A focus on Wills - Is my family liable for my debts

Welcome to the fourth blog of our comprehensive blog series that delves into the intricate world of Wills and estate planning. In this thoughtfully curated collection, we aim to demystify the complexities surrounding Wills, offering insightful guidance and expert advice. Whether you’re a first-time planner or looking to revisit your existing arrangements, join us on this journey as we explore the crucial aspects of Wills, from understanding the legal nuances to practical tips on effective estate management. Our series is designed to empower you with the knowledge needed to make informed decisions about the future, ensuring your wishes are respected and your loved ones are well taken care of. Let’s embark on this enlightening exploration of Wills together.

Is my family liable for my debts?  Executors have to make reasonable enquiries into any debts and settle them before paying out to beneficiaries.  Creditors have 6 months following the death to make a claim.  Should funds be distributed by the executors within that period resulting in insufficient funds remaining to meet the debts due, executors may be held personally liable.  It is, therefore, prudent to wait to at least 6 months before making payments, regardless of any pressure to do otherwise.  Where debts exceed the value of the estate, the executors should seek to have the estate declared bankrupt.

Order of priority of debts (where there is a Will):

1. Sequestration costs should the estate be insolvent.
2. Privileged debts – funeral and deathbed expenses and the cost of administering the estate.
3. Preferred debts – such things as payment to employees and occupational pension schemes.
4. Ordinary debts – everything other than the above.
5. Inheritance Tax – payable on net estate but due 6 months after date of death or interest will run.

Lots more information to come but if we can assist in the meantime, please be in touch.

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