Whenever a loved one passes on it can be a stressful and traumatic time for those who are closely related to them, especially if the finances of the individual are causing additional stress to the trauma of dealing with their loss. The death of someone can almost always cause all sorts of financial shocks, such as information in wills, hidden debts, and other financial troubles that may not otherwise been known.

When it comes to the will of an individual the deceased will have appointed one or more executors who are responsible for following the instructions that are set out in the will. However, if an executor has not been appointed the state will appoint a solicitor who will work on behalf of the decease. The solicitor or appointed executor will be the one to divide up the estate and identify the beneficiaries, however before any beneficiaries can may any claims to assets there are other liabilities that need to be dealt with, such as the funeral director's costs, HM Revenue & Customs, secured loans such as mortgages, and unsecured debts such as personal loans or credit cards.

The debts of the deceased should be paid off by their estate in the order of funeral costs, death taxes, secured debts and unsecured debts. However, if the deceased's estate is not large enough to cover all the debts then a lender cannot make a claim on the estate. Lenders are also unable to make a claim from relatives for the deceased debts, which can come as a relief for many who feared that loans taken out by the deceased would pass to them, despite them never benefiting from the money.

Stuart Pike is a Director of Inter Financial Limited, based in Guernsey in the Channel Islands. Through their website All About Loans Inter Financial offer advice and information which is all about loans and personal finance in the UK.