It is crucial to have a detailed account of any outstanding bills and debts in the name of the deceased, as this is a requisite for probate. This is also vital in order to avoid serious problems down the line, since matters of the estate can go on long past the person’s death.
The following check-list can help you keep track of any debts that the deceased is likely to have:
Credit card bills
Utility/water bills
Electricity/gas bills
Landline/internet bills
Mobile phone bills
Magazine/mail order subscription bills
TV Subscription bills
Hire purchase payments
Outstanding rent payments
Mortgage payments
Car payments
Loans and overdrafts
Council Tax
Income & Capital Gains Tax
Debts owed by the deceased to individuals
Make sure to account for any funeral expenses, including the costs of grave plot, grave stone etc. as part of the estate liabilities.
If the person in charge of making the funeral arrangements is on some form of income support or housing benefit, they may be eligible for Social Fund (a loan scheme) from their benefits agency, in order to help pay for reasonable funeral expenses.
The costs can be recovered from the estate fund later down the line, if there is any available.
What to do next?
The next step after taking account of all the assets and debts, you will need to decide whether you need to apply for probate or confirmation. Before applying, you have to pay off the Inheritance Tax (IHT).
If there are any problems with the estate such as insolvencies or complexities, you may need to seek advice of a solicitor.
Paying the debts
If possible, you should request a delay in the repayment of the debts until you receive the Grant of probate or confirmation, so that funding becomes available. There is no need for the executor to use personal funds to pay these debts.