Joint accounts

Savvy_Sue

We effectively followed Keep pedalling's advice: we treated the money as being part of Dad's / Mum's estate. I cannot remember how it was passed back to the Executor's account, whether by cheque or bank transfer, or just left in the now sole account and used to pay bills etc (in both cases this was the main bill-paying account). But the amount in it at the time of death was included in the calculation of what the estate was worth, and the money was treated as part of the estate rather than as the personal property of the sibling.

We were definitely not going to overthink small amounts of money, especially as if the sole account holder had themselves died very soon afterwards, we knew we could rely on whoever was dealing with their affairs to hand the money back into 'our' estate rather than treating it as part of 'their' estate.

Tom99

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.

The helplines are wrong, you can use a DOV to alter and inheritance via survivorship. Here is an extract from the Inheritance Tax Act 1984:

'S142 Alteration of dispositions taking effect on death.

(1)Where within the period of two years after a person’s death—
...(a)any of the dispositions (whether effected by will, under the law relating to intestacy or otherwise) of the property comprised in his estate immediately before his death are varied, or
...(b)the benefit conferred by any of those dispositions is disclaimed,
by an instrument in writing made by the persons or any of the persons who benefit or would benefit under the dispositions, this Act shall apply as if the variation had been effected by the deceased or, as the case may be, the disclaimed benefit had never been conferred.'

Note that the DOV varies the dispositions of inheritance not just the will, note the words 'or otherwise' ie outside a will/intestate rules.
Jointly help assets are often referred to as not within someones estate but this is not strictly true. They are part of the estate but not within that part of the estate which needs probate or is covered by a will/intestate rules.

xylophone

There is no dispute about the fact that your father provided all the money in the account.

For this reason, the money must be declared in full as part of his estate for IHT purposes.

As I mentioned in a previous post, it is true that control of the account passes to you by survivorship and the bank regards the money as falling to you by survivorship.

However, in view of the fact that all the money was provided by your father (you have stated that you do not and never have regarded the money as yours and that the accounts were made joint not to make you a gift of the money but for administrative convenience), it seems to me that the money should first be used for funeral costs/ payment of IHT/administrative expenses and the balance as part of the inheritable estate.

You could simply transfer the balance from the Joint (which will have become sole as explained in my post above) to the exor account (but this will then involve a transfer back to yourself as one of the beneficiaries), or more simply leave the balance in the sole account and account for it as part of your legacy.

You could make notes of the above with the records of administration that you will keep with your files so that it is clear that from the first you regarded yourself in the light of trustee/attorney for your father's money.

https://www.boodlehatfield.com/the-firm/articles/joint-accounts-whose-money-is-it/

The dispute to which I referred in my first post above centred round the fact that although the mother's will referred to legacies to her son's half sisters, she had placed virtually all her cash in a joint account with the son, and that with her full knowledge and consent he was able to access the account for any purpose, including his own spending.

Therefore for IHT purposes she was regarded as having made a large lifetime gift of at least half of the funds.

The half sisters were aggrieved because much of the money had been provided by their late father and they had been give to understand that the stepmother's will would take account of this (which in terms of the wording of the will it did - it was just that most of the money was in the joint account and fell by survivorship to
the son (which seems to have been mother's cunning plan....).

I can't remember how matters were resolved in the end - it was a very long running thread several years ago in another forum.