Banking arrangements for joint executors - is this arrangement acceptable?

BooJewels

I'm a joint executor and beneficiary with my sister, dealing with a deceased account at Santander - no other interested parties.  I've spoken to them but not yet registered death - their only option is to close the account and stop all DDs etc.and then transfer funds out to a nominated account.  As we still need to manage the house - pay utilities etc.until it sells, I would prefer to keep the account for that purpose - but it's just not possible.  Neither of us intend to access any money until the house is sold and everything comes to a conclusion - maybe a year or more hence - I'm just doing Probate and IHT forms.

What format of operating an 'estate' account is acceptable practice - as Santander don't do executor accounts?  Due to the current virus situation and a husband Shielding, I can't get out to visit banks to open accounts and my ID is far from ideal for opening new accounts anyway. I can't even sit alongside my sister to do that together, which in normal times we would do so without hesitation.

I have a back up personal account with Santander that I don't use routinely (no DDs/payments in etc), just keep a bit in for emergencies.  So I can move the modest funds from  there into the associated savings account to empty it of my own money and move the estate funds into there when the deceased account closes - trying to move DDs etc. before I do that, to keep the house powered, insured etc. and operate it as an estate account.  But don't really like that arrangement for various reasons.  It'll be in my name and my sister won't have access.  I'm sure we can work that from a practical basis as anything she needs to pay for I can transfer funds to her - but I worry about the additional cash movements - when you read so many horror stories about moving funds around, banks freezing accounts etc.  The situation between my sister and I is perfectly amicable - we split duties between each other and each take on different roles.  I've already managed the deceased account for over a year under an LPA.

Are there any legal pitfalls that might arise if only one of us has access to the estate funds in this manner?

NinjaTune

I know that Barclays won't let you open an Executor account without Probate.  This seems a bit chicken and egg when they say I can obtain the funds from my Dad's Barclays account without Probate but can't open an Exec account without it.  Go figure.

What you are proposing sounds okay to me as there is little alternative at present.  If you are paying the direct debits from that account then there should be little need to be transferring funds to your sister anyway.  All necessary bills from the Estate can be made from that account.

Banks are happy to transfer funds from a deceased customer's account into the account of a Joint Executor (they don't split the funds between 2 people) so I don't see why there would be any legal issues.

Not sure how easy it would be to make it into a joint account at present.

xylophone

Perhaps you might use your existing spare sole account with Santander from which to pay the household DDs, regarding those monies as a loan from you to the estate.

You might then ask Santander simply to freeze your father's account (no payments in or out) until you have probate.

Perhaps your sister would agree "power reserved" to enable you to deal with probate.

It is likely to take a few weeks to get probate and by that time, it could well be possible for you to open an executor's account with a bank that offers them - you might try Natwest.

You would then transfer the money from your father's frozen account to the exor account.  From this you could then repay yourself for the money  you laid out on the bills for your father's property.

You could also transfer money from the exor account to your spare account in order to keep paying the  bills for the house.

The exor account would also pay any bills relating to the sale of the property etc and receive the proceeds of  its sale.

You would then be able to transfer out your sister's share and your own and then close the exor account.

BooJewels

NinjaTune said:

I know that Barclays won't let you open an Executor account without Probate.  This seems a bit chicken and egg when they say I can obtain the funds from my Dad's Barclays account without Probate but can't open an Exec account without it.  Go figure.

What you are proposing sounds okay to me as there is little alternative at present.  If you are paying the direct debits from that account then there should be little need to be transferring funds to your sister anyway.  All necessary bills from the Estate can be made from that account.

Banks are happy to transfer funds from a deceased customer's account into the account of a Joint Executor (they don't split the funds between 2 people) so I don't see why there would be any legal issues.

Not sure how easy it would be to make it into a joint account at present.

You're right, that sounds like an odd arrangement with Barclays, in respect of Probate.  

It's possible that my sister may need to pay some items, as she lives near the property and I don't - for example, it will be her that picks up the Will from the Solicitor.  She has some cash - we each have a little, for out of pocket expenses (all accounted for, entered on the IHT forms and arrived at by selling some items), but some things, like the death certificates, had to be paid for by card when she was on the phone to them.

I did outline my proposal to Santander - all anonymously - and they said they had no issue with the arrangement I was suggesting.  We agreed, that in the current environment, trying to tie a few loose ends up first did save them a job and would be acceptable, as long as my sister was in total agreement.  I might, if we go that route, get her to put it in writing, to be on the safe side.

ETA:  I don't want to make it a joint account with my sister, purely because it's already a joint account with my husband.

BooJewels

xylophone said:

Perhaps you might use your existing spare sole account with Santander from which to pay the household DDs, regarding those monies as a loan from you to the estate.

You might then ask Santander simply to freeze your father's account (no payments in or out) until you have probate.

Perhaps your sister would agree "power reserved" to enable you to deal with probate.

It is likely to take a few weeks to get probate and by that time, it could well be possible for you to open an executor's account with a bank that offers them - you might try Natwest.

You would then transfer the money from your father's frozen account to the exor account.  From this you could then repay yourself for the money  you laid out on the bills for your father's property.

You could also transfer money from the exor account to your spare account in order to keep paying the  bills for the house.

The exor account would also pay any bills relating to the sale of the property etc and receive the proceeds of  its sale.

You would then be able to transfer out your sister's share and your own and then close the exor account.

That all sounds unnecessarily complicated to be honest.  I'm actually trying to simplify it if possible - I've already got enough on my plate at the moment.  Opening a new account is one of the things that may be problematic, otherwise I'd just do it and move the closed deceased account contents to a new executor account from the outset.  I can't leave the house and don't have good ID for opening accounts anyway. 

The alternative to that would be for my sister to do the opening and control the money, but she'd prefer me to do it.  She already has things to do locally that I can't, so it makes sense for me to manage the finances, as I can do that remotely - and have done so for about 18 months now, whilst he was in hospital for a while, then later in care.

NinjaTune

I would definitely get email/written confirmation from your sister that she is happy with the arrangement, just to dot the i's and cross the t's.

Not sure how much Santander are releasing into the account but the main issue I can see now is that it's a joint account with your husband which, technically, means he also has access to the money.  I appreciate he is unlikely to drain the account and run off with the milkwoman but it might potentially be viewed as an issue in terms of protecting the Estate.  

Re: your sister's expenses, as long as you're not sending lots of small amounts on a regular basis then I don't think there will be a problem.  So, if she just buys a couple of books of stamps, obviously don't transfer that amount to her.  Wait until the expenses tot up to around £50/100 to limit the amount of transactions.

Once you are able to open an Executors account, allowing for the current situation, I'd go ahead and do so ASAP.  I'm guessing the problem with ID is no photo driving licence or passport?  Such a PITA if so.  I had the old style paper driving licence for many years after the photo ones were introduced and ended up applying for a passport just so I'd have photo ID.  Haven't been abroad for nearly 20 years! 

BooJewels

NinjaTune said:

I would definitely get email/written confirmation from your sister that she is happy with the arrangement, just to dot the i's and cross the t's.

Not sure how much Santander are releasing into the account but the main issue I can see now is that it's a joint account with your husband which, technically, means he also has access to the money.  I appreciate he is unlikely to drain the account and run off with the milkwoman but it might potentially be viewed as an issue in terms of protecting the Estate.  

I will get written confirmation - I had a text from her last night saying she'd been thinking about it some more and thought it was the best solution at the moment.  So I'll formalise it better.  She already has a joint account with the deceased, which will revert to her, with about the same amount in, so we each have control of the same sized pot, so there's mutual trust there.

It's not a huge amount, a fraction of their Probate threshold. I'll be happy if it's enough to fund the house for the time it takes to sell.  It might not, so there's nothing spare to dib into. As it happens, I doubt my husband could even find the account (his card is kept in the safe - I could give it to my sister, for her assurance) and he already has money of his own that I control, so I'm much better positioned if there's any running off to be done.  (Hmmm . . . . gets calculator out to see if it'd be worth it . . . .)

Re: your sister's expenses, as long as you're not sending lots of small amounts on a regular basis then I don't think there will be a problem.  So, if she just buys a couple of books of stamps, obviously don't transfer that amount to her.  Wait until the expenses tot up to around £50/100 to limit the amount of transactions.

As mentioned earlier, she already has cash for incidentals, we both have and have done for some months - she just tells me when she spends anything and I put it in the accounts.  In fact when we did an audit before lockdown to check what we had in accounts, cash etc. tallied with the records I'd kept, we'd both ended up out of pocket slightly - as we record things over-cautiously.  We both feel very strongly that it still isn't our money and just assume that we're going to have to explain ourselves one day - not quite sure who to.  I've got about 30 quid in a separate purse in my handbag of his 'walking around' money and have had for some time and I wouldn't even buy an ice cream with it.  I know my sister feels the same.

 I'm guessing the problem with ID is no photo driving licence or passport?  Such a PITA if so.  I had the old style paper driving licence for many years after the photo ones were introduced and ended up applying for a passport just so I'd have photo ID.  Haven't been abroad for nearly 20 years! 

Yep, don't got abroad and don't drive. I think my last trip overseas was about 28 years ago. I intended getting a passport for exactly this eventuality, but didn't get to it.  I don't know anyone who could countersign one for me.  That's the peril of living like a hermit.

badger09

IMHO the simplest solution would be for you to open a new Everyday current account with Santander in your sole name. This will be solely for use in connection with the estate. I would not use an existing sole account, and definitely not an existing joint account. 

That is exactly what I did as Executor for my late sister's (much more complicated) estate in 2018. There was no need for additional ID as I was already known to them.

Initially I funded it with money from my personal account, to cover immediate estate expenses. Once funds started flowing in, I refunded myself. I also kept a detailed spreadsheet of income & outgoings, clearly noted. I had all DDs for utilities, house insurance etc set up on that Estate account and all the financial institutions I dealt with were happy to transfer Estate funds into it, both before & after Probate was granted. From that account, I also refunded any expenses paid by others. This kept everything totally separate and clear. 

I offered to send monthly scans of the statements to my co-executor who had reserved powers, but he didn't need them (my niece's husband, so total trust within family). You could do this for your sister so she is always in the loop.
Following the house sale and after final distribution to the beneficiaries, I allowed 3 months in case I'd overlooked anything (I hadn't!) then transferred the account to cover the very unlikely event of any further payments arriving. Nothing did.  

BooJewels

badger09 said:

IMHO the simplest solution would be for you to open a new Everyday current account with Santander in your sole name. This will be solely for use in connection with the estate. I would not use an existing sole account, and definitely not an existing joint account. 

I hadn't even thought about the implications of it being a joint account until I posted it yesterday.  It was a long term Giro account that was recently resurrected and was a solo account for a long time.  But we made it joint fairly recently, as there was no reason to have a back up account if only I could use it.  I'm going to try opening a solo/executor account with either my usual household account bank or Santander.  It might just be easier to keep it separate.  Then there's the option, as soon as it's convenient, to get it made joint with my sister.

I did just try using their automated system to open an account, which might have been okay, but it asked a lot of questions that just weren't relevant and some I simply couldn't answer and couldn't progress without doing so.  So I've asked for a call back to speak to a human.  I don't want initially to ask Santander, as that will identify me and as the deceased account is already under my control, will identify it and close it before I've set things up better - moved DDs etc.

The irony is, my sister really doesn't care, as my husband is effectively her brother, she's known him since she was 12 and she finds the idea of him being able to access the account to steal money as laughable as I do - her first question when I raised it was "does he even remember that you have that account?" to which I had to say 'no, I doubt it'.  We've also given him modest gifts for work he's done, like some commission on selling the car, where he did a lot of work - and he won't spend it.  It's still in an envelope in the safe.

AnotherJoe

I think people are making this too complex. 

As you and sis seem to be on very good terms, *and are the only beneficiaries*, you could do what my brother and I did. We just split the bank account money 50/50 immediately (so in your case move it into this joint account And then send sis half) and then each time one of you spends some money related to the process, whoever spends it gets reimbursed half immediately by the other.  

In our case for example my brother took over household Utilities of my mums flat And council tax, I paid the solicitor for selling her flat, and probate fees and so on. And each spend was made by one of us and same day the other sent half that to whoever spent 

This means no need to keep accounts, reconcile spending blah blah. And if ever anyone did want a record (not sure who that would be) it would be relatively easy to trace since each bill would have a corresponding payment between us for half that. and so, when the final money came in from sale of house I sent him half and it was done. No big reconcile, no possibility of getting it wrong, we'd been reconciling as we went. 

Which leads me to second point you might wish to consider, although we were both named as executors, I became sole executor, he reserved powers which meant only I needed to sign everything legal. This was pre Covid, in these times this could be even more useful to you. 

BooJewels

As you say @AnotherJoe - I'm not entirely sure who it is that I'm worried about keeping happy about this.  Does anyone check on such matters - does anyone else even care?  Are there mysterious estate-management Police?  HMRC will have their two-penneth worth up-front with the IHT forms, so apart from his solicitor, who would even know. 

And yes, we do get on well enough that there won't be any issues.  We fall out over really stupid stuff, never important matters.

I wondered about the sole executor thing - but in respect of Probate, my sister has access to the solicitors who have the original Will, so I have to print, sign and send the forms to her anyway, to send everything off together.  Not sure there would be much needed signing until a house sale - and we have way too much to do in the house before that's a possibility.  Hence wanting to keep an account to keep the house running costs separate, as it will need to be funded until that time.  Hence I would have just liked to keep the original account, with everything intact but they insist it can't be done.  I don't really want it in the same account as my own household expenses.