Trust Deed Forum - Slightly Morbid Question
Trust-Deed.co.uk
Home Home Page


















Trust Deed Forum
Trust Deed Forum
Home | Profile | Register | Active Topics | Members | Search | FAQ
Username:
Password:
Save Password
Forgot your Password?

 All Forums
 Trust Deeds
 Scottish Trust Deed Forum
 Slightly Morbid Question
 New Topic  Reply to Topic
Author Previous Topic Topic Next Topic  

dwightvanman
Contributor

9 Posts

Posted - 03 November 2017 :  12:52:03  Show Profile  Reply with Quote
Apologies in advance for this, but what happens to the outstanding balance of a trust deed if I die before its satisfied? I know that in normal circumstances, a deceaseds debts are applied against the assets of their estate - I have a life insurance policy which was intended to pay off the mortgage, plus another which covers the balance of the trust deed, but only the balance which was accepted by the creditors. I'm now wondering if they'll hit my estate for the full outstanding balances, in which case my partners going to have to sell the house to cover... Or am i overthinking it? I called my trust deed people and they weren't too helpful...

TDA (Debt Adviser)
Trust Deed Expert



12078 Posts

Posted - 03 November 2017 :  12:57:28  Show Profile  Reply with Quote
Hi dwightvanman.

This really depends upon how your life insurance policies have been set up. We, and quite possibly your trustee, are limited to the extent that we can advise you about this. That's because advice about this subject should come from a regulated financial adviser.

Here's a bit of general information (not personal advice) that you might find helpful:

https://www.trust-deed.co.uk/news/lifeinsuranceduringatrustdeedinscotland.php

Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds    
Go to Top of Page

Kevin Mapstone
Trust Deed Expert



3401 Posts

Posted - 03 November 2017 :  13:33:22  Show Profile  Reply with Quote
I'm not sure what you mean by "only the balance which was accepted by your creditors". How is this different to the full outstanding balances?

The simple way to answer your question is that it just the same whether you are in a Protected Trust Deed or not. Either way, if your policies do not pay out a sufficient amount to cover all of your liabilities, including your mortgage, then your house may have to be sold instead.

Recommended Partner & Trust Deed Expert - Ask me for help setting up a Scottish Trust Deed    
Go to Top of Page

dwightvanman
Contributor

9 Posts

Posted - 03 November 2017 :  13:41:53  Show Profile  Reply with Quote
Ok, so if my total debt when I went into the trust deed was 50k and the creditors accepted 20k on the basis of my afforability (just for example, cant remember the exact figures) and I die during the trust deed term, am I right in thinking that the total outstanidng balances rather than the figures that were agreed as part of the trust deed are what would be applied to my estate?

Edited by - dwightvanman on 03 November 2017 13:49:49
Go to Top of Page

TDA (Debt Adviser)
Trust Deed Expert



12078 Posts

Posted - 03 November 2017 :  13:55:36  Show Profile  Reply with Quote
Hi dwightvanman.

The creditors didn't really accept the lower figure. What they accepted was the terms of a trust deed that was projected to collect in this sum of money, but which might collect a different sum of money if things changed for the better or worse.

If you were to pass away the trustee would, to the extent that it's possible, seek to recover enough to fully repay your debts, the trust deed fees, and possibly some interest on the debts.

Might be worth talking to a financial adviser in respect of how your existing policies are set up.

Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds    
Go to Top of Page

dwightvanman
Contributor

9 Posts

Posted - 03 November 2017 :  14:23:45  Show Profile  Reply with Quote
Thanks, thats what I was wondering. So essentially I just need to make sure I have enough life cover for the full amount of the debts plus the mortgage.
Go to Top of Page

TDA (Debt Adviser)
Trust Deed Expert



12078 Posts

Posted - 03 November 2017 :  14:41:06  Show Profile  Reply with Quote
Well... answering that question might be considered to be financial advice, which we're not qualified or regulated to provide I'm afraid.

Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds    
Go to Top of Page

dwightvanman
Contributor

9 Posts

Posted - 03 November 2017 :  14:42:34  Show Profile  Reply with Quote
Sorry - definitely wasnt asking for financial advice! Just for clarification on the figures I need to consider, which you've done, so thanks!
Go to Top of Page

David Tannock
Trust Deed Expert



2074 Posts

Posted - 03 November 2017 :  14:43:37  Show Profile  Reply with Quote
Hi dwightvanman,

Are you having some health difficulties that has prompted you think this seriously about this? How long left do you have on your Trust Deed?

Like Kevin and TDA have advised the balance that would need to be paid under these circumstances would be the total debt and possibly interest and the fees and outlays of the Trustee. This could potentially amount to more than the total debt of £50,000 that you went into the Trust Deed with.

If there are some health issues then itís a good idea to discuss this with your Trustee so they can discuss specifically how this would impact on everyone.

Recommended Partner & Trust Deed Expert - Ask me for help setting up a Scottish Trust Deed
Go to Top of Page

dwightvanman
Contributor

9 Posts

Posted - 03 November 2017 :  15:14:38  Show Profile  Reply with Quote
No health issues (touch wood), just a close friend died recently and his partners been left with a mortgage as his life cover wasnt enough to clear off the mortgage and his debts. Just got me thinking that the main reason I went into the trust deed was to give the family financial stability which, if I died, they definitely woulndt have...
Go to Top of Page

David Tannock
Trust Deed Expert



2074 Posts

Posted - 03 November 2017 :  15:52:45  Show Profile  Reply with Quote
Hi swightvanman,

Good to hear that there are no health issues.

I can understand with a close friend passing away why you would think about things like this and itís always good to be prepared.

A review of the life insurance does sound like a good idea.

Recommended Partner & Trust Deed Expert - Ask me for help setting up a Scottish Trust Deed
Go to Top of Page
  Previous Topic Topic Next Topic  
 New Topic  Reply to Topic
Jump To:
Trust Deed Forum © 2008 - 2017 www.trust-deed.co.uk Go To Top Of Page
Snitz Forums 2000

(c) Channel Active Limited. Company Number: 06412452. Data Protection Registration: Z1332750.
Telephone calls may be monitored or recorded. Authorised and regulated by the Financial Conduct Authority.
Trust-Deed.co.uk, Clyde Offices, 2nd Floor, 48 West George Street, Glasgow, G2 1BP. Tel: 0141 2490416.