Wife inheriting deceased husbands ISA

thetalhofer31

Hi, first time posting (hopefully in the correct thread)

My Dad recently passed away and I’m attempting to sort out his estate on behalf of my mother. I am the executor of his will and will shortly be applying for Lasting power of attorney (my mother wants me to organise her finances, something my Dad used to do)

As it stands my Dad has nearly £70000 in an ISA, and my mother has £86000 also in an ISA.

I am aware that it is possible for my mother to inherit dads ISA or the amount my dad had in an ISA becomes a one off increase in my mothers yearly isa limit.

Does this mean I have to transfer his actual ISA into a new ISA set up for my mother. An ISA with a different bank would be needed as she already has too much money with one bank.

Or could I close dads ISA and transfer the money wherever my mother wants it and then open a new ISA for her and put £70000 into it.

Is there some kind of legal form I need for this inheritance ISA/APS

I already feel like I have a mountain to climb and all this ISA business is getting me down, if anyone can provide some clarity it would be much appreciated. Thanks in advance.

Linton

See https://www.gov.uk/individual-savings-accounts/inheriting-an-isa-from-your-spouse-civil-partner#:~:text=If your spouse or civil,their ISA when it's closed

It looks like you could do either of your options - talk to the ISA provider.

thetalhofer31

Cheers, I have read that. Going by what it says I can close my dads isa, transfer the money to anywhere my mother wants, then before april my mother can open an isa and put £70000 in it. Jobs a good un. 

However I doubt it is that simple.

masonic

It is not quite that simple because ISA managers are not required to accept APS. This means that in practice there are a limited number of providers that can be used for this, and often they specify the money must be paid into a designated 'APS ISA'. Once in there, the account can be treated as a normal ISA and transferred anywhere else.

eskbanker

thetalhofer31 said:

Cheers, I have read that. Going by what it says I can close my dads isa, transfer the money to anywhere my mother wants, then before april my mother can open an isa and put £70000 in it. Jobs a good un. 

However I doubt it is that simple.

There's no need to act before April, the additional subscription isn't specifically aligned with this or any other tax year and can be made up to three years after the date of death.

https://www.gov.uk/guidance/manage-additional-permitted-subscriptions-into-an-isa goes into a reasonable amount of detail, albeit from the ISA manager's perspective....

silversand

I did a doubletake when I read your post as in so many ways it could have been me that wrote it. I'm currently going through the same, and I felt exactly as you did at the beginning. I think I've just about got my head around it now, if my understanding is correct (which I hope it is cos otherwise I've messed up!)

Who is your dad's ISA with? Your mum inherits the ISA *allowance* not the ISA so it will need to be closed regardless, but has to be done the "right" way and into an APS ISA. Once there you are free to do what you want with it.

My dad had an ISA with Coventry and they were great - they made is so easy, but they only deal with their own accounts. Nationwide & Santander are two that offer APS ISAs for anyone; mum and I have an appointment with Santander next week to deal with the non-Coventry ones that I can currently access (haven't done probate yet and a couple of his ISAs are being "held to ransom" in the meantime). Nationwide will send forms, Santander require a branch appointment which is why I ended up going with them - apart from the fact he had a larger amount with Santander, I wanted the extra support and "hand holding" to (hopefully) make sure I get it right.

Rusty190

I've recently negotiated this head scramble too so, please accept my condolences both for your bereavement and for this additional upset.

The starting point is to notify Dad's current ISA provider of his death followed by a conversation with your mother regarding what she wants to do with both the funds themselves and her inherited allowance.

Some providers have on-line "account holder has died" forms that you can complete and send in - many of them also have "Bereavement teams" who will also help to point you in the right direction.

Copy of death certificate and/or probate documents (if they are needed/available) are usually required - part of the head scramble of all this is that while there are "principles" common to all , the way in which each financial organisation deals with it , does vary, sadly.

If Mum does want to reinvest ISA funds into another ISA, just to pick up on a couple of things from @silversand's post - Nationwide say in their APS ISA pamphlet:
"If you want to use your inherited ISA allowance with Nationwide, the amount you can use can only come from any ISA your partner held with us. Sorry, but we can't accept any allowances from any other providers", so unless your dad's ISA was with Nationwide, that won't be available to your Mum.

Santander do offer APS/Inherited ISA's but their interest rates are paltry : 0.55% I believe just now.

I was so brain befuddled with it all, I moved all funds to  an NS and I Direct ISA, Inherited allowance account : currently paying 2.15% interest.
The down side, for me, was, when I then wanted to transfer some of the balance out to another ISA provider for a better interest rate, I discovered that NS and I didn't allow partial transfers out - so it was all or nothing.
NS and I were also painfully slow and any dealings with them involved hanging on the end of a phone forever, to get to speak to someone.
They were equally slow when the time came to transfer out.

I eventually moved  all funds  to Skipton Building Society : (currently paying 2.25% on an APS/inherited ISA) and from there, was able to partially transfer out. 
I had good service from Skipton and they do at least, have an online messaging service which is helpful.

Good luck with it all.

Marmaduke123

I too found Skipton very efficient and helpful regarding the process of moving my late husband's ISA money into their inheritence ISA. 

Have you got probate? I needed this before I could withdraw the money from my husband's ISA and close his account. The receiving ISA provider will ask the existing one to confirm the APS amount after the account has been closed.

I followed these steps:

Notified the ISA provider of my husband's death
Obtained probate (only needed for this in my case, everything else joint)
Closed ISA and received funds into my bank account
Opened Inheritance ISA with the Skipton and gave them details of my husband's  ISA - provider, account number etc
When I received notification from the Skipton that they had received confirmation of the APS amount I transferred the funds into the Skipton ISA.
A few months later transferred this ISA out for a better interest rate

No rush at all to deal with this. It was the last thing I did.

TiVo_Lad

Marmaduke123 said:

No rush at all to deal with this. It was the last thing I did.

This is very sound advice. When your head is in a spin dealing with so many things after a bereavement, it's important to remember that the money isn't going anywhere. Prioritise the important things and then get to this sort of thing when you have the time and the head space.

thetalhofer31

Just had a chance to sit down and read all your replies, thanks everyone. I have a path to follow now. looks like Skipton could be the place to look at. 

Marmaduke123 said:

I too found Skipton very efficient and helpful regarding the process of moving my late husband's ISA money into their inheritence ISA. 

Have you got probate? I needed this before I could withdraw the money from my husband's ISA and close his account. The receiving ISA provider will ask the existing one to confirm the APS amount after the account has been closed.

I followed these steps:

Notified the ISA provider of my husband's death
Obtained probate (only needed for this in my case, everything else joint)
Closed ISA and received funds into my bank account
Opened Inheritance ISA with the Skipton and gave them details of my husband's  ISA - provider, account number etc
When I received notification from the Skipton that they had received confirmation of the APS amount I transferred the funds into the Skipton ISA.
A few months later transferred this ISA out for a better interest rate

No rush at all to deal with this. It was the last thing I did.

Really appreciate this, those steps are what i will attempt to follow. Just need to obtain probate and start the ball rolling.

thetalhofer31

Just thought I would post an update on this now that everything has been sorted. It may help others who find  themselves in a similar position to me. Thanks again to those who kindly replied.

This was my sequence of events. (I had already informed Dads Isa bank he had passed away)

Step 1

Applied for and received probate (took about 7 months)

Step 2

Luckily there is a local Skipton branch near to where I live, so my me and my Mam visited the branch in person, the staff were great, explaining everything that needed to be done. We filled in the APS form and set up Mams Skipton legacy Isa. I was told that Skipton would contact my Dads Isa holder (Hampshire Trust Bank) to clarify the APS amount and let me know when they had received this from Hampshire.

This turned into a small drama, I didn't hear anything for 3 weeks, so I contacted Skipton who said they were still waiting for Hampshire Bank to reply. So... I contacted Hampshire, they said they had not had any communication with Skipton.

This to-and-fro went on for a further two weeks until Skipton threatened Hampshire Bank with legal action if they continued to withhold the APS amount. Like I said all very dramatic, to be fair to Hampshire Bank I just don't think they had any idea what Skipton and myself were talking about. Each time I spoke on the phone to them nobody had heard of an inherited Isa, legacy Isa or an APS amount.

Eventually Hampshire Bank new the game was up so relinquished the APS amount to Skipton. I received a letter from Skipton confirming they had the APS amount.

Step 3

Transferred my Dads ISA (in full) from Hampshire bank into my Mams main bank account.

Step 4

Transferred the money to Mams Skipton Legacy Isa, strangely (for me anyway) Skipton would not allow electronic money transfer into this account so Mam and me went to the branch and wrote a cheque out.

Step 5

The money stayed in the Legacy ISA for a few months then luckily Skipton had good rates on Fixed ISAs so transferred the money out of the Legacy Isa to a better 1yr Fixed rate ISA.

I might add that during all this my Mam didn't have a clue what I was talking about, even my elder brothers eyes would glaze over every time he heard me utter the dreaded words "Legacy Isa". I will say though, of all the things financially I have had to sort out after Dad passed away this inherited Isa malarkey has been the most stressful convoluted thing.

I'm just pleased it all worked out in the end and I think my pa would be proud of me