Inheritance Tax - Below Threshold

JohnM1984New

My mother has  very recently found out that she doesn't have very long left to live and has asked me to help he with her estate and after some advice. 

She currently doesn't own the property she lives in and currently does not have a will (she's currently in hospital so may be difficult to arrange).  She has a sum of approx £18K left between bank accounts (both with the same bank) which she wants to use to pay for her funeral and then the remaining amount split between the 4 siblings.  Over the last 2 years she has given all 4 children £5k each.  Her concern is that when she passes the money will be tied up until its all sorted.

Excuse my ignorance here but with the estate being such a low amount and there being no will wouldn't we just need to apply for grant of probate, value the estate and then provide the certificates to the bank or am i simplifying a complicated matter.  She wants to distribute the remaining money now and pay for a funeral up front so there is nothing left financially to sort but my thoughts are this will complicate matters as surely we will still need to apply for probate, value the estate etc anyway.

Thanks for any advice anyone can give - its be a sudden turn of events so apologies if this is all standard stuff.

JGB1955

I'm sorry for the situation that your family find themselves in.

The process is probably even simpler than you have suggested.  Probate is unlikely to be required.  Banks typically release funds of less than £50k upon sight of a death certificate and signing of an indemnity.  Banks will also be happy to pay the funeral director upon receipt of an invoice.  When my father passed away the proceeds of his Barclays Bank account were with me well within 10 working days.

Edit - contacting the bereavement department of the bank may be quicker/more efficient than speaking to your local branch.

FatherTireseus

I too am sorry for the sad situation you are in.

I was recently speaking to someone whose husband had died, and she had managed to deal with all of his estate without getting probate apart from one investment firm who was insisting on probate.  She found this odd especially as the amount involved was less than some other firms who had paid out without probate (although I think the firm did eventually decide she could have the funds without probate). 

I did a bit of digging and found that whilst a lot of advice about bereavement that you can find on the internet says you should apply for probate, it may not always be needed.  I helped my mum get probate for my dad's estate over ten years ago, and in hindsight I realised I don't think I needed it.  He didn't leave much cash although there was a house in joint names, but that's not an issue for you from the sound of it.  We needed to send a copy of the death certificate off to various places but I don't recall anyone asking to see the grant of probate.  My dad's bank did ask my mum to sign an indemnity form before releasing the cash to her, in the event anyone with a 'better' claim to the cash subsequently turned up.

A quick internet search threw up this article which lists the main banks and the amounts below which they don't require probate before paying out (although the article is a little over a year old so things might have changed a bit).

https://farewill.com/articles/when-is-probate-required

And as JGB1955 says, banks will pay out for the funeral cost on receipt of an invoice from the funeral director, so hopefully you won't find too much in the way of admin to deal with at such a stressful time.

Keep_pedalling

When the time comes you will not need probate, and there is no need to distribute the money now. Banks will release far higher sums than this without probate, and they will also pay funeral directors directly if needed. There is no need to distribute the money in advanced. Some people in you mother’s position find comfort in organising their own funeral so if she wants to sort that out in advance then I think that would be a good thing. 

thegreenone

I'm sorry to hear about your Mum's situation.  Please remember that although your Mum didn't own her property, her bills still need to be paid until the HA/Council/Landlord take the property back so don't distribute money until everything is finalised.  For the bank, take a Death Certificate to your local branch, they should deal with everything and send to their Bereavement Department.  Phone the Probate Office but you shouldn't need anything on that front.

getmore4less

FatherTireseus said:

.......

A quick internet search threw up this article which lists the main banks and the amounts below which they don't require probate before paying out (although the article is a little over a year old so things might have changed a bit).

https://farewill.com/articles/when-is-probate-required

just goes to show you can't believe everything you read on the internet.
from that link....

However, you may still need to apply for probate if the property was owned as tenants in common,

You don't.