Advice about receiving and using money before probate

netlon

Hello there

My father passed away recently and as an executor, I am in the process of applying for probate. He had some savings and current accounts with NatWest and Halifax.

The accounts have been closed and the Halifax has posted a cheque to me in my name which is the balance of money he had with them.

I am going to create an executors bank account to keep all the money raised from his assets until the time comes to divide them between me and my sister.

My question is: Can I access these funds from the Halifax to pay for previous and ongoing expenses incurred in the process of settling his estate, before probate is granted?

Thanks in advance,
Andrew

getmore4less

Yes. The authority to act comes from being named in the will.

g6jns_2

netlon wrote: »

Hello there

My father passed away recently and as an executor, I am in the process of applying for probate. He had some savings and current accounts with NatWest and Halifax.

The accounts have been closed and the Halifax has posted a cheque to me in my name which is the balance of money he had with them.

I am going to create an executors bank account to keep all the money raised from his assets until the time comes to divide them between me and my sister.

My question is: Can I access these funds from the Halifax to pay for previous and ongoing expenses incurred in the process of settling his estate, before probate is granted?

Thanks in advance,
Andrew

Technically a grey area. Although named in the will the executor's powers really stem from the grant of probate. Halifax may have no strict legal authority to pay until probate has been granted. As long as the estate is solvent then there should be no problem. I was talking to a retired QC friend of mine about various things connected with probate last week. He told me that there are numerous loopholes that need tightening up to prevent unscrupulous, and dishonest family members plundering estates. I am not suggesting that you are doing this. Assuming that what we hear about on this board is only the tip of the iceberg then it is worrying. I suppose reform is not likely to be a vote winner so there is unlikely to be any change in the near future.

Tuesday_Tenor

When you open the executors bank account, you will be able to pay assets in straightaway, but the bank won't give you a cheque book or other means of paying out of the account until they have seen the grant of probate. You will however, be able to pay for the funeral from it before probate, by sending invoice to the bank who will pay the undertaker directly.

Strictly speaking Halifax should have sent the cheque to 'Executors of Mr. XXXXX' to be paid into the executors account. [Don't get me started on the carelessness of Halifax, who my Dad had banked with, regarding bereavements ....!]

As you now have a cheque in your own name, you can pay it into you own account and use it to pay any necessary outgoings, probate fee, house insurance, final utility bills etc. And/or it forms an initial installment of your inheritance. Just make sure the other executor(s) are aware, and keep meticulous records.

If your experience is anything like mine, you will get a variety of names on things like utlility refunds anyway. Some came as 'Executors of ....'. Some came in my name, without me asking for this. Personally I wanted the simplicity of doing EVERYTHING through the executors account, but it didn't quite work like that in practice. Both executors (and only beneficiaries) incurred small expenses and received small incomings (utility refunds, cash sale of furnitire. etc). We ended up setting up a 2-person speadsheet for everything that happened outside the executor's bank account. This was easily e-mailable to keep us both up to date. We called this 'petty cash', for want of a better phrase. It was all part of the estate. When we came to the final distribution, my sister was slightly out-of-pocket overall, and I'd slightly gained, from the 'petty cash' transactions, so we adjusted the 50% shares of the estate accordingly in the final distribution. HTH.

P.S. If the Halifax cheque means that you've received a substantial share of the inheritance a bit early, you might want to consider making a similar interim payment to the other main beneficiaries when the cash assets in the executors account allow (while retainining enough in there for any outstanding debts of course).

getmore4less

This is not a grey area the legal right to administer is established by the will having a named executor.

AuldYin

I have just opened an executor account with Royal Bank of Scotland. A cheque book has been issued with my name printed on it and I have paid in cheques made out in the name of my late uncle. I specifically checked that cheques made out in either his name or mine would be acceptable, the answer was "yes". I have not yet completed probate and RBS did not require any details about probate arrangements when opening the executor account, just a copy of death certificate and the will.

g6jns_2

getmore4less wrote: »

This is not a grey area the legal right to administer is established by the will having a named executor.

Your selective quoting is misleading. The naming of an executor in a will does just that. It does not come into effect until the testator dies. An executor does not have full powers unless the estate is very small or they have obtained probate.

BobQ

getmore4less wrote: »

This is not a grey area the legal right to administer is established by the will having a named executor.

In practical terms the advisability of spending money received by the estate before the Grant depends on the beneficiaries of the estate. If it just you and your sister and she trusts you then you are probably safe as long as you have evidence of what you have done. I say this because the only person likely to complain is your sister. Of course the bank providing the executor's account may have additional restrictions.

If your sister is likely to object to you doing this then it is probably best to wait for the Grant.

g6jns_2

BobQ wrote: »

In practical terms the advisability of spending money received by the estate before the Grant depends on the beneficiaries of the estate. If it just you and your sister and she trusts you then you are probably safe as long as you have evidence of what you have done. I say this because the only person likely to complain is your sister. Of course the bank providing the executor's account may have additional restrictions.

If your sister is likely to object to you doing this then it is probably best to wait for the Grant.

Exactly! The law is often less that black and white.

netlon

Thank you for your advice so far.

To add to my original post, I do have a letter from my sister giving her permission for me to act on her behalf.

To reiterate, access to the funds is only required at present to cover expenses outside of funeral costs.

g6jns_2

netlon wrote: »

Thank you for your advice so far.

To add to my original post, I do have a letter from my sister giving her permission for me to act on her behalf.

To reiterate, access to the funds is only required at present to cover expenses outside of funeral costs.

I don't see that you will have a problem. The difficulty is when people bend the rules for nefarious reasons.