Navigating the path forward after losing a loved one can be challenging and overwhelming. In this guide, Legal & Generals aims to help you manage bills, bank accounts, and debts, as well as explain the financial support available for bereaved families.
Taking Over the Bills
If you plan to continue living in the same household, addressing bill payments should be a top priority to avoid unnecessary late fees:
Organise Bills: Create a spreadsheet or list all bills in one place, noting the payment dates and amounts.
Assess Your Finances: Check if you can cover the total amount due each month.
Update Account Holders: Contact utility providers to change the account holder’s name to yours.
Changing Payment Details
Banks must be informed when someone dies, even if you plan to keep a joint account. Consider the following when paying bills:
Joint Account: Bills can continue to be paid from a joint account if you decide to keep it.
Personal Account: Your partner’s personal account will likely be frozen upon notification of their death. Switch utility bill payments to your bank account.
To streamline the process, use the Death Notification Service, a free online service that notifies multiple organizations of a death simultaneously.
Dealing with Debt
Debt includes outstanding balances on credit cards, store cards, hire purchase agreements, and jointly owed debts like mortgages. Here’s how to manage it:
List All Debts: Gather information on all debts and their remaining balances.
Prioritize Payments: Pay secured debts against an asset/property (e.g., mortgage) first, followed by priority debts like Council Tax, then unsecured debts like utility bills or credit cards.
What Happens to Your Partner’s Debts?
Debts become a liability on the deceased’s estate and are paid from their money or property. As a spouse, civil partner, or cohabiting partner, you are not typically responsible for these debts unless you are a guarantor or co-signatory. If there are insufficient assets to cover the debts, they are paid in order of priority, with any remaining debt written off. Joint debts are usually passed on to the surviving account holders.
How to Pay Off Your Partner’s Debts
Notify Creditors: Inform them of your partner’s death and that you are handling the estate.
Check for Insurance: Determine if any insurance policies, such as life insurance, can cover the debts.
Use Assets to Pay Debts: Ensure funeral expenses and estate administration costs are covered first.
Taking Over the Mortgage
Speak to your lender immediately to inform them of your partner’s death. A mortgage is typically the first debt paid from the estate or life insurance. You may need to apply for a new mortgage in your name to cover any remaining debt after an insurance claim.
Taking Over Insurance
Most policies terminate when the primary policyholder dies, which could leave you unprotected. You’ll need to address the following:
Car Insurance: Check if you remain covered as a named driver; if not, start a new policy.
Home Insurance: Changes to your mortgage may affect your cover and costs. Shop for a new deal that suits your situation.
Life and Protection Insurance: Contact the provider to update beneficiary details and review your own policies.
If you have lost your spouse or civil partner, you may be eligible for government bereavement benefits, regardless of your income.
For more information, please visit: https://www.legalandgeneral.com/insurance/life-insurance/family/financial-considerations-for-the-bereaved/
