Skull with a top hat smoking a cigar

Dear Ade,

Do your debts die with you, or do your debts have to be paid after your death?



Dear Roger, 

Thank you for your missive.  

Your question marks you as someone who is not a regular reader of this publication. 

Your query puts me in mind of the eighteenth-century American adventurer remembered as the first white man to get a tattoo, and, no less significantly, as the scrivener whose work was the first to be protected by copyright in the US – the protection albeit achieved by one of those shabby legislative contrivances, of the same class as burdening the populace with state debt to compensate slave holders, but not the enslaved. By contrivance that would bore us if we delved into its bolts and nuts, this chancer, John Ledyard was on the rolls of the Royal Navy – he deserted on realising taking the King’s shilling meant taking up arms against the American nation. 

I wonder why by our modern language we call folk on our payroll, though not in our uniform private military contractors, but we reserve the appellation mercenaries for folk with similar employments, albeit taking the fee of our enemies. I digress. 

History recalls, on being upbraided for scant fidelity to the White Ensign, Ledyard retorted: my honour will still be safe, for death cancels all bonds. What was he on? 

You might have heard of one method of ownership of an asset – joint tenancy. You might recognise it in this style: typically two people, generally a couple in a romantic relationship, would buy landed property together. To our purpose, as joint tenants, on the death of one of them, the tenet of survivorship kicks in. By survivorship, such asset of our concern would pass automatically to the surviving joint owner – no ifs, no buts, no maybes, no perhapses. Joint bank accounts pass to the survivor by this principle. 

When a person dies, the assets that pass by survivorship march as they are destined, to the hands of the survivor. Other than those that passed by survivorship, the assets that were in the newly deceased’s name are totted up.  

Out of this totted up figure, any debts are satisfied. To wit, a needless illustration of the point, most wills have in the third or fourth clause the provision that the executors of the document pay and discharge all my debts, funeral testamentary and administration expenses. The instruction to the executors to pay the deceased’s debts is about as useful as that movie cliché in which a woman in labour is enjoined to breathe – as if she’d forget. 

Of course, as in bankruptcy in your lifetime, if your debts overwhelmed your assets, your obligations would be settled pro rata. If for instance you owed £200,000, but after funeral and estate administration costs, your assets totalled £150,000, your creditors would only get 75 pence in the pound.  

You’ll be in no surprise some folk hide their wealth – big mistake, big disgrace. 

To the extent your assets surpassed your debts, your debts would not die with you. John Ledyard, even if he had been paid, could not have been more wrong: death doesn’t cancel bonds, death doesn’t cancel debt. 

All bonds aren’t annulled. 




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