for pension repayments, thats it.
thanks
Before any of the debts are paid, you are first allowed to cover any funeral expenses and the costs involved in the administration of the estate.
Above quoted direct from moneyhelper website part of the UK money & pension service, and yes funeral costs must be reasonable, so blowing all £10k in the example above would not be acceptable but spending an at or below average funeral cost would seem as reasonable.
It doesn't seem at all clear to me that average funeral costs would be seen as reasonable if the estate was insolvent. I mean, on the face of it, average costs would seem reasonable for an average estate, and if the stipulation of proportionate to the estate is supposed to mean anything surely it would imply that an insolvent estate should have a rather cheaper than average funeral.
The precise wording on the NBS website is "Funeral expenses must be reasonable and proportionate to the size of the estate taking into account likely debts. For example, you can’t spend £6000 of a £7000 estate on the funeral if there are debts of several thousands of pounds."
I've no idea what a court might decide however.
and no real need for a spreadsheet either.
Actually I'd suggest thats exactly what you should have had and it can still be done now to make a clean way of showing what money there was and where it went. Might even be what the "manager" was asking for "a statement of account" rather than the bank statement. It could even be done by pen and paper but a s/sheet will do the arithmetic for you and makes it easy to add a new line when some new creditor appears:
It just looks something like this:
ASSETS
1. Heritable Property £ 0.00 [houses etc]
1. Barclays current account (Acc# 12345) £ 3,424.12
2. Post Office account (Acc# 98865) £ 101.50
3. Premium Bonds (Acc# 90890) £ 50.00
4. Shares (BT x 100@£1.26) £ 126.00
5. Movable Property (Schedule A) £ 250.00
6. Cash £ 23.62
=====
Total Assets £ 3,951.62
LIABILITIES
1. Funeral expenses (Coop funeral services, Inv# 543) £ 2,600.00
2. Cremation cost (XY Borough Council, Inv# 324) £ 985.00
3. Department of Social Security (payments received after death, Notice ref XXX) £ 1435.00
4. Credit card (acc# 123456) £ 123.50
5. Utlitiy bills (EON, acc#45677) £205.20
=====
Total Liabilities £ 5225.20
NET ASSETS
Total Assets Less Total Liabilities -£ 1273.58
Therefore the estate is insolvent<
Signed XXX (and XXX)
Administrator(s) of the estate.
I think it is important to list cash, and moveable estate as very few people would have literally nothing. If I saw a statement that didn't itemise that I'd wonder what else you had forgotten. Equally though you can list costs like paying someone to clear a house, hiring a skip etc.
That is what I have done in the past. Nobody has ever asked for the detail / backup behind it, but I think it would possible for someone to ask you to back up claims. In Scotland you would ultimately take this (for a small estate) to the Sheriff Clerk who would issue the Statement of Confirmation which you usually need to get any cash out of the accounts (theres an HMRC form that needs this information completing). I sent a "provisional" statement like that to all the various banks/cards/utilities etc with a copy of the death certificate and asked for details of any other assets they were aware of etc. Then at the end I sent them the same again with all the extra debts added, estimated values of assets turned into final values etc. I appreciate that probably seems a bit anal and abit of a PITA for someone who is grieving but its kind of important you get it right - imagine if you were a creditor who was not aware of a death, and then someone inherits a stack of cash and you get nothing.
yes, thats correct. the funeral cost more than what was in MILs account.<br />we did it this way as we had to. it took months for the estate to be transferred to wife when the bank released the funds (a week or so ago). we couldnt leave it that long to have the funeral as im sure youd agree?
The funeral director may not have volunteered this information but they are quite used to waiting for payment and know the issues involved. Now they may want guarantees that they will eventually get paid but that didn't mean you needed to actually pay in cash before the estate was liquidated. Banks know the funeral gets paid first so if you manage to talk to the right person can be persuaded to pay them with a copy of the invoice. All the big banks have a team specially to deal with relatives of the deceased, and in my experience they are pretty good. Not much help to you now - but might help someone else reading this. <br /><br />I'd suggest its really important that your wife uses the right languge when talking to potential claimants. "months for the estate to be transferred to wife" will sound like your wife got a chunk of money. She wants to be saying that the estate was insolvent and there were no funds to distribute.
When my dad died his CC account debt was written off by CC company. ...should've stuck a new bike on it before I told them 😀