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Post by jakebullet on Aug 21, 2015 0:30:03 GMT
First post, be gentle.
As the saying goes nothing is certain but death and taxes. I know we all plan to live forever, but what have / should we do just in case with P2P?
Most of the platforms I'm in all you have are login details. Property moose has a share certificate I can download, but I think that's the only one.
Even if you wrote the logins down somewhere, how would your investments get liquidated? To my niece I leave 5 years of funding circle repayments?
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james
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Post by james on Aug 21, 2015 2:30:19 GMT
Yes, leaving the investments in the account is one way. Another is to select platforms with resale markets and/or shortish loan terms so that the loans can be liquidated within a year or two, perhaps less. Bad debt can be an issue with that but some platforms isolate you from bad debt. For those that don't, you can specifically leave just the bad debt portion to someone as part of their inheritance to avoid probate having to wait. For example, older Zopa had no protection fund and it can take more than ten years for debt collection due to such things as IVAs and even beyond that into a bankrupt borrower some payments can still be made voluntarily even though there is no longer legal compulsion.
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duck
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Post by duck on Aug 21, 2015 8:19:13 GMT
As a motorcyclist this is a subject I have given a bit of thought to.
First thing that has to be considered is the platforms policy when an investor dies, no good making elaborate plans if they can't be carried out (passwords are 'available' to my other half in the event of sudden death/incapacity). Where there is a possibility that accounts will be carried over I have looked at spreading large capital repayments simply because it seemed sensible, you can never be certain when events will take over.
Sorting these things will never be easy but on a connected subject beware Santander accounts, it took me 8 months, over 10 office visits and formal letters of complaint to close a simple small savings account when my mother died!
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Post by lynnanthony on Aug 21, 2015 8:21:54 GMT
First post, be gentle. As the saying goes nothing is certain but death and taxes. I know we all plan to live forever, but what have / should we do just in case with P2P? Most of the platforms I'm in all you have are login details. Property moose has a share certificate I can download, but I think that's the only one. Even if you wrote the logins down somewhere, how would your investments get liquidated? To my niece I leave 5 years of funding circle repayments? Would it be legal for an executor to run down the account using the deceased's login? Would he not be obliged to inform the platform of the deceased's death and take it from there. As one would with bank accounts, savings accounts, etc? As I understand it, and I am definitely no expert, the account would have to be either liquidated or transferred to the beneficiary. I think (hope?) that most platforms would have something in their T & C's to deal with this?
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pom
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Post by pom on Aug 21, 2015 8:28:58 GMT
Being in the final stages of wrapping up an estate, after also using a PoA on the same funds it's something I've done quite a lot of thought about too. Passing on login details would actually be a bit dodgy, because executors are supposed to notify institutions etc asap, provide death certs and do everything "properly" - and in return they have to give you a formal death date valuation for the probate/IHT stuff.
What I've done is printed out something from each site I'm invested with - either a "thank you for joining" email or a confirmation of funds transferred etc that I keep with all my other financial stuff so my executors (or attorney should I need my PoA) will know which organisations to contact.
As for how easily stuff can be liquidated I refuse to worry about it any more than I have to - but then at 42 I rather hope it's a long way off anyway, and feel I've done more than enough by having will/PoA in place! My advice would be to avoid too many specific bequests unless it's something really special that's not likely to change, else you could spend your whole life forever updating your will (like my poor mad aunt who had 20 specific bequests - all of them trivial- and then the residue divided 5 ways - I was so relieved to find out I was not her executor). So try and keep specifics to a minimum and then have everything else in a big pot and you can specify how much goes to who either by % or parts.
Then it gives your executors a little bit more freedom to evaluate the current situation and liquidate/divide things up (eg I didn't think it was worth the hassle of trying to divide a very small amount of some shares so we just sold them and added it to the cash pot) fairly in line with your wishes.
The other reason to avoid too many specific bequests in your will is because if for whatever reason your executors can't find them eg they no longer exist or actually they were given away 20 years ago and the person had forgotten (yes I had to deal with the latter!) then they will have to explain to HMRC why something mentioned in the will is not accounted for in the IHT forms - tho at least that should be easier to do with investments than with jewellery or furniture !!
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duck
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Post by duck on Aug 21, 2015 8:29:33 GMT
I can't imagine using the deceased log in would be acceptable long term but as a way of finding out account numbers it would be very useful. Gone are the days of 'pass books' that you could grab and take into a local branch.
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jo
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Post by jo on Aug 21, 2015 11:02:02 GMT
I've posted on this a couple of times. It's an issue that's going to be big - as the industry matures.
My stance is if you can sell a unit, you should be able 'sell' an entire account.
It will be a smart platform that first recognises that running these accounts down via a lawyer/executry process will be disproportionately expensive.
Why not a secondary market in entire accounts with a discount reflecting NPV, risk, existing late/bad debts, convenience of immediate liquidation etc. Hedge funds, insurance companies would lap them up.
It's going to happen, just a question of which platforms get in front of it and steal a mark on the others.
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registerme
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Post by registerme on Aug 21, 2015 22:44:10 GMT
I've posted on this a couple of times. It's an issue that's going to be big - as the industry matures. My stance is if you can sell a unit, you should be able 'sell' an entire account. It will be a smart platform that first recognises that running these accounts down via a lawyer/executry process will be disproportionately expensive. Why not a secondary market in entire accounts with a discount reflecting NPV, risk, existing late/bad debts, convenience of immediate liquidation etc. Hedge funds, insurance companies would lap them up. It's going to happen, just a question of which platforms get in front of it and steal a mark on the others. Because it is fraught with reputational and conduct risk. A fair number of investment banks moved in to "death premium" territory, modelling financial and health risk against pension, insurance or health assets. Most of them have retreated pretty damn quickly, mainly because of a) rep / conduct risk and b) capital requirements (which is of less interest in this market, currently).
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jo
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Post by jo on Aug 22, 2015 10:22:42 GMT
Because it is fraught with reputational and conduct risk. A fair number of investment banks moved in to "death premium" territory, modelling financial and health risk against pension, insurance or health assets. Most of them have retreated pretty damn quickly, mainly because of a) rep / conduct risk and b) capital requirements (which is of less interest in this market, currently). I don't see any reputational risk here - there could be multiple reasons someone would like to liquidate a portfolio...not just death. All it would do would add another layer of liquidity to the market - which is to be desired in a proper functioning market. Again, it will happen, it's just a case of who recognises the opportunity first.
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Post by ablrateandy on Aug 22, 2015 12:57:26 GMT
I don't think that any platform would/can guarantee liquidation of a portfolio upon death apart from "best efforts". What if there are no willing buyers of certain loan parts? (See the ISA consultation for a similar quandary).
I've not looked into it but sort of assume that an executor would contact us and we would work with them to sell down/transfer logins etc. I'll give it some thought.
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JamesFrance
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Post by JamesFrance on Aug 22, 2015 15:39:13 GMT
I would hope that when an account is funded from a joint account then the survivor would be entitled to continue with it with a change of name. I wonder if platforms should be notified when this situation is required, although the account is operated using one name and email address.
Can anyone explain the correct legal interpretation?
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james
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Post by james on Aug 22, 2015 16:50:46 GMT
A joint account holder only automatically inherits the actual joint accounts. The state of the accounts which the money comes from or goes to depends on whether those are joint or not. The classic husband and wife case may well deliberately have the P2P account in the sole name of a non-working partner for income tax reasons even though it may be funded from a joint account. Or may do it in sole name to avoid inheritance tax issues even though the money came from a joint account.
It's perhaps also of interest that the whole of a joint account will be included in the estate of the deceased for inheritance tax purposes unless it can be proved that the money came from two different sources, in which case the portion from the other source wouldn't be included.
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jo
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Post by jo on Aug 22, 2015 19:56:57 GMT
I don't think that any platform would/can guarantee liquidation of a portfolio upon death apart from "best efforts". What if there are no willing buyers of certain loan parts? (See the ISA consultation for a similar quandary). I've not looked into it but sort of assume that an executor would contact us and we would work with them to sell down/transfer logins etc. I'll give it some thought. There's always a price. For example, French Railways bonds traded on the London market right through WW2. The price is the clearing mechanism. So it might not be the price you wish it was, but opposite motivations make a market.
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Post by ablrateandy on Aug 23, 2015 0:58:37 GMT
I've traded bonds for 15 years and unfortunately there isn't "always a price" unless you consider zero or 10p in the pound to be a price or you are willing to wait for somebody to pay what you think is a reasonable price. I have traded both RFF and SNCF bonds (French Railways) through the financial crisis and I can tell you that if I had wanted to sell £20mio of a bond on some days it was not possible at any price even if the total bond size was £300mio or greater.
In a perfect market you are right but markets aren't perfect and p2p markets are a long way from being so.
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Post by ablrateandy on Aug 23, 2015 1:13:21 GMT
Saying that, our secondary market functions like a bond market so you can name your bid or offer price and wait for a willing buyer (unlike many which only allow transactions at face value). However even if you offer loans at 90p in the pound I can't guarantee that someone will buy, even though I am sure that they would.
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