‘What happens when I die’ is a concern occasionaly voiced by investors. Investments in p2p lending will be inherited like any other assets. The concern for the investor is how readily their beloved ones will be able to access the funds. I scanned the FAQs of several p2p lending marketplaces but this is not one of the topics addressed. I then reached out to the marketplaces asking for information.
Ratesetter, Assetz Capital and Estateguru pointed out that the procedures are very similar to those applied by other financial institutions.
Assetz Capital, after being notified about a death of an investor by the next of kin or a solicitor acting on behalf of the deceased estate will mark the account as deceased and suspend all marketing emails. The next step is requesting proof of death, most commonly provided in form of a death certificate and grant of probate. In the event that the decision taken is to liquidate the account then all account holdings are put up for sale. Any funds which can be released immediately are sent to the appropriate recipient and a monthly sweep of the account is carried out indefinitely until such time as all funds have been liquidated and released to the appropriate recipient.
Luke O’Mahoney of Ratesetter explained: ‘If an investor dies, we work with the next of kin to establish how they would like the account to be dealt with. Generally they would either use our Sellout function (effectively liquidating their investment) or they would allow the account to run down over time â€“ of course we assist the next of kin or executor with this process’.
Funding Circle CE answered: ‘If the account is transferred theÂ inheritance would need to be proven and the account would be manually transferred. The heir can then decide what to do with the portfolio.’
Martins Sulte, CEO of Mintos indicated that there are numerous different situations as the account is inherited according to the respective laws of the country where the investor resides.
In Estonia all matters of inheritence are usually dealt with by a notary office or a solicitor, says Aleksei Kurov of Estateguru. He describes ‘[the] notary or solicitor sends requests to different registers: Property Register, Companies House including all credit/finance institutions to clarify if the person in question had any obligations or deposit/investments accounts opened and what are obligations or funds are connected to these accounts. … When all heir/heirs are clearly identified and the amount of inheritance is also clarified then Notary Office is making a registry entry to an Inheritance Register. This entry will specify the list of heirs and their share of the inheritance. EstateGuru will have an information about the death and consequent inheritance procedures when we are contacted by Notary or Solicitors office. Then we will check with Inheritance Register (if the investor is from Estonia) or with according local institution to confirm this information. We will also seek independent confirmation from his Bank, which was used to transfer funds to our account. Any monetary pay-out or change the information of the account owner is possible only after we receive an official and apostilled confirmation from notary office, solicitors and/or double check this information with available local Inheritance Registry. If information we received is in local language, we will request that it is translated into English and apostilled. If we are satisfied with the identity confirmation and the legal rights heir/heirs then we will follow instructions from them, to make necessary changes on the account, close it or do the pay-out of available funds.Already invested funds will be repaid at the project maturity.’ Continue reading