Does he need to prove why money was spent?

breaking_free

Hi all.

Asking for my partner as I'm trying to take some of the burden off him dealing with his mum's death and probate. He is the executor and sole beneficiary.

Mum's estate will definitely be under the inheritance tax threshold. 

In the year before mum died he was her carer and had access to her ATM card to do shopping. He was also doing up her newly bought house before she moved in - plastering, painting and so forth. He kept all the receipts for the materials purchased using her card and she was paying him to do the work. Additionally she gave him money to keep him going as he wasn't working while looking after her. 

To put a rough figure on it, in the year leading up to her death mum paid out perhaps £4000 for materials and his house-fixing labour, plus around £10,000 that could be classed as gifts, though really she was paying him to be her live-out carer.

Even though he has receipts for materials he is wondering how closely the probate service will look into all the bank withdrawls he made on her behalf? As the estate will be below IHT I assume they won't bother looking at bank withdrawls, but he wants more certainty on where things stand. Can anybody assist?
Thanks everyone.

Mojisola

breaking_free said:

Asking for my partner as I'm trying to take some of the burden off him dealing with his mum's death and probate. He is the executor and sole beneficiary.

Mum's estate will definitely be under the inheritance tax threshold. 

Even though he has receipts for materials he is wondering how closely the probate service will look into all the bank withdrawls he made on her behalf?

As he is the sole beneficiary and assuming that the estate will be well below the threshold (and not just under it as a result of the money spent on the house), who would be interested it? 

Marcon

breaking_free said:

Hi all.

Asking for my partner as I'm trying to take some of the burden off him dealing with his mum's death and probate. He is the executor and sole beneficiary.

Mum's estate will definitely be under the inheritance tax threshold. 

In the year before mum died he was her carer and had access to her ATM card to do shopping. He was also doing up her newly bought house before she moved in - plastering, painting and so forth. He kept all the receipts for the materials purchased using her card and she was paying him to do the work. Additionally she gave him money to keep him going as he wasn't working while looking after her. 

To put a rough figure on it, in the year leading up to her death mum paid out perhaps £4000 for materials and his house-fixing labour, plus around £10,000 that could be classed as gifts, though really she was paying him to be her live-out carer.

Even though he has receipts for materials he is wondering how closely the probate service will look into all the bank withdrawls he made on her behalf? As the estate will be below IHT I assume they won't bother looking at bank withdrawls, but he wants more certainty on where things stand. Can anybody assist?
Thanks everyone.

If the estate is under the IHT threshold, and would still be under the limit if the £10K gifts (in practice probably £7K, given the annual gift exemption limit of £3k) are added back, not sure what he's worrying about. He's the sole beneficiary and executor, so nobody else is going to be bothered about the status of the cash given to him by his mother.

Keep_pedalling

The probate office do not do financial checks on the deceased persons accounts. Even if an IH.t return was required HMRC will only investigate a tiny number of returns.

breaking_free

Keep_pedalling said:

The probate office do not do financial checks on the deceased persons accounts. Even if an IH.t return was required HMRC will only investigate a tiny number of returns.

This is certainly good news. So to be really clear (because I know he will fret if I don't ask) will any organisation / body other than my partner have oversight of mum's bank statements? He hasn't yet informed the bank of her death but when he does, will anybody there be looking into the withdrawls (some withdrawls took place after mum died).

Thank you all so much for your input.

ETA Actually I have a question myself! Eventually I'll shuffle off this mortal coil and my own estate will be well above the threshold if I don't manage to blow it all on round-the-world cruises and moneytary gifts to friends. Regarding the £3000 per year gift allowance, if nobody checks the bank statements how would HMRC or anybody else know if I was giving all my money away? 

Sarahspangles

I think you might be mixing up powers of attorney with the responsibilities of executors.  She was probably breaking the ts and cs of her bank account by sending him shopping with her card but apart from that if she was able to take decisions he’s just a son helping his mum.  So there’s no need for record keeping or to account to anyone, so long as her estate isn’t liable for inheritance tax.

elsien

He shouldn’t be withdrawing money now though without telling them she has passed away. Why hasn’t he told the bank she has died? 

theoretica

breaking_free said:

Keep_pedalling said:

The probate office do not do financial checks on the deceased persons accounts. Even if an IH.t return was required HMRC will only investigate a tiny number of returns.

This is certainly good news. So to be really clear (because I know he will fret if I don't ask) will any organisation / body other than my partner have oversight of mum's bank statements? He hasn't yet informed the bank of her death but when he does, will anybody there be looking into the withdrawls (some withdrawls took place after mum died).

Thank you all so much for your input.

ETA Actually I have a question myself! Eventually I'll shuffle off this mortal coil and my own estate will be well above the threshold if I don't manage to blow it all on round-the-world cruises and moneytary gifts to friends. Regarding the £3000 per year gift allowance, if nobody checks the bank statements how would HMRC or anybody else know if I was giving all my money away?

If they notice, the bank may well be upset with him for making withdrawals from her account after she had died - but it will probably be cleared up with probate.

And for your second question - yes, there are many cases where if someone (here your executor) commits fraud (lies for financial benefit) they may not get caught.

Spendless

Unless he had POA he shouldn't have been withdrawing money from his Mum's account when she was alive even if she said it was ok. I doubt that will come to light though, since he is sole executor and beneficiary. If there were others they might query it. 

Regarding your other question, if you were to end up needing a care home, then the LA is likely to have a look at finances to see what you have/have given away if you require funding.  

Placitasgirl

To have handled things correctly your husband should have applied for a card for his Mum's account or perhaps for the account to be made joint so that he could access and use it for her. I'm assuming he didn't have Power of Attorney for Mum? He shouldn't have been using her card, even with her permission. 

Your husband must inform the bank that the account holder has passed away and should not have been making withdrawals after she had died. This may come to light when they are informed but I very much doubt there'll be any follow up in the circumstances.