Administering an insolvent estate

[leela]

I now find myself administrating my late mum's will. She has a huge amount of deferred care debt to the council, which far exceeds the value of the estate. I've been researching like mad, and have read that this is a job for a lawyer rather than a family member. So I have questions:

a) Is that the case? Is it scarily complex?

b)If so, at what point do I contact a solicitor? Should I gather all the information first? Find out what's in her accounts/how much tax is due (HMRC has sent a tax return form already)? Or do I contact them at the beginning? Presumably the more I do myself, the less time and cost will be involved?

c)How much is it likely to cost? Would his/her fees come first before paying the creditors? What if there's not enough in the estate to pay the solicitor?

d) how long will the creditor (the council) wait? It's already five months since Mum died, and complexities around the original executors (who have now renounced) have delayed things badly. The council hasn't yet done anything other than send the last of the monthly invoices

I'm sorry to ask so many questions in one post. But this is all new to me. I'd been researching probate, but I'm now told that probate isn't needed for an estate that's insolvent. So I'm starting from scratch.

[PallasAthena]

If you are certain the Estate will be insolvent anyway then minimising solicitor's costs doesn't matter much as long as there will be enough money to pay the solicitor's bills although you need to do a bit work before you speak to a solicitor to get a rough picture of the estate's assets and liabilities and who the creditors are. Solicitor will want some idea of what is involved before agreeing to act for you

Are you administering the Estate informally or have you applied for formal 'Letters of Administration' from the Probate court?

The advice given online about using a solicitor for insolvent estates is not only because of the possible complexity but also to minimise risk to the executor/administrator of becoming personally liable to creditors.

There,'s a house isn't there? Do the council have a charge on the house so that they would get all the sale proceeds? Is there enough money other than the house to pay a solicitor? A solicitor would be working for you as Administrator so you would be personally liable to pay the solicitor's bill bill and recover the cost from the estate.

[PallasAthena]

Since posting above I have read your posts over the last few months which answer some of the questions I asked.

I think there's a risk you could end up personally having to pay the solicitor's bills and there not being enough money in the Estate to cover them.

[leela]

Thank you Pallasathena. As you will have seen, things have developed over the period since I've been posting about this. As one stressful issue is resolved, another takes over.

For now, I'll work on the information gathering. A couple of old savings account passbooks have turned up, which I need to look into. Apparently the accounts are still active. The total in them isn't great (under 10k) but as they date from the early noughties, they could mean the difference between being able to pay a solicitor and not.

[leela]

"Are you administering the Estate informally or have you applied for formal 'Letters of Administration' from the Probate court?"

Informally at the moment. Presumably I should keep it that way for now, in case I do end up instructing a solicitor, who will then need to be the one to apply for the LofA?

[Pezza54]

I am surprised the LA didn't put a charge on the property with so much money being owed by your mother for care fees.
Have you checked the Land Registry recently?
A charge would have severed the joint tenancy and you and mother would have become owners as tenants in common with a 50% share each
If there isn't a charge on the property you should complete the appropriate form and send it along with the death certificate to the Land Registry (may be a fee to pay) so the deeds can be amended to make you the sole owner

The LA should not succeed if they try to claim deprivation of assets. You became joint owner with your mother 16 years ago, 4 years before she went into a care home. There was nothing intentional to avoid care fees

If you are still unsure who should be appointed executor, if one is required, you could try contacting the Probate Department (brokers) for advice. Make a note of the approximate net value of the estate (assets less debts) before you phone

[Pezza54]

I am not sure what I have just read is correct - a charge can be registered on a deceased person's property

[leela]

But it was no longer her property from the moment of death. As we were joint tenants., it reverted to me by survivorship. From that point, as far as I'm aware, they can't put a charge on a property solely owned by me, though of course they are entitled to ask for mum's share when it sells.

At this point we're discussing an issue from a different OP that I made a while ago. At this point it's administering an insolvent estate that's my concern, and it remains insolvent, even taking into account half the value of the property.

[leela]

That's odd. I thought I'd replied to your post asking about whether a charge had been put on the property, but it doesn't seem to be here. But no, there's no charge on it, and the deeds have already been changed to reflect that I am now sole owner by survivorship.

[Pezza54]

Thanks for your answers
Has the LA written about the outstanding debt? They are probably adding interest on the debt.

[leela]

No, not specifically. The last we heard was the invoice for her last month of care (for months ago) which had the total owing on it (as did every invoice). I have called them though, as they'd been dealing with someone who was managing her finances through POA, so I had to let them know to contact me on future. The person I spoke to was well aware of the debt.