# Death of Borrower with no sole assets



## dewdrop (20 Dec 2011)

I often wondered if a person who is a borrower dies and the only assets are cash and the family home all in joint names with wife can the lender take any action against the estate.  I appreciate there may be a moral obligation to discharge what is owed.


----------



## daheff (20 Dec 2011)

i believe that there should be a life assurance policy in place to cover the outstanding mortgage amount (banks insist on it)


----------



## wbbs (20 Dec 2011)

Dont know the answer but there is not always life cover in place, some borrowers cannot get it, banks will still lend without it.


----------



## beffers (21 Dec 2011)

dewdrop said:


> I appreciate there may be a moral obligation to discharge what is owed.



There is a legal one too. When Executor of the estate applies for Probate, all assets must be declared. Debts that were owed by the deceased will have to be declared and dealt with before Probate will be granted.    

If the family home was jointly owned by two spouses, and spouse A leaves his share of the house to spouse B, that can only happen if the bank agree to it. Technically the bank is the owner of the home. They will have the deeds to it locked away in some vault some where. They will not be transferred to the "owners" until their mortgage is paid off. If Spouse B is willing and able to make the mortgage payments on their own, the bank will probably be ok with that. If they are not, then the bank could force the sale of the house to get their money back. Whether or not the bank would actually do so these days is anyone's guess.


----------



## bullworth (21 Dec 2011)

beffers said:


> There is a legal one too. When Executor of the estate applies for Probate, all assets must be declared. Debts that were owed by the deceased will have to be declared and dealt with before Probate will be granted.
> 
> If the family home was jointly owned by two spouses, and spouse A leaves his share of the house to spouse B, that can only happen if the bank agree to it. Technically the bank is the owner of the home. They will have the deeds to it locked away in some vault some where. They will not be transferred to the "owners" until their mortgage is paid off. If Spouse B is willing and able to make the mortgage payments on their own, the bank will probably be ok with that. If they are not, then the bank could force the sale of the house to get their money back. Whether or not the bank would actually do so these days is anyone's guess.



what if all the assets e.g family home etc are in the wifes/partners name but the gas bill, electricity bill etc is in the name of  a deceased spouse/ partner ? Can the wife or partner of the deceased be chased to pay those bills and others occurring at her address but which are not in her name ? Is there any liability attached by being in a relationship (legal or otherwise)  with someone ? Is there any liability attached to some types of bills by virtue of an assumption that the surviving partner might have benefitted from those bills ? (I can think of at least one case where  a partner would not have benefited e.g one pays for internet which the other does not ever use or know how to use. One pays for an item which the other hates etc)


----------



## Padraigb (21 Dec 2011)

Let's get the property thing clear: where a house is jointly owned by a couple, and one of them dies, the property passes to the surviving party. No will or probate is required. Yes, if there is an outstanding mortgage that is not covered by insurance, then the burden of dealing with the mortgage also passes to the surviving party. To say that "technically the bank is the owner of the home" is inaccurate; the bank has a charge on the home - a secured legal claim that means that the property can not be sold without their agreement.

Cash can not be in joint names, so let's ignore that. Bank and deposit accounts can be in joint names, and they can also pass to the surviving partner without the need for probate.

It is imaginable that there be nothing in the estate with which to pay creditors. It is also imaginable that creditors might take a hard look at the situation and if they have a suspicion that matters were contrived so as to avoid payment, they could apply to the courts for an order to set aside the creation of joint ownership of assets.


----------



## Complainer (24 Dec 2011)

Padraigb said:


> Let's get the property thing clear: where a house is jointly owned by a couple, and one of them dies, the property passes to the surviving party. No will or probate is required.


This depends on whether the original purchase of the property was done in a joint-tenancy arrangement, or a tenants-in-common arrangement.


----------



## Padraigb (24 Dec 2011)

The phrase I used was "*joint*ly owned".


----------



## Complainer (27 Dec 2011)

Padraigb said:


> The phrase I used was "*joint*ly owned".



Aren't both of these approaches variations on joint ownership?


----------



## Padraigb (27 Dec 2011)

Complainer said:


> Aren't both of these approaches variations on joint ownership?



If you use language loosely.


----------



## Vanilla (28 Dec 2011)

Complainer said:


> Aren't both of these approaches variations on joint ownership?


 
Yes.

Tenancy in common and joint tenancy are both forms of joint ownership.


----------

