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Dealing With a Deceased Partner's Money

By: Kevin Watson MSc - Updated: 22 Sep 2011 | comments*Discuss
 
Deceased Partner Debts Bank Accounts

When someone dies, money may be the last thing on the surviving partner’s mind. But unfortunately, financial matters have a way of coming to the fore. To reduce the stress this can cause, it’s worth knowing how to deal with a deceased partner’s money and assets.

Executors and Administrators

If the deceased leaves a will, the executor handles all financial matters. In the absence of a will, an administrator deals with such issues. Executors and administrators are often friends, relatives or solicitors. It is likely, of course, for the surviving partner to be the executor or administrator.

Timescale

An executor or administrator must notify all relevant parties of the death. He or she also has one year from the date of death to deal with the deceased’s estate. Once the year is up, the executor or administrator may have to pay interest on assets that remain undistributed.

Debts

One major worry people have is about the debts a deceased partner leaves behind. This can be a complex issue, and it’s always wise to take professional advice.

In simple terms, the estate of the deceased person pays any debts. The “estate” refers to the money and property of the deceased, including any life insurance. But in the case of debts related to property such as mortgages, water rates, council tax and fuel bills, the surviving partner has responsibility for payment, not the estate. This applies even if the surviving partner did not have his or her name on the bills.

If the surviving partner was a joint tenant with the deceased, he or she is responsible for any rent arrears. If the surviving partner was not a joint tenant, he or she should apply to take over the tenancy. The landlord may wipe out any outstanding arrears. But the surviving partner should not assume this and may need to seek legal advice.

The surviving partner is not responsible for personal loans, credit cards and store cards in the deceased’s name. The executor or administrator of the estate should settle any outstanding debts on these. But if the surviving partner had a joint loan with the deceased, acted as guarantor for a loan, or held credit cards and store cards in joint names, he or she becomes responsible for the debts.

Payment Protection Plans

A deceased partner may have had payment protection plans in place for credit cards, store cards and personal loans. These plans should cover any amount owing at the time of death.

Mortgage Life Insurance

The deceased’s life insurance may well cover the outstanding money owed on a mortgage. A surviving partner should always check this.

Bank Accounts

Any bank account in the sole name of the deceased remains frozen until the executor or administrator sorts out the estate. A surviving partner who had a joint account with the deceased can continue to use it.

Savings

As with bank accounts, savings solely in the deceased’s name remain frozen until the executor or administrator sorts out the estate.

Sometimes, though, an executor or administrator may struggle to find the details of a savings account. The British Bankers’ Association, National Savings and Investments and the Building Societies Association have come together to offer a free service to help trace such accounts. The name of the service is My Lost account.

Tax

If a deceased partner paid tax, the executor or administrator becomes the “personal representative” of the deceased. The personal representative must notify HM Revenue & Customs (HMRC) of the death as soon as possible.

The personal representative may have to complete some paperwork. HMRC then advises of any outstanding tax or rebate.

Insurance

Insurance can take many forms. As well as mortgage life insurance and payment protection plans, the deceased may have had other life policies and a funeral plan.

The executor or administrator must tell the appropriate insurance companies about the death without delay. The companies may ask to see the death certificate before they pay out.

Private Pensions

Private pensions usually end with the death of the recipient. If someone dies before claiming a private pension, the pension company may award a lump sum and possibly a regular income to the surviving partner.

State Benefits

The Department for Work and Pensions (DWP) manages state pensions. To avoid an overpayment, an executor or administrator must notify the DWP of a death as soon as possible.

Business

If the deceased ran a business, or was a joint partner in a business, the executor or administrator may need to speak to both a solicitor and an accountant. This is because any financial issues related to a business can be difficult to resolve, especially if there’s no will.

Advice

The occasion of a death can lead to distress and confusion. People who feel that financial matters at such a time are getting the better of them should seek advice. A solicitor can help with complex money and legal issues. Other organisations that offer guidance include Age UK.

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