Joint Bank account

andystot

I'm looking for some advice on a joint bank account that my late father set up with my sister. We are just starting the probate process for his estate and we are not sure what to do about this joint bank account.

The account was set up by my father to cover any costs when he died, my sister was made joint owner but to date has not made any payments or made any withdrawals from the account. The account has now been moved into her name now that my father has died and is not frozen like the ones he has just in his name. There is no dispute on the account it is still planned to share any remaining money from the account out equally amongst the beneficiaries. 

The question is because it is now in her name does it form part of his estate when estimating the value? and if it does can we still use the account to pay for things before we get probate, such as the wake?

If it doesn't form part of his estate, does it become part of my sisters estate and when she gives out what is left to the beneficiaries are these then considered as gifts from her estate?

bobster2

Normally for a married couple - you would consider 50% of the balance of the account on date of death to form part of the estate.

However, in a case like this - with an account set up specifically for this purpose - arguably the whole balance should be considered part of the estate.

https://www.accountingweb.co.uk/community/industry-insights/joint-bank-accounts-and-iht-the-tricky-bits

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

Keep_pedalling

Although the bank will treat this as your sisters money, all of it should be declared as part of his estate not 50%.

She can certainly use it to pay for estate expense such as his funeral costs. For future reference there is never a real need to do this. Bank accounts are frozen after death but banks have a fairly high limit on how much they will pay out to personal representatives before probate has been gained, and where those limits are breached they will still pay funeral directors costs from those accounts.

andystot

Thanks for the replies, really appreciate it as it does take a worry out of using the money. The whole value of the estate is below the tax threshold even including this account so it isn't an issue including it. 

thegreenone

I had a joint account with my late Mum for exactly the same reasons as your Dad. 

I had to declare who had put the money in (all Mum) and I used it to pay for the funeral (as Mum had requested) and the bills for her flat until it was sold.  It was classed as part of her estate but you can use the money.  Total at date of death is the key.

I made a basic Excel spreadsheet to show any income (tax and utilities credits) and expenditure (funeral, bills etc) which tallies with the account.  The account is still active within my banking so I have the proof of where money was spent, should the need arise but no-one has asked in the last 18 months.

Once everything was complete, I removed the remaining balance and paid the beneficiaries with cheques from my account.  I kept a record of cheque numbers etc.  The remaining balance became mine.