Ian worked as a mid level accountant for a major telecommunication company. Lizzy, his partner and mother of his 3 kids aged 3, 5 and 7 worked 2 days per week in a real estate agency. Ian leased a nice family 4 wheel drive through work as part of his salary packaging but for practical purposes this was Lizzy’s car for driving the kids around. Ian drove a 15 year old “banger” to work every day.
Ian was a keen triathlete and bike rider and used his annual leave every year to travel to competitions all over Australia. Unfortunately while training one morning Ian was hit by a car and suffered major brain injuries losing his life around 8 weeks later.
Lizzy was in shock. Ian, always the detail guy had made sure that he was insured and everything was in order for his family but Lizzy knew nothing about the actual policies and documentation. She had trusted Ian to take care of everything and she had to not only find the information she needed but she also had to find someone she could trust to help her sort things out – that is how she was referred to me.
Ian was insured through an industry super fund and we quickly identified that Lizzy and the kids would be ok financially however she had to make do for around 10-12 weeks before the superannuation and insurance money was paid out. Quick negotiations with the bank and a redraw on their mortgage meant Lizzy had enough to get by and with the support of her parents Lizzy coped well enough although she was the first to admit she was overwhelmed by all the paperwork and didn’t read a lot of what was sent to her from Ian’s employer, the banks and the super funds.
She forgot to tell me that Ian had a novated lease on a car through work.
Lizzy was sitting quietly at home a few of months after Ian died and answered a knock at the door to find two large and intimidating men politely asking her for the keys to her car. They provided paperwork from a firm she didn’t recognise stating that they were repossessing her car due to non payment of the car lease. Lizzy quickly realised that she had forgotten about the car being leased through work but didn’t know these men and had never heard of their company – certainly the men were not related to Ian’s employer in any way she could see.
The men politely informed Lizzy that since the car lease had been left unpaid for so many weeks Ian’s employer had written to her explaining that if she didn’t make arrangements for payment that the lease would be on-sold to a repossession company. These gentlemen worked for that company and showed her copies of letters she had been sent warning her that repossession would happen shortly if she didn’t contact the company.
They took Lizzy’s car.
Fortunately she called me immediately. I was able to speak to the right people and make arrangements to have her car returned to her a few weeks later (when the superannuation and insurance money was paid out). Lizzy had to pay around $1,500 in legal fees and penalties but she had enough money to do this.
The whole exercise was extremely traumatic for Lizzy and one she could well do without.
All debts (including car leases) have to be addressed by the executor of the estate, and promptly. Most debtors are reasonable as long as they are kept informed of the situation. Proper documentation and records would mean this situation could have easily been avoided.
The following article about consumer rights during vehicle repossession is quite interesting www.consumer.ftc.gov/articles/0144-vehicle-repossession.
The Estate Planning For Life process captures the relevant information in the Information That Matters record and makes it easy for family or supporting advisers to understand the financial circumstances that pertain to the deceased or ill person.
But simply having the legal authority to act and the right information is not enough. The EPFL Crisis Management Plan will guide the family through the relevant issues, prioritising those issues and putting the most important things at the head of the list.
As Lizzy said to me later ….. simply having the information and power to act didn’t mean I knew what to do. I had to survive Gil, I have small children, I have no choice. But in the middle of hell I couldn’t think clearly or read anything complicated. Ian needed to leave me with something like a plan, something that told me who to call and what to talk to them about….
Good advice puts people first!
