Debt on death

My wife has just been diagnosed as being terminally ill. The issue is that all the debts are in her name and also the house. Our insurance will pay out 150k lump sum straight away and her pension will pay out £ 90k with no further ppayments. The issue is that she has a mortgage for £ 123k and over 80k worth of unsecured debt which has been serviced perfectly over the years. We intend to pay off the mortgage and transfer it into my name but what would happenb if we didn't pay off the unsecured debt and have any pension paid into my bank account. Would the creditors have any claim on her death? I would like to keep some of the money to bring up the two small children.

Reply to
yser
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Sorry to hear about your wife.

Wait until a qualified person confirms it, but I think basically speaking unsecured debts cannot be transferred to family members. You should seek legal advice. But have a read here, it may help:

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Good luck

Reply to
Melanie

Her estate will pay the debts before the remainder of her assets are distributed according to her will. The OP says the house is solely in her name so there is possibly danger that the house will have to be sold to pay the debts.

I think the OP should consult a solicitor and find out how to secure his right to continue to live in the house. Some simple action now might save a lot of costly and stressful action later at a time when people are least able to think straight after the death,

Robert IANAL

Reply to
Robert

In message , snipped-for-privacy@hotmail.co.uk writes

Usually Pension Trustees have the power to pay a lump sum to anybody they wish and will usually pay to the person named in a written 'expression of wish', so make sure that she has done this in your favour. This will legally avoid the unsecured creditors. BUT the unsecured creditors would still have a claim on the estate which would then appear to be insolvent. If you are creditworthy and with £90k in your pocket as a deposit you could possibly raise a mortgage in your own name and buy the house off the estate, but it would have to be at market value.

To whom will the Life policy pay? Is it on joint lives? Is it owned by both of you? If in your wife's sole name and in her favour get her to assign it to you or place it in trust to you.

Many life policies have free 'critical illness' cover which means they will pay out in lifetime so long as death is certain within a short time, the time varies from company to company. Check with the LifeCo. If the Life Policy doesnt have this feature then the policy may be saleable to somebody who will give you, say, £130k now and they get the £150k later as a profit. She could then 'do' things with the dosh to defeat the unsecured creditors.

Sorry to be blunt about things but I wanted to give you the full picture. Best wishes.

Reply to
John Boyle

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