My husband just died and his estate was insolvent.
He owed money to lots and lots of people.
Am I responsible for his debts?
We have a house worth about £180,000 which is in joint names. I think it is owned as Joint Tenants not Tenants in Common.
He left a Will appointing me as Executor along with our family experts.
What should I do because my experts does not want to act as my co-executor unless I give a personal undertaking to pay his fees myself and I do not have any money.
Insolvent Estates Answer.
As a general rule, unless debts are joint and several (which means that you signed the application too or it was done together) you are not responsible for your husband’s debts.
I would suggest you do nothing with the estate at this stage other than send a death certificate to the land registry to transfer the home into your sole name (assuming you own it as Joint Tenants and it goes to you by survivorship outside of your husband’s estate).
The experts is quite right, any charging provision in the Will allowing him to charge for the work he does as executor is treated as a legacy and if the estate is insolvent legacies do not get paid because all creditors have to be paid first, so in effect he would be working for nothing. The experts could make an application to be remunerated and all the creditors would need to agree.
When an estate is insolvent an executor or personal representative can obtain probate without a court order and then pay all the debtors under the normal bankruptcy rules after paying the funeral. This can be dangerous though because if you start to act as executor (intermeddle in the estate) and then miss out creditors or pay them in the wrong order of priority you can be held personally liable for those debts.
The executor or a creditor may apply for a court order allowing them to act. The executors first duty would be to the creditors. A creditor or a trustee in bankruptcy may apply within 5 years of the date of death for an order severing a joint tenancy stopping a home going to the surviving spouse automatically.
It may be best to let sleeping dogs lie with insolvent estates and hope that it is over 5 years before a creditor makes a petition and they can no longer go against your property.
Ingrid at The Probate Department