Joint accounts

Daisymaisy

My father made me joint account holder on two Santander accounts while we looked at getting power of attorney which in the end we did not have time to put in place. The money in the accounts was all his and I was only on the accounts in case he couldn't make it to the bank. In the end I did not have to do anything at the bank, I didn't activate my debit cards or use the accounts at all. The aim was not for this money to come to me as the estate is to be divided equally between my two siblings and I.

My understanding is that if the accounts were purely for convenience they still form part of the estate, does this mean that they would still be within the scope of the will and not outside of it? How would this work in practice? What are Santander likely to do when I notify them, will they just put the accounts in my name or freeze the accounts including direct debits and lock me out of them ? I am executor of the will so will still be able to get access to the account information.

I have no intention of taking more money out of the estate than my siblings. Can I be removed from the accounts now that my father has passed away leaving them solely in his name or is it too late for this now?

To complicate matters my brother was living with my father but unemployed and with no means of supporting himself. He has since applied for benefits etc and is looking for employment. He is waiting for his benefits to come through so still without means. He is still living at my father's house. The situation is a bit like a house of cards, if I tackle one thing it impacts everything else:

The household bills are paid from the 2 santander accounts above so 2 months worth of bills have been paid by direct debit using estate money.

I have yet to notify Santander and the utility companies of my father's death. The council are aware as we used the tell us once service and are waiting on me to tell them what is happening with the property.

I do not want my brother to find himself in debt before he has even started to get his life back together but also understand that I need to sort things out as soon as possible.

As executor will I be able to account for the slight irregularities of the money paid out and make the necessary adjustments to what each beneficiary is entitled to from the remaining money in these accounts? Meaning my brother will get less than my sister and I as the house bills for staying in the home will fall to him.

I feel quite confident dealing with things but fear putting my foot in it and causing my brother hardship which my father would not have wanted and is not warranted as the estate has plenty of money just not instantly accessible.

Sorry it's so long winded but hopefully you will be able to reassure me that I am making a mountain out of a molehill and offer some advice on how to tackle this situation which is causing me a lot of anxiety.

getmore4less

Read the first part

Joint accounts for convenience are the property of the estate.

Even if they were gifts to share the money chances are they are within 7 years and still part of the estate.

Paper exercise to document unless spouse exemption applies.

(multiple threads will get confusing)

Keep_pedalling

Either transfer the money to whatever other account you are holding the estate’s other assets in then close it or use this account as the executors account and close it after you have distributed the estate.

The bank will not be interested in the finer details of why the account was joint or who the beneficial owner of the money was.

xylophone

Your father provided all the money in the accounts and therefore although in joint accounts, the money should be reported as his on the IHT forms.

However, in general, the money in joint accounts is generally regarded in banking terms as wholly owned by both parties, passing by survivorship on the death of a joint account holder. Thus, strictly speaking, the money in the account becomes yours to deal with as you see fit. Usually joint account holders are advised of this on opening the accounts.

I do remember from many years ago in a post on another forum, a case where a widow with stepchildren (after the bank had explained the position and despite the explanation), chose to put all her cash (much of which came from a late husband) into accounts with her only child with the late spouse - this son had full access (as is usual with a joint account). Apparently there had been some understanding with the late spouse that assets would be shared between all the children on the second death and her will was made on this basis.

When she died, because the joint accounts passed by survivorship to one child (so could not pass under the will), there was a prolonged legal dispute.

If these were standard joint bank accounts, when Santander is advised of the death, (judging by recent experience with Barclays), they will remove the name of the deceased and may issue new cheque books in your sole name. The Santander Bereavement Guide (you can download) says

Products held in joint names
For all products held in joint names the account
is amended into the name of the surviving party
(except for Investment products – please see the
Santander investments section for more details).

Otherwise the accounts will continue, with DDs etc being paid - of course it is for this reason that married couples often have a joint account for household bills purposes.

You will wish to check all DDs/SO etc to see if any need to be cancelled.

You might choose to use the money in these accounts (which will come under your control) to pay for the funeral, the flowers, the after service reception, any inheritance tax, other expenses associated with probate.

You can then decide how to proceed with the balance.

You might choose to transfer it to the Executor's account which can be opened once you have probate.

xylophone

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm15042

The above will be of interest.

Savvy_Sue

We had this situation: Dad opened a joint account with one of us, Mum with another. On each death, the sibling simply passed the funds back into the estate.

If the bills on the house are currently being paid from this account, and you want that to continue, tell Santander that Dad has died, and start keeping meticulous records of what goes in and out of that account. If you are the sole executor, you could try to get the name changed to 'executor of'. If there's more than one executor, you could get their name added to the account: will almost certainly require a visit to the bank with ID, but can't see why it wouldn't be possible.

Daisymaisy

Thank you all for your replies so far it is much appreciated.

Savvy_Sue - Glad to find someone who has experienced a similar situation. How did you pass the funds back to the estate, did the bank not transfer the accounts automatically to your and your sibling's names?

xylophone

How did you pass the funds back to the estate, did the bank not transfer the accounts automatically to your and your sibling's names?

I am rather puzzled by this question.

If you are asking again about the joint accounts in the names of you and your father, see my post 4 above. You can download the Santander Guide to Bereavement where it covers joint accounts as cited in post 4.

If you are asking about sole accounts, it seems that you have already told the banks where these are held about your father's death

https://forums.moneysavingexpert.com/discussion/comment/76763660#Comment_76763660

I have informed all the banks that even where the amount is below their need for a grant of probate I do not want the account closed until I have the grant at which time I will collect all the money together and put the house on the market.

Once you have probate, you can open an executor's account


and request the banks to transfer the money from the sole accounts to the exor account.

You could then transfer money from the joint accounts to the exor account.

Tom99

Depending on the amount of cash in the account you might want to do a deed of variation to share the money with your siblings.
At the moment the money is outside you fathers estate for probate purposes buy wholly inside for IHT purposes.
The money in the account is now yours, so sharing it will count as a gift and a PET as far as your own estate and IHT is concerned.
Depending on the other gifts you have made you have a £3k allowance this tax year, can carry forward last year's £3k and could wait til April 6th to transfer another £3k so there would have to be quite a bit in the account (say £13,500+) before you need to consider a DOV.

Daisymaisy

Tom99 wrote: »

Depending on the amount of cash in the account you might want to do a deed of variation to share the money with your siblings.
At the moment the money is outside you fathers estate for probate purposes buy wholly inside for IHT purposes.
The money in the account is now yours, so sharing it will count as a gift and a PET as far as your own estate and IHT is concerned.
Depending on the other gifts you have made you have a £3k allowance this tax year, can carry forward last year's £3k and could wait til April 6th to transfer another £3k so there would have to be quite a bit in the account (say £13,500+) before you need to consider a DOV.

Tom99 this is the way I understand it, the money is now my property and has passed outside of the will so I cannot understand by which mechanism I can transfer it to the Executor's account without it affecting my estate for the next 7 years. HMRC probate and IHT helpline advised that a DOV would not work as joint accounts pass by survivorship and outside of any will so varying the will makes no difference. Maybe if the DOV varied what I get from the will i.e. X amount less than my siblings to take into account the extra I have already received.

Sadly, the amount is in excess of my full gift allowance for last year this year and next year combined. I will however be able to use the money to pay for executor expenses funeral etc and claim back from the estate reducing the amount I'd have to 'gift' to my siblings if it comes to that.

Hoping Savvy_Sue might get back to me with how she handled her situation.

Xylophone - Thanks for the link, I have spoken with HMRC and as expected I have to declare the accounts 100% as my father's money (no problem there) i.e. part of his estate for IHT calculation but that the money is now mine having passed outside of the will and would be seen as a gift should I split it three ways and give my siblings their share. They advised that I cannot use a DOV to put the money back under the remit of the will as it has passed wholly outside of the will.

There is precious little out there on how to rectify this situation bearing in mind that in most cases the problem is that the person receiving the money does not generally want to give it up leading to disputes which is the opposite of my situation.

Keep_pedalling

Daisymaisy wrote: »

Tom99 this is the way I understand it, the money is now my property and has passed outside of the will so I cannot understand by which mechanism I can transfer it to the Executor's account without it affecting my estate for the next 7 years. HMRC probate and IHT helpline advised that a DOV would not work as joint accounts pass by survivorship and outside of any will so varying the will makes no difference. Maybe if the DOV varied what I get from the will i.e. X amount less than my siblings to take into account the extra I have already received.

Sadly, the amount is in excess of my full gift allowance for last year this year and next year combined. I will however be able to use the money to pay for executor expenses funeral etc and claim back from the estate reducing the amount I'd have to 'gift' to my siblings if it comes to that.

Hoping Savvy_Sue might get back to me with how she handled her situation.

Xylophone - Thanks for the link, I have spoken with HMRC and as expected I have to declare the accounts 100% as my father's money (no problem there) i.e. part of his estate for IHT calculation but that the money is now mine having passed outside of the will and would be seen as a gift should I split it three ways and give my siblings their share. They advised that I cannot use a DOV to put the money back under the remit of the will as it has passed wholly outside of the will.

There is precious little out there on how to rectify this situation bearing in mind that in most cases the problem is that the person receiving the money does not generally want to give it up leading to disputes which is the opposite of my situation.

No it does not form part of your estate, although the account is in your name it is not your money (even if the bank think it is) you are over thinking this and worrying about nothing.

I can assure you that HMRC do not trawl through all people’s accounts when probate is submitted. If you have been keeping records of all previous non exempt giving, just add a note (or a copy of the estate accounts) to those regarding the money you were holding as an executor so you executor is aware of it to cover the highly unlikely chance that HMRC decide to investigate your estate.

All my mother’s estate ended up in an account in my name before I distributed to the beneficiaries.