Insolvent estates

[norwichlad]

Hi

I understand that the DWP are within their rights to claim back overpaid benefits from a deceased person's estate after death and advise the executor not to distribute the estate until the matter is concluded. I agree this makes sense.

However, what happens if the estate is legally insolvent? What can DWP do?

I am the executor to my friend who died, and after consulting a lawyer the estate was deemed insolvent as the funeral expenses exceeded his total assets by a considerable sum. Some other friends and I paid for his funeral and took the few hundred pounds he had left in his bank account as part payment, which the solicitor told us to do as in current UK law, funeral expenses are deemed a high priority item to settle in the case of an insolvent estate. We paid the balance ourselves as his friends.

However, 6 months after we buried him, DWP come along with this claim for overpaid benefits, and they are correct in saying this, but are asking me to pay as executor. Solicitor says to send DWP a letter saying there are no funds, but other advice I've had said this won't work and that DWP have 'special powers' that override UK probate law

Any advice welcome

[des8]

Re: Insolvent estates

Hi and welcome.

Your solicitor is correct.
If there had been funds in the estate, and if you had distributed them before the expiry of 6 months after posting a notice in the Gazette, the DWP could then pursue you as executor.
As there were no funds the DWP recoveries can go whistle!
You are not liable for his overpaid benefits.

[norwichlad]

Re: Insolvent estates

Thanks.

My fear is that they may say that as the payment was made in advance and a high percentage related to a period after his death, that the 'advance' element related to the period after his death is not 'part of his estate' and therefore not subject to UK probate law and therefore recoverable.

[des8]

Re: Insolvent estates

DWP recoveries say and threaten an awful lot.
Sometimes you would think they are a bottom feeding DCA.

If the money was in his bank it is part of his estate.
If there was an overpayment of benefits the DWP are just another creditor.
His funeral costs are a priority and override all other claims.