Losing a loved family member is emotionally challenging, not to mention stressful when dealing with funeral arrangements and financial worries. During the grieving process, money will be the last concern on your mind. However, finances are essential to consider, and it’s important to understand how the deceased’s debt may affect you.
Fatal Accident Claims is a UK solicitor service by Liverpool firm Hutcheon Law. They offer valuable advice and support to bereaved families and help them receive compensation that can be vital in overcoming a sudden loss. In this article, Fatal Accident Claims will explain whether the family will inherit the deceased’s debts and why compensation can be valuable.
Who Inherits the Deceased’s Debts?
When a person dies, their assets, such as money, debts, shares, property and personal possessions, are managed by their estate. The estate is defined as a person’s net worth, comprising their assets and liabilities. After death, an executor will oversee the estate, which is a personal representative named in the will. If an executor is not named or is unwilling to act, an administrator, often a close relative, will be appointed.
The estate handles the deceased’s debts, so spouses or immediate family members won’t be required to repay them with their own money. The executor or administrator manages the estate, including collating financial documentation, freezing bank accounts, and sharing the estate’s assets as described in the will. They are also responsible for ensuring debts, such as credit arrangements and mortgage payments, are paid off. A notice should be made as soon as possible to alert organisations about the person’s death. If creditors are not informed, they may chase debts after the estate’s assets have been cleared.
Repayment responsibilities will land on your shoulders if you are named on a joint mortgage or are a guarantor. You must inform creditors of joint debts to become the sole person responsible. If you have problems repaying the debt without your loved one, you may be able to renegotiate the payment structure.
If the deceased’s estate doesn’t have enough money to pay off all the debts, it will become an insolvent estate, and an order of priority will determine the repayment plan. Secured creditors like mortgage providers should be paid first, followed by funeral expenses. Unsecured creditors, including utility bills, would be further down the list before interest owed on unsecured loans and deferred debts.
You are not liable to pay off any of the deceased’s debts unless you are named in a joint agreement or as a guarantor. The remaining debts will be written off if the estate runs out of assets. Debts should be paid before the remaining assets can be shared with family members.
Why Families Should Consider Compensation
Compensation claims have a negative stigma attached, but it is a necessary action in the event of sudden death. Fatal accident claims are usually possible when someone has died due to another person’s dangerous or negligent actions. For example, dangerous driving, medical malpractice, and workplace hazards are three common examples where loved ones can make a claim.
So, why do family members make compensation claims? Losing a loved one unexpectedly is emotionally and financially damaging. There is not much preparation for such an event, and the deceased may not have arranged a will or funeral arrangements. Therefore, there are several financial consequences you must handle.
Firstly, you will have to make funeral arrangements for the next few weeks in the immediate aftermath of a death. Funerals are by no means cheap, and there are several stressful parts to piece together. If your loved one received medical care before their death, there would also be additional costs. A compensation claim can help you recover for funeral expenses, medical fees and other critical costs.
Another significant factor is how your life has changed following the accident. You may have lost dependency due to the fatal accident. Dependency can include shared costs, such as rent and utilities, plus services like childcare. Dependency claims will offer compensation to help you get your life back on track.
Finally, you may be eligible to claim the bereavement award. The bereavement award is a government scheme that provides a statutory amount of £12,980 to eligible people, including spouses and parents of non-adults. The award is designed to offer guaranteed damages to families who’ve lost a loved one due to a fatal accident.
