Try to say that a few times in a row.
There is a song by a band called the Godfathers from the 80’s I believe entitled, “Birth, School, Work, Death”.
And if you like taking matters to the least common denominator, that song does encompass this.
I recently have been faced with matters relating to my own mortality, those of my family, and the loss of a few friends. It brought to the forefront a few things I have addressed with clients and I thought I would mention here.
Not an exclusive or all knowledgable piece, but my sharing my knowledge and experiences.
So let’s take each title and look at it, in it’s place and perspective.
Death and Debt
Your debts do not die with you when you move onto the other side. You may die, they do not…but they can be written off.
When you die, any debts in just your name are still a responsibility, however, you are no longer around to pay those debts. And if an account or debt is in just your name, your friends and family are NOT responsible to pay them.
However, those you owe, your creditors, can look to your estate to seek the remaining balances owed paid to them.
Which leads us to Estates.
When you die there are many things that occur and need to occur. Hopefully you had a Will, a Last Will and Testament of your final wishes.
Also, hopefully you had life insurance.
Two things need to be noted here:
If you die without a Will, life gets complicated for those left living, not for you. A little joke.
Certain assets can be left behind to beneficiaries or jointly held family members or friends, without going through a process called probate.
Probate in itself can be a complicated and complex matter, too much to discuss here. However, to simplify for what we are discussing here, if you die with debts, and have assets, such as property, and the property or assets were in just your name, those you owe, your creditors, could seek to legally go after your estate to be paid.
There are ways to pass assets to someone outside of a Will and probate. Any beneficiaries on life insurance policies receive the death benefit paid to them, directly to them, not the estate. If there is no designated beneficiary, the monies can be paid into the estate, which means a creditor could seek to be paid out of this.
Jointly held assets, such as a property, if titled correctly with the land registry, can pass to the living joint holder, outside of probate.
It needs to be said here, estate planning can be a very complex issue, and as such, you need legal advice. We advise, but do not provide legal advice.
Moving on to the last bit, taxes and death.
Here is where matters can get even more complicated.
If a person is who dies is a PAYE, or pay as you earn, their taxes to HMRC should be current. But there are certain government bodies that need to be notified of the death.
Here in the UK we have a service called, Tell Us Once, and that allows a family member or whomever, to register the death.
This simplifies matters for the surviving family members or who is handling the estate.
Then there is the issue of any inheritance tax, which as I write this is changing. That is why legal advice, or going to the gov.uk web site in imperative.
Death, debts, estates and taxes can be complicated, however, with prior planning and advice, matters can go smoothly.