Death of a father, married with young children and debts

[asd175]

Hello,

I would be very grateful if anyone can offer any advice or help to us following the sudden death of my brother-in-law.

He passed away unexpectedly at the beginning of December at the age of 38, he leaves behind his wife and three young children (4,10,14). There is no Will in place. I am trying to help as much as I can because his wife is so distraught she isn’t able to function regards to her loss and the overwhelming administration she faces.

I am concerned by his financial position; it appears he has a number of borrowings in his sole name and little in the way of liquid assets. Over the past month we were able to get his bank to post his statements to us. So, I have been piecing together the financial picture. Whilst notifying various institutions we have received settlement figures from several lenders and are waiting on a handful more.

The borrowings for the loans, overdrafts, credit cards and car lease total over £50k. The largest being with a bank which he owes £17k via two credit cards. He has £1k in a cash ISA and virtually nothing else to his name other than his share in the family home.

After purchasing the title register for the house, I have established that the family home is owned by them as tenants in common. I however am unable to establish the share breakdown because there is no record of the signed lease anywhere. I would assume it to be 50/50.

I would estimate that his equity share in the house is worth approximately £80k. There is a joint life insurance policy to cover the mortgage (£150k) and a small pension (£25k) which will help the family in the short to medium term. My understanding is that these fall outside of his estate. I also understand that as tenants in common his share in his home falls within the remit of his estate.

My questions are firstly, what are the next steps I should take?
Do I notify the creditors that he is heavily indebted? Must we disclosure the share in the family home and the ownership structure? Should we now at this stage apply for Probate as administrators?

One lender asked if there was life insurance in place? Given the policy is joint and not a single life insurance policy, again must we disclose this information? My wife and I are deeply concerned that the creditors will be able to pursue his share in the house. Can in this instance they force a sale given the sensitive nature of the matter and the young children? Would that be a realistic route of action they would consider?



Thank you for any advice offered.


David

[Frank1]

Letters of estate administration are required to deal with his estate under the rules of intestacy.
Application can be made online by applicants in the following strict order:
spouse, children, parents, siblings.

His share of the property will become part of his estate. The insurance policy should pay off the mortgage. Check the terms and conditions. Also do the same for his pension to see how much his wife is now entitled to.

If there is sufficient money in his estate unsecured creditors such as credit card companies should be paid before beneficiaries.

If there is not enough estate money to pay these creditors they can apply to court to force the sale of the property.
As, in this case, eviction may cause hardship, especially with young children involved, the court is likely to delay the sale until the children are older.

After these companies have been told about the estate finances by the administrator, and the hardship forced eviction would cause, they may decide to write off the debt.

[asd175]

Hello Frank, thanks for your concise information. I have read up recently on probate / letters of administration etc so have a basic understanding of what is required.



I have collected what I believe to most of the information regards to the creditors and the monies owed. I calculate that his estate is not quite insolvent but that will depend on any further claims on the estate and the subjective valuation of their home.