Can a dead person's accounts be left open?

Cavalli

An odd question I know, but what I specifically mean is..is there any legal or practical obligation to inform a bank of a customer's demise?

To explain: I've recently obtained Lasting Power of Attorney over my mother's finances (she is elderly, physically housebound and now has dementia). Once the POA was obtained I registered for online banking to deal with her accounts (2 in Santander, 1 in Lloyds).

She's not going anywhere at the moment I'm happy to say, nonetheless she's approaching 86, has been in hospital a lot recently and her own siblings have started dying off, so it immediately occurred to me it would be sensible now that I could to move some of her money around prior to the inevitable rather than just have it sitting there and deal with any financial complications after the event. However I can't bring myself to simply transfer it all into my own name because a) psychologically I'd feel like a thief and b) I'd immediately be guilty of benefit fraud by suddenly having too much undeclared "savings"

But it then occurred to me to wonder if its necessary to withdraw her money at all even if she did die? What I mean is...one would have to tell the govt, tax and benefits people obviously, but is there any legal obligation to inform the bank? Does the state inform the bank? Given the reason family members inform the bank upon a death is so that they can claim and access the funds, and given I already can freely do both those things online, is it possible within the law simply to leave her accounts open and the money sitting in it, operated online after she's dead without telling the bank anything? I mean clearly no one will have written into law that you CAN do so, but is there any legal, moral or practical reason why you CAN'T?

Someone suggested the possession of POA might oblige me to do so as presumably the power ceases on death. However in practice I realised I didn't need to register the POA with the banks to operate the accounts (I did register the fact with santander but started the online registration before they processed it so can log in to her accounts through her name as well as through my own..subsequently I haven't even bothered informing LLoyds of the POA when I started online banking with them in her name. )

Torry_Quine

You really must inform all her banks of the POA as you really shouldn't be operating them until they know this. You must only do things which are in her benefit so moving money into your own name is not acceptable. Yes POA ends on the death of the person and the bank must be informed and the account will be frozen although money for a funeral will be realised if needed.

Finally though she isn't dead so focus on now.

Hermann

I'd suggest there are plenty of legal reasons why you can't just transfer the money into your accounts, it's not your money and the POA doesn't make it your money.

I'd suggest there's plenty of legal reasons you shouldn't be operating someone elses bank accounts without the relevant permissions and approvals in place, I think you'll find that includes informing the bank.

There is also the the small matter that when your mother dies your POA ends and you no longer have the right to act on her behalf, ie access the bank accounts.

When she dies, an executor can act on her behalf. They deal with the bank accounts, in some cases the same ones, in some cases as an executors account.

lonestar1

Assuming the savings are earning interest I would assume there are tax implications as I doubt anyone deceased has a personal tax allowance

Biggles

This is all about your benefits, isn't it?

You could, as you suggest, be guilty of benefit fraud if you continued to use her money as your own whilst not declaring her death.

Will you even inherit it all anyway? Are there other children? Is her husband still alive? Does she have debts, eg outstanding mortgage, loans etc?

And the banks will not be happy if they find out you are operating the account without a PoA being recorded with them. They may not notice while you are doing straightforward stuff online but as soon as you need something more complex and have to explain why your mother can't sign or be there the cat will be out of the bag; you need the PoA registered with them before that happens.

antrobus

Cavalli wrote: »

An odd question I know, but what I specifically mean is..is there any legal or practical obligation to inform a bank of a customer's demise?....

Yes. Dead people lack the necessary mental capacity to operate a bank account. Anyone who failed to inform a bank of the death of an account holder and continued to operate that bank account themselves would be potentially commiting a criminal offence.

Cavalli wrote: »

....Can a dead person's accounts be left open?

Dead people's accounts remain open until such time as someone with the necessary authority contacts the bank and instructs them to close it.

Cavalli

Ha. I tried to anticipate all questions in my posting itself but stopped short as I thought I was rambling on. I take the above advice on board.. register the fact of my authority with Lloyds and no you can't leave the accounts open after death.

But to reassure the suspicious as to my motives I'll clarify the situation further.
Am I transferring her money into my name? I explicitly said not and gave two reasons - it would feel wrong and it would make me a benefit fraud if I did.
"This is about your benefits isn't it?" No, you may put down your copy of Daily Mail. I mentioned benefits for the single reason specified above. I'm a full time carer, we live together, and I live off Invalid Care Allowance topped up with income support. Both will automatically cease come what may upon her death. Whatever happens and wherever her money is I'll not be able to claim anything so you can breathe easy. What I said was that should transferring her moneyinto my accounts prior to death be an option - and we've established that it isn't - then I couldn't do it anyway as that would cause me to be breaking benefit rules, which I've no intention of doing.
Tax avoidance perhaps? We're talking thousands, not tens of thousands and neither of us pay tax, so there's no inheritance tax issue involved.
Not informing one bank that I have POA. I'll take the advice given and do so, but again need to clarify I have full permission, when she was mentally sound and legal authority now she isn't to operate her accounts for her as she's wheelchair bound and not been near a bank in years. As it happens I think from distant memory I may actually have my name on the account in question in any case as I recall being able to move money in and out for her in person when it was first opened.

You may now wonder what exactly I have been doing with my new found superpowers. A dissolute life of gambling and fast women being a bit tricky when you're stuck at home 24 hours a day, the sole online transaction I've made from her Lloyds accounts it to move a share of it from that (interest-free current account) into her own ISA in her own name in Santander.

My question stemmed less from having the power of authority as from the ease with which I found I can operate her accounts online and was purely one of curiosity. To wit, noting that the sole reason for informing a bank, if it doesn't happen automatically, is to access the money in the accounts and given I could do so anyway would I - or any other person in a similar situation - have any reason or obligation to bother.

I think its been established that its a least wise to do so. And for those who clarified that, thank you.

le_loup

You misunderstand the comments that have been made; it was no form of personal attack.
You also misunderstand what having POA means; it does not mean using money in any way for your own use or benefit. Not that anyone is suggesting that you are.
It means keeping TOTALY separate your interests and the and that of the person over whom you have that power. To put any part of that money into your name FOR WHATEVER PERCIEVED GOOD REASON is not legal.

George_Michael

antrobus wrote: »

Yes. Dead people lack the necessary mental capacity to operate a bank account.

Agreed, but mental capacity doesn't seem to matter when it comes to actually running the banks!

Archi_Bald

Cavalli wrote: »

..... neither of us pay tax, so there's no inheritance tax issue involved.

Inheritance tax isn't determined by whether the deceased and/or the heirs pay tax. It is determined by the size of the estate. http://www.ageuk.org.uk/money-matters/money-management/inheritance-tax/?gclid=CLjmpbL-u7sCFXDJtAodYCEA-Q

Cavalli wrote: »

As it happens I think from distant memory I may actually have my name on the account in question in any case

surely, as you now have POA and manage her financial affairs, you know exactly what accounts she has, and whether they are joint or sole?

Cavalli wrote: »

.....the sole online transaction I've made from her Lloyds accounts it to move a share of it from that (interest-free current account) into her own ISA in her own name in Santander.

why has she got an ISA if she doesn't pay tax? There does not seem an obvious benefit, unless she has the Major ISA at 4% AER (coming to and end in the next 6 months). Why is any of her money in an interest-free account in Lloyds? You know about the Lloyds Vantage accounts? And/or the Santander 123? And R85 forms?

Cavalli wrote: »

......
I think its been established that its a least wise to do so.

I think you will find that it is very clearly defined what your duties and rights as an attorney are. Specifically, you must keep your finances quite separate from those of your mother, and your POA ends with her death. This is by law, not by how you feel about it or what someone says on an internet forum. The details should be set out in your PAO documents, but there is also a general guide on the Ministry of Justice website: http://www.justice.gov.uk/downloads/forms/opg/epa101.pdf

Biggles

antrobus wrote: »

Dead people's accounts remain open until such time as someone with the necessary authority contacts the bank and instructs them to close it.

Open, but frozen.