Advice on planning for Probate

Mrs_Z

Fozzie_Bear said:

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.

From my recent experience of dealing with late friend's estate - this is how it went for me:

1) As soon as Bank is informed of the account holder's passing - they will freeze the account.
2) Council tax offered 1 year exemption for us I think it's called Class F exemption, or something like that, and was a huge relief for us.  Utilities will continue to charge but they will not chase the payments. Probate will be needed to deal with the property, but not necessarily for banks.  Halifax has £50k limit and anything under that, probate is not needed.  You will need to prove your executorship (certified copy of the Will for example) and they will then pay the funds to a nominated account.
3) Funeral costs can be paid by the Bank even if the account is frozen.
4) I did this.  In case of my friend's, I transferred a sum of £3k to my own account prior to informing the Bank (I had LPA for her). This was a life saver as far as stress levels were concerned.  I was able to pay for the funeral costs, place an advert in the Gazette, pay for the probate application, renew insurance for her property etc without having to dip into my own money.  It took few weeks for Halifax to unfreeze the account with the documentation but the probate itself took 5 months!!!

Whilst for no 4 is not really what you should do, if the family and joint-executors are in agreement, it will make your life much easier having access to funds to pay for immediate bills.  Stress levels will be high as you will be dealing with grief, organisation of funeral, possibly clearing out a property, applying for probate, informing companies of the person's passing, so that's one stress that you do not need.

Edit: Obviously if you go down this route (No 4) - you need to keep records and better if you keep the money is a completely separate account.

Fozzie_Bear

RAS said:

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.

I did speak to the bereavement team and was them that told me the account would be frozen and I would lose access until I returned the appropriate forms from Bereavement Pack with a copy of the death certificate. I wasn't confident he knew exactly what I was asking. At least if I speak to the counter staff they can make a phone call whilst i'm there and confirm one way or the other. I'm not sure at this late stage if I can be added to the account as a joint signatory without my mother being present?

p00hsticks

TonyMMM said:

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).

And if the property is unoccupied as a result of the death, then it is exempt from council tax anyhow until six months after probate has been granted or it becomes occupied, whichever is sooner. 

msb1234

Fozzie_Bear said:

RAS said:

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.

I did speak to the bereavement team and was them that told me the account would be frozen and I would lose access until I returned the appropriate forms from Bereavement Pack with a copy of the death certificate. I wasn't confident he knew exactly what I was asking. At least if I speak to the counter staff they can make a phone call whilst i'm there and confirm one way or the other. I'm not sure at this late stage if I can be added to the account as a joint signatory without my mother being present?

In my experience of dealing with both Barclays and Lloyds banks, the counter staff were unable to help me apart from making an appointment for their bereavement advisors. The Barclays appointment was 5 weeks after I went into branch!

SiliconChip

Mrs_Z said:

Fozzie_Bear said:

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.

From my recent experience of dealing with late friend's estate - this is how it went for me:

2) Council tax offered 1 year exemption for us I think it's called Class F exemption, or something like that, and was a huge relief for us.  Utilities will continue to charge but they will not chase the payments. Probate will be needed to deal with the property, but not necessarily for banks.  Halifax has £50k limit and anything under that, probate is not needed.  You will need to prove your executorship (certified copy of the Will for example) and they will then pay the funds to a nominated account.

Council Tax class F exemption could end up being 12 months (or potentially even more) but it's actually to a date 6 months after the date that probate is granted.

The water company is likely to not charge at all for an empty property (certainly the case for Severn Trent).

Probate is very likely to be required by NS&I, especially if the PB holding is more than £5,000.

bobster2

Mrs_Z said:

Fozzie_Bear said:

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.

From my recent experience of dealing with late friend's estate - this is how it went for me:

1) As soon as Bank is informed of the account holder's passing - they will freeze the account.
2) Council tax offered 1 year exemption for us I think it's called Class F exemption, or something like that, and was a huge relief for us.  Utilities will continue to charge but they will not chase the payments. Probate will be needed to deal with the property, but not necessarily for banks.  Halifax has £50k limit and anything under that, probate is not needed.  You will need to prove your executorship (certified copy of the Will for example) and they will then pay the funds to a nominated account.
3) Funeral costs can be paid by the Bank even if the account is frozen.
4) I did this.  In case of my friend's, I transferred a sum of £3k to my own account prior to informing the Bank (I had LPA for her). This was a life saver as far as stress levels were concerned.  I was able to pay for the funeral costs, place an advert in the Gazette, pay for the probate application, renew insurance for her property etc without having to dip into my own money.  It took few weeks for Halifax to unfreeze the account with the documentation but the probate itself took 5 months!!!

Future readers of this thread should be aware - there are legal problems with using an LPA to transfer money to a personal account before someone dies, to pay for later estate expenses. It's not an appropriate use of the LPA. Similarly, it would not be appropriate to use LPA access to transfer money after someone had died - but before informing the bank of the death.

Banks will pay funeral invoices directly - so this should not be a huge issue. I even found some insurers will continue an existing policy for free while you apply for probate. And the council will exempt the house from council tax if it's unoccupied while you're applying for probate.

Fozzie_Bear

bobster2 said:

Mrs_Z said:

Fozzie_Bear said:

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.

From my recent experience of dealing with late friend's estate - this is how it went for me:

1) As soon as Bank is informed of the account holder's passing - they will freeze the account.
2) Council tax offered 1 year exemption for us I think it's called Class F exemption, or something like that, and was a huge relief for us.  Utilities will continue to charge but they will not chase the payments. Probate will be needed to deal with the property, but not necessarily for banks.  Halifax has £50k limit and anything under that, probate is not needed.  You will need to prove your executorship (certified copy of the Will for example) and they will then pay the funds to a nominated account.
3) Funeral costs can be paid by the Bank even if the account is frozen.
4) I did this.  In case of my friend's, I transferred a sum of £3k to my own account prior to informing the Bank (I had LPA for her). This was a life saver as far as stress levels were concerned.  I was able to pay for the funeral costs, place an advert in the Gazette, pay for the probate application, renew insurance for her property etc without having to dip into my own money.  It took few weeks for Halifax to unfreeze the account with the documentation but the probate itself took 5 months!!!

Future readers of this thread should be aware - there are legal problems with using an LPA to transfer money to a personal account before someone dies, to pay for later estate expenses. It's not an appropriate use of the LPA. Similarly, it would not be appropriate to use LPA access to transfer money after someone had died - but before informing the bank of the death.

Banks will pay funeral invoices directly - so this should not be a huge issue. I even found some insurers will continue an existing policy for free while you apply for probate. And the council will exempt the house from council tax if it's unoccupied while you're applying for probate.

Thank you Bob for highlighting a possible legal issue with an LPA. Do you know if the same applies to TPA (Third Party Access) to a bank account? This was set up by the bank so I was a signatory on the account and could pay bills etc. I am not a joint account holder though.

Mrs_Z

bobster2 said:

Future readers of this thread should be aware - there are legal problems with using an LPA to transfer money to a personal account before someone dies, to pay for later estate expenses. It's not an appropriate use of the LPA. Similarly, it would not be appropriate to use LPA access to transfer money after someone had died - but before informing the bank of the death.

"Future readers of this thread should be aware - there are legal problems with using an LPA to transfer money to a personal account before someone dies, to pay for later estate expenses. It's not an appropriate use of the LPA. Similarly, it would not be appropriate to use LPA access to transfer money after someone had died - but before informing the bank of the death."

This is completely correct, and I don't recommend going down this route by any means. However, in our case, it was done with the agreement of beneficiaries, and receipts kept for any expenditure. As soon as the bank released the funds to a nominated account, the balance was transferred there too. 

To the OP re: third party access. Whilst you would still have access to the account (ie. for example on-line) - you would not be able to make any transactions as when the account gets frozen, no money can go in or out, it is effectively blocked.  This is my understanding but check with the bank.

carlh30

Hi, New to this forum so please be kind!

Looking at this thread (original poster) it is almost identical to my set up. Lost my Dad in 2021, all estate passed to mum (who is now sadly on downward spiral). I have had to learn a massive amount recently. I am the same bank as mum and have Third Party Management of her account. This has been great, as can pay her bills, etc. I have full Health and Finance/Property LPA.

I am "future proofing". I know that the IHT bill on her estate will be considerable (over £500k). Currently, the money in her bank savings account can cover the bill we would need to pay HMRC in advance of probate. 

On her death, my Third Party Management will cease and I will have no means of paying IHT (the rest of the estate is property / shares). So, questions please:

1) Should (with my mothers consent) - apply for joint bank account - so that on her death, I have full control (and under LPA I will still act legally in the best interests, etc)

2) Will the bank allow payment of IHT from the frozen account? Along with all the rest of expenses, that i have no funds to pay!!

Thanks for any advice.

carlh30

Actually just found this - which pretty much covers the "Joint" account aspect:

Are there inheritance tax implications when a joint bank account holder dies?

HMRC asks detailed questions about joint accounts on the inheritance tax return, which is submitted as part of the application for probate or letters of administration when someone dies.

Whilst HMRC may not be too concerned about the ownership of joint accounts held by spouses or civil partners (as such transfers would be exempt from inheritance tax), they will look more closely at accounts held by others, such as unmarried couples and parents and children.

Rather than simply assuming each account holder is entitled to an equal share of the funds, HMRC usually treats account holders as owning a share of the funds which is proportionate to their contributions to the account. For example, if one account holder provided all the funds, the whole balance of the account will be treated as belonging to him or her on death, and potentially subject to inheritance tax.