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Managing a deceased’s estate

04th July 2016

Through our many dealings with the administration of a deceased person’s estate, we are conscious of the efforts made by the Department for Work and Pensions (DWP) to recover overpayments of benefit paid to an individual during their lifetime.  In our experience, this is particularly true of pension credit

It is common for overpayments of state pension and attendance allowance to occur due to the time taken for notification of death to reach the relevant department and the process for dealing with these is usually relatively straightforward.  However, when it comes to pension credit the situation can be complex.

The DWP confirm that pension credit is an ‘income-related entitlement with the amount payable dependent upon the circumstances of the claimant’ and on the Government website it is made clear that they ‘can recover overpayments from a person’s estate’.

When dealing with the estate of someone who had been in receipt of pension credit, once a Grant of Representation has been obtained it has become increasingly common to receive a letter from the DWP confirming they have been advised of the Grant by the Probate Registry and requesting details of the estate including its value and a list of the deceased’s assets.  They will then ‘see if the information matches what was declared during the period benefit was paid’.

In most cases, the information will match and the matter will be resolved fairly quickly but where there is a discrepancy it is sometimes necessary to obtain details of bank accounts and investments going back many years and as financial institutions are only obliged to hold records for the previous six years this can be very difficult and time consuming.  These, more detailed, enquiries can lead to frustration and occasionally distress for family members who often feel their loved-one’s integrity is being called into question.  The point is often made that a particular organisation assisted their relative in completing the application and so ‘how could it be wrong?’ However, we have seen that it can be a subsequent failure to report a change in circumstances that leads to the overpayment rather than failing to disclose assets at the outset.

Personal representatives have a duty to ensure the deceased’s debts are paid before distributing the estate.  Placing statutory advertisements in order to protect themselves against claims from unknown creditors is advisable but they should also be mindful of potential claims by the DWP where the deceased was in receipt of pension credit.  It also emphasises the importance of record keeping and the need for personal representatives to make thorough enquiries when administering an estate.

Siobhan Richards. Solicitor, private client department.

General, George Ide, News, Private Client, Wills and Probate
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