Rental income post death

Inadilemma

Hi, My mum sadly passed away and has left behind a couple of properties of which she received rental income. As the bank accounts get frozen following death what happens with the rent from those properties? Can they still be payed into a frozen account. I’m the executor but guess nothing can be touched until everything is settled which will no doubt take months.

Any advise gratefully received.....thanks

Yorkshireman99

Inadilemma wrote: »

Hi, My mum sadly passed away and has left behind a couple of properties of which she received rental income. As the bank accounts get frozen following death what happens with the rent from those properties? Can they still be payed into a frozen account. I’m the executor but guess nothing can be touched until everything is settled which will no doubt take months.

Any advise gratefully received.....thanks

Talk to the bank and arrange for an executor’s account that the rents cable paid into. You also.need to tell the tenants the ne bank details. The estate will need to do an income tax return. Who gets the rent depends on the exact wording of the will.

Inadilemma

Thanks, that makes sense. Can the funds in that account be accessed in the event of any repairs needed or lease costs etc?

Flugelhorn

I would think that if they are paid into an executors account then the executor could access the funds for expenses related to the estate. Need to make sure that very good records are kept though.

Berkshire_Beancounter

Having lost a parent and parent in law in the last year, I found that both of their current accounts (Santander and Lloyds respectively) both allowed the accounts to continue to receive payments in (not that we received any but we were told in principle that was the case).

Lloyds even went further and allowed existing direct debits to continue, so the utility payments continued to be paid until the property was sorted out. But it was made clear that was only for pre-existing direct debits, not ad hoc payments.

So depending on the bank, you may find you can still have the rental payments made in to that account, but check as every bank seems to have different processes.

As to whether you could use the funds in the meantime; I would be doubtful that you could. Banks would allow a very limited type of payment to go out before probate was granted e.g. paying funeral bills. Depending on the amount in the bank account and the bank's own policies, you may be able to close the account and receive the funds without probate, or you may need to get probate - but then you'd still need to ask the tenants to pay into a new account.

Either way I don't think you could continue to maintain the account with payments both in and out, unfortunately.

Flugelhorn

Berkshire_Beancounter wrote: »

As to whether you could use the funds in the meantime; I would be doubtful that you could. Banks would allow a very limited type of payment to go out before probate was granted e.g. paying funeral bills. .

It really does vary by bank I think, I was given an exec's account at RBS and the funds not requiring probate were transferred straight in, I was given a cheque book, debit card and online banking - all within 3-4 weeks of the death. Certainly helped as was a few more months before I could access other funds after probate. In retrospect I may have been more fortunate than it seems others are with the banks.

It was a much less complex estate than the OP is dealing with - i think where there are other properties and income streams it would be different

Berkshire_Beancounter

Flugelhorn wrote: »

It really does vary by bank I think, I was given an exec's account at RBS and the funds not requiring probate were transferred straight in, I was given a cheque book, debit card and online banking - all within 3-4 weeks of the death. Certainly helped as was a few more months before I could access other funds after probate. In retrospect I may have been more fortunate than it seems others are with the banks.

It was a much less complex estate than the OP is dealing with - i think where there are other properties and income streams it would be different

Interesting....I was surprised at how much variation there was between banks in terms of what they would and wouldn't allow on a deceased customer's account. IIRC, Santander had a limit of something like £50k before they required probate to release funds, far more than I would have expected. Yes, you may indeed have been fortunate, but I guess it's something very few of us ever consider when opening a bank account - how easy would it be for our executors to deal with the account once we're gone!

badger09

Berkshire_Beancounter wrote: »

Interesting....I was surprised at how much variation there was between banks in terms of what they would and wouldn't allow on a deceased customer's account. IIRC, Santander had a limit of something like £50k before they required probate to release funds, far more than I would have expected. Yes, you may indeed have been fortunate, but I guess it's something very few of us ever consider when opening a bank account - how easy would it be for our executors to deal with the account once we're gone!

Indeed.

Both HSBC & NS&I said for over £5k, Probate might be required but NS&I released over £11k without it.

Santander's limit is £50k, but they released the funds by faster payment on the day they received Probate.

Aldermore required Probate regardless of the amount involved, and sent funds by cheque 10 days after receiving it.

A consistent approach would make the whole process easier.

nom_de_plume

Inadilemma wrote: »

My mum sadly passed away and has left behind a couple of properties of which she received rental income.

What does the Will say with regards to these properties?


If they are specifically left to someone(s) in the Will the rental income from DoD goes direct to the beneficiary(ies) and falls outside of the estate.

Inadilemma

So if a property is empty and You’re the beneficiary are you able to rent the property before everything is done as this will no doubt take months? Thanks