FAQs – DECEASED INSOLVENTS – DEBTOR DYING AFTER PETITION
These FAQs are to assist official receivers in understanding the subject and should be read in conjunction with the more detailed guidance given in the main body of the Technical Manual chapter. Links to the relevant parts of the Technical Manual are given within the FAQs.
A bankrupt I am dealing with has died. In what ways will this affect the administration of the estate?
Generally speaking, the insolvency process will continue as if the debtor were still alive (this is the case even if the petition has been presented but the order has not been made) (see paragraph 54.38). The clear difference is that the debtor will not be available to provide information regarding his/her affairs.
Who should provide information regarding the debtor’s affairs?
The duty to provide information regarding the debtor’s affairs falls upon his/her personal representative. Of course, the death may have occurred after the bankrupt had provided a full account of his/her affairs – in which case minimal involvement of the personal representative will be required (see paragraph 54.40).
Who is the personal representative?
The personal representative is either the executor of the will or, where the person died without a valid will, the person known as the administrator. In short, it will be the person with responsibility to deal with the deceased’s estate and arrange for their burial (see paragraph 54.55).
You mention that the duty to co-operate falls upon the personal representative. How can I find out who that is?
The executor is generally named in the will, and the details of an administrator can be obtained from the organisation that keeps a record of the appointment of administrators. The personal representative may have been served with a copy of the petition for the bankruptcy order (if the debtor has died after the petition has been presented but before it has been served), so their details may be on that, or they may be known to the insolvent’s bankers, solicitors or accountant (see Part 3).
If the personal representative is the executor or administrator, it is possible that they are a relative of the deceased. Does this matter?
It only matters in as much as additional care should be taken when dealing with the personal representative, to avoid causing unnecessary bereavement-related distress (see paragraph 54.41).
You mention that the personal representative has the duty to arrange for the burial of the deceased. How can they do this if the estate is insolvent?
The provisions of the Act, as amended, allow for the reasonable funeral costs to be paid out of the estate before any of the preferential or other unsecured creditors (see paragraph 54.49).
Should the fact of the bankrupt’s death be recorded anywhere?
The fact of the bankrupt’s death should be recorded in ISCIS. This will allow The Service to meet an obligation that the information recorded on the IIRR is correct and up to date. The information should be recorded as soon after notification as possible (see paragraph 54.48).
What if the bankrupt had a life policy. Can I make a claim?
If there were no defined beneficiary and the policy has not been sold ‘back’ to the bankrupt, the monies due under the policy would be due to the estate so, yes, a claim should be made (see paragraph 54.46).
What about the bankrupt’s property. How is this affected by death?
Where a person holds a property on the basis of a joint tenancy, their share of the property will pass, automatically, to the surviving tenant (owner) under the rules of survivorship (see paragraph 54.62). Since the making of the bankruptcy order has the effect of severing the joint tenancy their interest in the property will remain in the bankruptcy estate and will not pass to the survivor (see paragraph 54.66).
But the bankrupt I am dealing with died after the petition but before the order was made. Would the property interest still belong to the estate?
Where the debtor dies between petition and order, there has been no severance of the joint tenancy and the property interest would pass to the surviving owner (see paragraph 54.65). This would not be recoverable as a post-petition disposition as it is not considered to be a disposition. If, however, the property were unregistered, it is possible for the property interest to be recovered (see paragraph 54.70).