Advice on planning for Probate

Fozzie_Bear

My elderly mother is receiving palliative care at home and is now declining. Her husband, my father, passed away 5 years ago. No inheritance tax was payable on his death as my parents had set up a Discretionary Will Trust. Probate for my father was fairly straightforward and I still had access to their bank account etc to pay bills as my mother survived him and was joint account holder. I have LPA in place for both Finance and Health & Welfare but understand these cease immediately on death.

We have rationalised my mothers savings pots over the last year so that she only has three. A Building Society account (for which I have exercised LPA) a Barclays Current Account (which I have TPA [third party access] )and the remainder of my fathers cash savings was put into Premium Bonds for my mother in her name. She also has a fully paid up house with no mortgage  valued at over £450k at a guess.
My questions are:
1) I know that the LPA's ceases immediately on death of the donor. However does TPA on the bank account continue or is the account also effectively frozen?
2) Probate can take several weeks to obtain and months to execute. Do debtors like LA Council Tax, Energy Companies bills etc have to wait for payment until probate is sorted?
3) What about expenditure that accrues after death e.g. Immediate costs associated with securing and maintaining the property until sale. Also funeral costs. If there is no funeral plan do the Funeral Directors have to wait or do the family have to settle the bill.
4) Finally I am trying to plan for this. Is it sensible/ethical/legal with all the families knowledge to transfer some of her savings into one of my accounts (or set one temporarily) to pay for the essentials above.
Any advice would be very much appreciated.

RAS

The funeral director will send the bill direct to the bank for payment.

You may have over-rationalised the accounts. Check the value in the Barclays account as they will release £50k to the executors without probate. Are you the executor?

But the discretionary will trust may well make your situation more difficult  

Fozzie_Bear

Thanks for the reply. Yes I am an executor. There is only £3K in the current account and £5k in the building society and circa £18k in premium bonds. She had two other small building society accounts which only had a few hundred £s in each and her own Barclays current account with a similar amount. I merged the two bank accounts and closed the two small building society accounts because she was spending from all over the place.
Barclays have confirmed that TPA like LPA will cease on death and all standing orders, direct debits, online banking and the account will be frozen until they receive  some forms back from me. Because of the low balance in the account they don't need probate.
I am interested to know what the discretionary will trust makes things more difficult. On my father's death his half of the estate went into trust for her to use to live. I expected to use a solicitor to deal with probate rather than trying to deal with the inheritance tax side. I just wanted to see if it was ethical/legal to transfer a small amount out of her savings to deal with day to day bills without the family having to cough up.

TonyMMM

As executor, dealing with council tax and utilities is quite straightforward .....just inform them and they will put the accounts on hold ( assuming the property is not still occupied by someone else).

Sarahspangles

In three months since my MIL passed away we’ve put about £1500 net through a joint current account she held with my OH.  He and family beneficiaries are clear it’s ‘her’ money and are using it as the Executorship Account.  It’s definitely worthwhile keeping it all separate from your own accounts.

That spend is despite her having a funeral plan.  Utilities will wait, and Council Tax is likely to issue a credit and you then have an exempt period.  But we have had costs to apply for probate and to look after the property - vacant property insurance, plus things like extra lagging as the garage isn’t getting much heat from the house, and some costs to ready it for sale.  

Fozzie_Bear

Thank you Sarahspangles. That's exactly why I was asking advice . Was your partner a Joint account holder with your Mother In Law? If so it might be different to my circumstance as I only have Third Party Access i.e. a person agreed by my mother to access her account and act on her behalf. Barclays say I will lose that as soon as she dies.

JGB1955

Barclays have confirmed that TPA like LPA will cease on death and all standing orders, direct debits, online banking and the account will be frozen until they receive  some forms back from me. Because of the low balance in the account they don't need probate.



Upon sight of a death certificate (and signing of a disclaimer) Barclays will transfer your MIL's funds into an account of your choice within days.

Sarahspangles

Yes, they converted it back into a joint account by adding OH, which worked well for MIL as FIL who passed away first always did the ‘admin’. It’s been really convenient since MIL died as it’s provided a single, but separate ‘pot’ for all the transactions (the ‘sadmin’). In your scenario the credit balances for things like TV Licensing might have to go into the frozen account but you’d have a separate Executors Account for other transactions related to the Estate. All you are doing is setting it up in advance, rather than doing so by presenting the Will at a bank branch. Obviously, good records are essential in case of challenge. The fact it still feels a bit ‘dodgy’ (at least it does to me) is probably proof of honesty!

Fozzie_Bear

JGB1955 Upon sight of a death certificate (and signing of a disclaimer) Barclays will transfer your MIL's funds into an account of your choice within days.

Thank you. I wasn't aware of that process.

Fozzie_Bear

Sarahspangles said:

Yes, they converted it back into a joint account by adding OH, which worked well for MIL as FIL who passed away first always did the ‘admin’. It’s been really convenient since MIL died as it’s provided a single, but separate ‘pot’ for all the transactions (the ‘sadmin’). In your scenario the credit balances for things like TV Licensing might have to go into the frozen account but you’d have a separate Executors Account for other transactions related to the Estate. All you are doing is setting it up in advance, rather than doing so by presenting the Will at a bank branch. Obviously, good records are essential in case of challenge. The fact it still feels a bit ‘dodgy’ (at least it does to me) is probably proof of honesty!

Many thanks, I think I need to pop into a Branch (if I can find one that is still open) and have a discussion with someone face to face.

RAS

That may not be the most useful option. Ring and speak to their bereavement department, who know, rather than counter staff.

They may be prepared to accept scans, or may need a wet signature. Ask.