a few questions in advance of situation

Froglet

Since 2 close relatives have died in the last 3 years and being more involved in the process of a will being administered I was talking with my mum and sister yesterday and it got us thinking. I have followed all the questions on this board and it is very helpful,,,all of you who post are very helpful and wondered if you could advise now.

My Mum is 86,well enough now but we have to face the inevitable when it happens.She lives with my middle sister,and we have one other who,like me,lives elsewhere.She owns her own house,and has 1 bank account and 1 savings account.She has made a will leaving everything to be divided up between the 3 of us.My sister and I are executors and my youngest sister who lives further away is more than happy with this.

When Mum dies my sister who lives with her knows we will sell the house,she has M.E ,has not worked for years and so is unable to buy us out.She will rent somewhere small and in about 6 years will get a reasonable pension . We know we shall have to put the utilities in her name meanwhile and she will pay for what she uses,whereas there is a largish amount of money already put away for the funeral,house expenses such as insurance etc and the selling expenses connected with it. (This money is in my name so it can be obtained easily)

I believe we have to open an executors account for Mum's money and the house sale until it is distributed .I believe as there is a house involved we have to get probate,is that correct?.There will be no IHT due.As we 3 are more than happy with the arrangements and trust each other is it law that the money from the savings and the house sale HAVE to be put into a separate account first,or can they be put into the account I have for all expenses following her death? We shall not need to touch the moderate amount of savings that Mum has until the house is sold anyway.

Sorry for the long post,i just wanted to check if my knowledge is correct as it will fall mainly on me to sort everything out as although my sister lives with Mum she is not so capable physically and mentally to deal with all the stuff that follows a death.At a time when you are grieving,it surely is better to have some understanding of the proceedures involved.


Thank you .

Keep_pedalling

It is wise to have a seperate account to handle an estate but there is no law that says you have to have one.

While you are thinking ahead does you mother have a lasting power of attorney in place? If not get that sorted otherwise things can become complicated when people become incapacited. You and your sisters should do likewise.

Froglet

Thanks for your reply.Is the lasting power of attorney the most recent one or the older one.Yes we did get one arranged quite a few years ago.My Mum,bless her,is very kind to think ahead and make things easier for us.Without looking it up,I believe it is the one that helps with the financial affairs,not the health side of things

Keep_pedalling

The older arrangement was Enduring power of attorney, so that maybe that is what she has in place.

Tuesday_Tenor

Yes you will need probate in order to sell the house.

If the separate pot of money, in your name, is really Mum's money and you all acknowledge it as such, then as executors you include the value of this in her estate. However, you can legally gather and hold the estate assets in whatever form as you like:

You could
(A) pay funeral and immediate expenses from 'existing pot' , and transfer any remainder to executors account when it is set up.

(B) continue to operate two accounts, executors and 'existing pot', throughout process of dealing with estate until final distribution.

(C) try to get the 'existing pot' renamed as the executors account once probate is granted, but this may not be possible if it's a savings account (no cheque book for instance ...) or there may be issues about adding another signatory. And if you try to change it before probate they would try to 'freeze' it, thus voiding the very liquidity you have so carefully arranged. No, think it would just cause confusion at the bank. Forget this!

Think I'd go for (A) myself.

Banks will normally pay a funeral bill directly to the funeral director, even if an account is otherwise frozen while awaiting probate. Still, how heart-warming that Mum was thinking ahead to have the money put aside, and that you all trust each other. Would be the norm for most families, of course, but not all, as this board is witness to.

Oops! Typo! Originally typed 'exiting pot', which was rather apt, given that's exactly what it is!

Froglet

Tuesday_Tenor wrote: »

If the separate pot of money, in your name, is really Mum's money and you all acknowledge it as such, then as executors you include the value of this in her estate. However, you can legally gather and hold the estate assets in whatever form as you like:

You could
(A) pay funeral and immediate expenses from 'existing pot' , and transfer any remainder to executors account when it is set up.

(B) continue to operate two accounts, executors and 'existing pot', throughout process of dealing with estate until final distribution.

(C) try to get the 'existing pot' renamed as the executors account once probate is granted, but this may not be possible if it's a savings account, or there may be issues about adding another signatory.

(C) will probably just cause confusion at the bank. Think I'd go for (A) myself.

Banks will normally pay a funeral bill directly to the funeral director, even if an account is otherwise frozen while awaiting probate. Still, how heart-warming that Mum was thinking ahead to have the money put aside, and that you all trust each other. Would be the norm for most families, of course, but not all, as this board is witness to.

Oops! Typo! Originally typed 'exiting pot', which was rather apt, given that's exactly what it is!

Thanks for your detailed reply.Option B is probably the most likely,as we will be able to access the money for immediate ,and later,expenses.What is the main criteria that states you need to get probate as opposed to not ? Is it where a will leaves everything to one person who is that person's executor as well i.e. when my Dad died everything was pretty simple for my Mum to deal with.Or does it depend also on whether property is left to be dealt with ?

Froglet

Keep_pedalling wrote: »

The older arrangement was Enduring power of attorney, so that maybe that is what she has in place.

Yes I am sure that is what it is.I already deal with a lot of my Mum's expenses as I have a computer and she doesn't,thus getting better deals for gas and electric,telephone ,insurance,etc so am pretty clued up on her income and outgoings already.

Tuesday_Tenor

Froglet wrote: »

What is the main criteria that states you need to get probate as opposed to not?

Executors will need probate if the estate includes
- property
- shares
- a significant amount of money. When I was first an executor many years ago the threshold was a blanket £5000. Nowadays many banks will release funds upto £30,000 without probate, but the executor/recipient would have to sign an indemnity to accept liability that they are the correct person to receive the funds. So the threshold for 'significant' now rather depends on the institutions involved. There is no government-imposed threshold.

Your father's estate was probably simple, as a property owned as 'joint tenants' passes straight to the survivor and does not form part of the deceased's estate. Same applies for joint bank accounts. So possibly your father's actual estate (things in his sole name) was very small.

getmore4less

No need for executors account just decent records of assets and cash flow.

brewerdave

getmore4less wrote: »

No need for executors account just decent records of assets and cash flow.

Just sent off Grant of Probate to a number of institutions to recover my late mother's cash and it stated quite clearly on several of the claim forms that they would only pay to an executors or solicitors account.

PennyForThem_2

What about Inheritance Tax - is that a consideration at all?