jo
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Post by jo on Apr 25, 2014 14:39:41 GMT
Apologies if this has been asked before - I can't find much on this.
Anyone got a view on how an lender's executor draws a line under P2P accounts with regards to lates/write-offs - in terms of distributing the estate?
It seem a bit unsatisfactory (and possibly expensive) to wait for arrangements/recoveries etc to unwind.
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kmac
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Post by kmac on Apr 25, 2014 14:57:08 GMT
I have been wondering this too. How about a charity account to which the executor, or any one else for that matter, can donate the residual bits and pieces?
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Post by phlitb on Apr 25, 2014 15:08:19 GMT
I have been wondering this too. How about a charity account to which the executor, or any one else for that matter, can donate the residual bits and pieces? Like the idea of a charity account for the remnants, for anyone to transfer to, not just for deaths. Good PR for the platform too. I've a Zopa account which I'd like to close, but I've one late payer which it seems will keep the account open for many years to come...
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pikestaff
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Post by pikestaff on Apr 25, 2014 15:45:58 GMT
A very good question. Funding Circle have this in their FAQ. I'd expect other sites to be similar in practice: support.fundingcircle.com/entries/22554911-What-happens-in-the-event-of-an-investor-s-death-The problem is that, where platforms do not permit the sale of bad/late debts, liquidating the investments quickly will be impossible and it could take years to close the books. Ideally platforms would allow such sales. Failing that, it should (I think) be possible to leave the investments to a named beneficiary in your will, so that they can be passed on "as is". One thing I'd like the platforms to do, if they won't permit sales generally, is to offer a facility to donate the rights in bad/late debts to charity which would enable liquidators to draw a line. Again, this might need to be contemplated in the will. More generally, is there any chance that the p2p Finance Association could agree and promote a generic solution....? Edit: Posted before I saw the last 2 posts. Great minds...  |
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mikes1531
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Post by mikes1531 on Apr 25, 2014 16:20:55 GMT
Anyone got a view on how an lender's executor draws a line under P2P accounts with regards to lates/write-offs - in terms of distributing the estate? It seem a bit unsatisfactory (and possibly expensive) to wait for arrangements/recoveries etc to unwind. It shouldn't be a big problem as long as the executor can put a value on the account, and could transfer the account into the name of one of the heirs. Of course, things would be more awkward if the deceased lender had no personal heirs -- like someone who bequeaths all his assets to charity.
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james
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Post by james on Apr 26, 2014 8:40:12 GMT
Lates and write-offs have a value so some value needs to be assigned to them so the value can be distributed as part of the estate. Hopefully the beneficiaries will come to some agreement about value so just one of them can get the loans and any revenue from them. Otherwise the exectuor or administrator is going to end up getting advice of some sort about the value and distributing the loans according to that advice, or keeping the loans until the longest-running IVA or arrangement ends.
If the P2x platform is one that allows selling of loans that facility can be used so far as its rules permit it and as seems desirable. For the rest they will just have to keep running under the new owner of the rights to the loan.
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jo
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Post by jo on Apr 26, 2014 17:44:12 GMT
Thanks to all for the thoughts.
I must admit I'm surprised that all p2p companies don't have a more satisfactory procedure to handle this. Many lives ago I was involved in the unwinding of complex estates and the longer an unwind runs the more the lawyers and bankers win (as a rule of thumb).
I'd like to see (as suggested, above) a facility to donate to charity....... but also perhaps a secondary market to sell distressed loans. Price is the purest clearing mechanism, and at the right price, they'd sell.
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mikes1531
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Post by mikes1531 on Apr 26, 2014 18:13:47 GMT
... the longer an unwind runs the more the lawyers and bankers win (as a rule of thumb). Too true! When I saw the comment in the previous message ( "...the exectuor or administrator is going to end up getting advice of some sort about the value...") it struck me that -- except for very large P2P accounts -- a professional valuation probably would result in a fee that's larger than the valuation!
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Post by oldatheist on Apr 26, 2014 20:29:55 GMT
An executor cannot assign these to a charity unless it is specifically stated in the will. Most wills have a major beneficiary or beneficiaries who get everything after all the other legacies are handed out so the procedure should be that the P2P company should be instructed to distribute any income directly to those beneficiaries as they are recovered. This would also be an option for good loans with a long time to run on them, if liquidating them proves costly.
The tricky bit is valuation for tax purposes, and to make life a bit easier for your executor, it might be worth specifying in your will that recovery of any money from bad debts should be distributed to a charity of your choice, as that takes the valuation out of the equation as it would be then exempt from inheritance tax.
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Post by oldnick on May 2, 2014 0:26:06 GMT
An executor cannot assign these to a charity unless it is specifically stated in the will. Most wills have a major beneficiary or beneficiaries who get everything after all the other legacies are handed out so the procedure should be that the P2P company should be instructed to distribute any income directly to those beneficiaries as they are recovered. This would also be an option for good loans with a long time to run on them, if liquidating them proves costly. The tricky bit is valuation for tax purposes, and to make life a bit easier for your executor, it might be worth specifying in your will that recovery of any money from bad debts should be distributed to a charity of your choice, as that takes the valuation out of the equation as it would be then exempt from inheritance tax. Perhaps also wise to make it an option (if that's possible legally? ) rather than an obligation; so that if, God forbid, all that you leave is a mountain of bad debt, the beneficiaries have something to look forward too if only they can be patient enough to wait for it.
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