Fixed term savings in event of death

Acremead

As attorney I'm thinking of investing some of mother's money in a fixed term savings account which allows no withdrawals until term end. If she died mid-term would her executors have an automatic legal right to access the money immediately or would they have to rely on the institution's allowing it as a goodwill gesture?

alanq

A bigger issue if signing up for the long term would be whether mother has sufficient other funds to cover her needs e.g. should she need to pay for a care home.

There are signs that interest rates may finally be beginning to move upwards. If you commit to 5 or 7 years at current rates you risk missing out on better rates that may become available for shorter term savings.

I don't know the general answer to what happens on death. Some terms and conditions specifically mention this.

[Deleted User]

Acremead wrote: »

As attorney I'm thinking of investing some of mother's money in a fixed term savings account which allows no withdrawals until term end. If she died mid-term would her executors have an automatic legal right to access the money immediately or would they have to rely on the institution's allowing it as a goodwill gesture?

Check the T and C's of the account you are thinking of opening. Almost always you will find an exception to the "no access within the term" condition applying in the event of the death of the account holder, allowing her executor to close the account and distribute the funds to the beneficiaries. Don't accept this as read, though: check the T and C's before opening the account.

PeacefulWaters

Just check the T&Cs. It can vary by provider and account type.

Uxb

There is a school of thought that upon death all contracts are null and void as they are in the legal terminology "frustrated" as the deceased person does not "exist" anymore, and that all POA cease upon death.

I have never heard of any case when an executor has been unable to access monies - which in any case particularly where IHT is payable by a fixed date and hence probate must be obtained they are legally required to do so.

There maybe some cases where the monies are in an investment at a very favorable rate and the executor my choose to retain the investment and depending on what the will says seek to transfer its ownership to a beneficiary without it being sold (as in shares) or realised as in an investment account. While you can do this I know for certain with shares whether one could for an account at a bank/building society I'm less certain.

This is how you can usually get (for example) existing phone/BB contracts the deceased had terminated instantly as an executor without the estate having to pay any early-termination cancellation fees as would be normal....though I've heard a few mobile phone co's trying it on.