FSCS protection for estate funds

chiny

I'm currently executor for 2 estates, one of which I'm running myself, the other is being done by a solicitor. This has the side effect that I get advice on process for one, which is applicable to the other.

I recently was advised that "it is good practice not to distribute the estate until... 10 months after Grant of Probate... because... claims [by others]".

OK, so what do I do with the money meanwhile ? I'd need 8 accounts to shelter it all in FSCS-protected, sub-£85k accounts, even if I could find so many executor accounts, preferably paying interest. Maybe I need insurance in the event of a bank going bust and beneficiaries suing me.

Marcon

What have you been doing with the money until now?

chiny

Up until now, I have collected £90k having only recently tipped over the £85k. A house sale (not my main residence) is due for completion on Friday, which will be a big boost to funds - hmm, maybe I could "abandon" the money to my conveyancing solicitor for the 7 remaining months pre-distribution of the estate

Marcon

chiny wrote: »

Up until now, I have collected £90k having only recently tipped over the £85k. A house sale (not my main residence) is due for completion on Friday, which will be a big boost to funds - hmm, maybe I could "abandon" the money to my conveyancing solicitor for the 7 remaining months pre-distribution of the estate

Why not? You (or rather the estate) will be entitled to the return on funds held on the client account on your behalf.

Margot123

I have previously 'stored' estate funds with NS&I. The full sum is protected as it is government-run.

Plus their Direct Saver account is easy access (although funds have to be in the account a minimum 14 days before you can withdraw them).

Keep_pedalling

Temporary large holding, such as depositing the proceeds from a house sale is covered, but for safety NS&I is the best home, as you are covered up to £1M.

Holding on to it for 10 months after probate seems somewhat over the top though. Have you place notices in a local paper and th3 London Gazette?

chiny

NS&I is an interesting idea but would they permit executor accounts ? I'll have to grub through their T&Cs. I can't afford any disturbance to my own tax position holding others' (probate) funds.

I understand that temporary large holdings are covered only for a "main residence"; says the FSCS web site. 10 months is advice from an long-standing, high street solictor's firm (something to do with time to claim & file by objectors).

Local paper, no - new to me. London Gazette, not yet - am awaiting the words re the other (solicitor administered) estate.

Margot123

chiny wrote: »

NS&I is an interesting idea but would they permit executor accounts ? I'll have to grub through their T&Cs. I can't afford any disturbance to my own tax position holding others' (probate) funds.

I understand that temporary large holdings are covered only for a "main residence"; says the FSCS web site. 10 months is advice from an long-standing, high street solictor's firm (something to do with time to claim & file by objectors).

Local paper, no - new to me. London Gazette, not yet - am awaiting the words re the other (solicitor administered) estate.

I don't think they permit executor accounts as such, but then there is actually no reason to have one in the first place. What I have done is open the account in my own name but 'name' the account as 'Estate of ??? ??? Deceased'.

Providing you keep your own money separate from the estate funds (even if you are to eventually benefit from them), that should suffice.

If there are any HMRC 'questions' re tax, then this easy to explain via a paper trail. I must say, I haven't experienced this. It has been very straightforward.

Brynsam

chiny wrote: »

I'm currently executor for 2 estates, one of which I'm running myself, the other is being done by a solicitor. This has the side effect that I get advice on process for one, which is applicable to the other.

I recently was advised that "it is good practice not to distribute the estate until... 10 months after Grant of Probate... because... claims [by others]".

The 'advice on process' doesn't necessarily apply to the both estates. If you ask the solicitor why it is 'good practice', you are likely to get an answer relating to a claim for financial provision under the Inheritance (Provision for Family and Dependants) Act 1975.

There is a strict time limit of six months from the grant of representation or probate within which to bring any such claim, but in reality, if you knew the deceased person well and have access to their bank records, it should be pretty straightforward to work out if any such claim is likely. If the financial records don't show they have been paying out regularly to support a third party, a claim for support simply because someone has died is unlikely to succeed.

Margot123

Brynsam wrote: »

.................There is a strict time limit of six months from the grant of representation or probate within which to bring any such claim, but in reality, if you knew the deceased person well and have access to their bank records, it should be pretty straightforward to work out if any such claim is likely. If the financial records don't show they have been paying out regularly to support a third party, a claim for support simply because someone has died is unlikely to succeed.

A good explanation of what happens in reality as opposed to what a 'professional' will tell the bereaved in order to gain their business.

A large percentage of estates will be much simpler, cheaper, and quicker, to administer without the help of a professional person.

chiny

Margot123: sounds a pragmatic solution and the current account is already named in that way. I had in my mind that any account, no matter how "named", that is still in my name/control with no mention of "Executors" and if the account earns interest, then it reflects on my personal tax position, not the estate tax position. This could be too much worrying.

Brynsam: I can envisage the disinherited (not in the will), independent (not supported) offspring being some kind of problem, albeit not a peep so far and hence my needing to be sure.