Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.
How much roughly is DWP claiming is owed to them please?
From what you say your daughter has formally acted as executor already?
Hi the DWP hasn't worked it out yet. My daughter has acted as executor.
Thanks. Do you have any clues - i.e. whether it is likely to be hundreds or thousands for example?
I'm assuming around 3-10 thousand. Debts I paid from the £25,000 were approx £14
Thanks. This is potentially a rather awkward situation which your daughter has quite innocently found herself in. Insolvent estates are very tricky to administer and if mistakes are made by an executor in administering an insolvent estate, the executor can personally liable to creditors which have lost out. For this reason, particularly where executor is not to personally benefit, the best advice is either for the executive to renounce in favour of appointing the official receiver to administer the estate alternatively for the executor to act but only on the basis that they are represented by a solicitor. However, this advice is obviously no help at this juncture coming too late to be of assistance.
There is a strict order of priority in which debts must be paid as follows:
The DWP are now writing to me instead of my daughter but what I want to know if there isn't any money left from the estate can we be taken to court and thrown into prison!!
1. The funeral expenses. These should be reasonable and proportionate to the size of the estate. For example one cannot use £6000 of a £7000 estate on the funeral if there are also debts of several thousands of pounds. A gravestone or other permanent memorial is not considered to be part of the funeral expenses. Family members who pay for a funeral from their own money may find it difficult to recover the money later if there are other creditors.
2. Testamentary expenses.These are the expenses you incur as part of the administration of the estate. You should keep a careful record of these and keep any receipts for petrol or train journeys, postage etc. You may also want to ask for proof of posting certificates at a Post Office which are free of charge.
3. Debts to local and central government.This may be income tax, over-payment of pension or other benefits during the life of the deceased or after their death if there has been a delay notifying the Department of Work and Pensions of the death.
4. Secured creditors. These are loans secured against an asset e.g. a mortgage on a property or a loan for purchase of a car.
5. Preferred debts and Preferential debts – these are very rare and will not apply in most cases. Wages due to employees are preferential debts and this may apply where the deceased received direct payments for employing carers.
6. Ordinary creditors e.g. utility bills, bank loans, credit and store card debts.
7. Interest due on unsecured loans.
8. Deferred debts – an example would be an informal loan between family members.
from the above, you can see that that's payable to the Department of work and pensions have priority over most other types of creditors and accordingly, they are likely to have priority over most if not all of the debts you settled other than potentially funeral costs
as to where you go from here. You have no direct liability to the DWP because from what you say, you did not act as executor. The person with liability would be your daughter if she acted as executor. The insolvency act provides recourse for your daughter to require you to repay sufficient monies from the distribution she gave you in order to repay the DWP. Equally, under the same legislation, such monies as you paid to creditors can be reclaimed. however, depending upon how many individuals are involved and who they are, getting the money back physically is not always straightforward and can involve court action if the individual refuses to make repayments. In addition, calculations need to be performed to ascertain what proportion of monies must be repaid from each creditor and this can become rather complex if there are many individuals involved with different levels of debts
in terms of the best way forward, obviously the first thing to ascertain is the amount the DWP wish to reclaim and your daughter may wish to consider putting pressure on them to come up with a calculation. the reason being, in the probably unlikely event that the figure happens to be very small they may elect not to pursue the issue or alternatively you or your daughter may just decide to pay it and be done with it
however, if as you fear the figure will be much higher will need to consider reclaiming monies from creditors you have paid out to and to do this, it is necessary to have the appropriate figure to hand. Whilst you're waiting for the figure, you and your daughter may consider writing to the various creditors you paid money to notifying them that the state appears to be insolvent and accordingly made the payment is likely been made to them part or all of which may need to be reclaimed under the provisions of the insolvency act advising that you will notify further as soon as further information is to hand
once you have the figure from the DWP, it may be sensible to consider appointing an insolvency practitioner to advise your daughter and to carry out the appropriate calculations in respect of the various creditors that need to repay part or all of the monies paid out by you. once you have these calculations, each of the creditors can be notified and payment demanded backed up by the calculations provided to you by an insolvency practitioner. if necessary, court action may be required to claim back monies from a reluctant creditor.
Are you happy with the information I have provided to you above or is there anything above I can clarify for you any further?
Thank you for your advice. As you say best to wait to see the figure and proceed from there.