Our clients have often inquired about what happens to their debt after they pass away. The answer is straightforward: debts are typically settled using funds from the estate, with beneficiaries receiving what remains after debts, taxes, and funeral costs are paid.
Debts are only forgiven if the estate lacks sufficient funds to cover them all. In such cases, creditors are prioritised, with secured debts like mortgages taking precedence over unsecured ones.
As an Executor, it is crucial to ensure that all debts are settled, as this responsibility carries personal risks if not fulfilled.
Executors often safeguard themselves by publishing notices in local newspapers and the Gazette, giving creditors a chance to come forward and claim their dues.
Many Executors take on their role without fully grasping its implications. Seeking legal advice beforehand can prevent potential personal and financial repercussions down the line.
Please contact us if you wish to discuss any of the above.
0207 183 4595
The information provided in this article is not intended to constitute professional advice and you should take full and comprehensive legal, accountancy or financial advice as appropriate on your individual circumstances by a fully qualified Solicitor, Accountant or Financial Advisor/Mortgage Broker before you embark on any course of action.