Deed of Trust

Archive for July, 2008

Question: Deceased person's debt?

Hi, I live in Scotland, UK. My father passed away last year, and recently the local authority has been sending an oustanding bill to recover an overpayment made by them towards his welfare benefits as he was disabled. This has been going on for a few months. Now, the local authority is sendign these same reminders to my mum, and threatenign that they will take leagl action to recover the debt. The thing is my mother lives with me (i own the house) and has signed a Trust Deed to protect her against bankruptcy. At the time of my father's death, he had also signed a protected Trust Deed.

Answer: Um, the guy in the USA is correct.

If someone dies and they still have a debt then it IS the next of kin that is responsible for the debt. That is why it is SO STRONGLY encouraged that you take insurance on any loan, mortgage, etc. That way, incase of death, your insurance company pays off your debts and your family is not left with the debt load. This is even true of credit cards...if your carry a balance, it will be paid off if you die if you have paid for insurance.

Many people these days don't have 'estates' to cover their debts....most North Americans don't even own their own homes or cars...they're all financed.

So, I'm not sure what the system is like in Scotland but I do know in North America that insurance is one VERY important part of life if you care about your family.

Pension trust deeds - How to create an automated pension Trust Deed using PLC FastDraft