h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

Can you leave your debt to someone in your will?
You can leave money to them . . . so what about debt?

2of3

Debts and funeral expenses are usually paid out of the deceased's estate before bequests are paid, so in a sense all the beneficiaries inherit the debts, since without them there would have been that much more to pay out.

Apparently not, in the UK at least. You can elsewhere, in Japan for example I am told that people were taking out 100 year mortgages.

But in the UK most of your debts die with you so far as I know. I am not a lawyer, mind, and I think mortgages are a special case, because they are secured on the property. However, that would explain why the lending companies are so keen you should take out insurance when you get an unsecured loan.

Thanks for reading the entry, and thanks for posting the question.

Ben

*simulpost!*
*waves to Bels*

Oh - look - a contradiction! Which only goes to prove that I *really* don't know what I am talking about here. There are many different kinds of debts of course.

Maybe it is that if you die *in* debt, (ie with your debts exceeding your assets) that your nearest and dearest don't have to repay the excess. But if you die in profit, as it were, then the outstanding debts to have to be paid out of your assets. Does that make sense of it, Bels?

But if you are asking the question seriously, and want a real answer to it, then you should check with a professional of some sort.

Ben

It was just a question asked out of curiosity really.

No harm in that. Some of the best questions are idle ones!

There was once this guy, sitting under an apple tree, when an apple fell on his head...

B

You can't leave specific debt in a will, wills are about how to share out your assets (if any).

In the majority of cases (exception is if the estate is extremely small, say a few hundred quid or less), whether there is a will or not, probate or letters of administration need to be obtained (£130 from your local probate office); a statement of assets and liabilities of the deceased is made on the probate form (which may be double-checked by the Inland Revenue at completion) - this is for the benefit of the Inland Revenue to ascertain whether Capital Gains Tax or Inheritance Tax is due from the deceased's estate (yup, they don't leave you alone once you're dead and, I think it's over 40% tax on estates over £260,000ish, which if including house catches an awful lot of people nowadays - and you gotta pay it before anything else happens).

Administrators or executors are obliged to pay creditors - the taxman, overpayment of benefits, credit card companies, the milkman, council tax owing, etc, etc, - before they pay any beneficiaries. In fact it is advisable for executors to advertise for any creditors in a newspaper and wait at least six months to see if any creditor emerges before even thinking of paying out as, if they pay out too early, close the administration, and then a creditor arises they may have to pay that creditor out of their own pocket. And, of course, no administration can possibly be completed until the Inland Revenue is completely satisfied they've obtained their pound of flesh.

Unfortunately dying doesn't solve your debt problems it just puts it onto someone else (plus funeral expenses, etc).