Most people think that when they die, their debts will ‘die with them’.
This impression couldn’t be further from the truth and usually the debt is borne by the deceased’s estate, effectively passing on to the family of the individual.
It is not widely known that any outstanding VAT, employer’s PAYE/PRSI contributions for the previous twelve months for the deceased, but also for any employees of theirs, are payable by the estate.
Like any other creditor, the Revenue will pursue the estate for the outstanding amounts due.
Your estate may also have to repay:
- Secured debt against property such as a family home; holiday home; vehicle or goods lease or a business premises
- Unsecured debt like credit cards and personal loans
- Loan guarantees – if you are a guarantor, the loans become yours and if the borrower fails to pay your estate will end up repaying this debt also
It is very important to have adequate life cover protection in force to repay all your debt which will help to remove unnecessary financial stress following bereavement.
Taking out life assurance cover is an excellent way of protecting your family financially but with the expense of everyday life pulling on your purse strings; it can be difficult to see how to budget for this cover.
The good news is that the cost of life cover has decreased by up to 40% over the past ten years.
This is due to greater competition, increased efficiencies by Life companies, greater longevity coupled with a savvier consumer.
Below is the comparative monthly cost of life cover of €350,000 for a 20-year term.
|Jan 2001||Sept 2010||Difference|
|Male non-Smoker||Age 30||€26||€21||– 17%|
|Age 40||€57||€40||– 39%|
|Male Smoker||Age 30||€43||€30||– 29%|
|Age 40||€106||€71||– 32%|
|Female non-Smoker||Age 30||€23||€16||– 28%|
|Age 40||€40||€27||– 31%|
|Female Smoker||Age 30||€33||€25||– 24%|
|Age 40||€75||€51||– 32%|