Final accounts

Bolt1234

I work 3.5 days a week and also have a good private pension from previous employer. I took voluntary redundancy 4 years ago and also took the 25% lump sum so am comfortably off.  

Income is just under £50k.   I old enough for State Pension yet!

Bolt1234

I think I will leave the final statement of accounts.  If siblings ask for it I will put something together.  One sibling definitely won’t ask for any sort of breakdown and the other is just grateful someone is sorting all of this out with them not having to do ANYTHING at all.

JamesRobinson48

I claim no expertise. But I suggest it would be advisable, in your own best interests, to produce estate accounts, to send them to residual beneficiaries, and also (if possible) to have such beneficiaries sign off on the estate accounts as well as signing receipts for cash distributions they have received.  

You may think this could all be done at a later date if anyone asks for it, but what if you yourself were to unexpectedly die or become incapacitated?  Your siblings seem to be very trusting, but what happens if one of them dies, and their own beneficiaries (a wife or daughter for example) later ask questions about the inheritance?

Also, bear in mind the text on GOV.UK:
HM Revenue and Customs (HMRC) can ask to see your records up to 20 years after Inheritance Tax is paid. 

I feel the government's evident interest in executors needing to prepare estate accounts is motivated more by protecting its tax revenues than by protecting your siblings.  Just for example, if you don't have proper estate accounts ready to hand, how would you prove that HMRC received from the estate all of the tax that was due on income or capital gains that arose between the date of death and completion of the administration?

IMHO, in your case all the circumstances point in favour of your ensuring meticulous compliance. First, the estate is a substantial one. Second, you are the only executor and your siblings live abroad, so the burden of any unexpected future tax or penalties might fall on yourself only.  Third, consider the possibility that at some stage (and it might be years in the future) the HMRC might wish to question or contest the eligibility of the arrangement that you made to mitigate £450k inheritance tax.  Again, and sorry to be morbid, you might yourself be dead by the time any of those things come up, so you might be saving everyone involved some future cost and effort if you can ensure they all possess a comprehensive set of records.

Bolt1234

Thank you.  You are of course correct regarding the various scenarios.  The Probate application went via a solicitor. The vast majority of the money circa 70% was via Triple Point Shares and the house had been sold a few years before death. 

HMRC are ridiculous re 20 years tbh.  They can check and ask me anything they like about the application but 20 years on would be daft but HMRC have their own issues don’t they.  Yes, I know any mistakes on payments will be mine.  Siblings don’t have any children.  One is single and never married and the other is married with step children who don’t know their step mum has it.  We claimed via the Business Rate Tax Relief which I believe has been going since 1970’s.  To go back on this now would cause complete chaos.  The other thing and I guess I would say this - if a company/government dept does something wrong and decides the rules and policies they made is wrong years and years later is plain wrong.  

i have already got the siblings to confirm the two significant lump sum payments have arrived which they have done  and of course there are bank account transactions.  Had to go into bank to do them too.  

I have been Power of Attorney for both parents.  Neither sibling thought it best left to me.  

Bolt1234

I will produce some accounts though.  I like the idea of a lump sum stating Incidentals.  Funeral costs were quite hefty though along with the travelling costs of sibling. Mine was £20 for four people!

H657

I’ve just finished the last payment on my mother’s estate (final HMRC payment for interest earned during administration period), like you my sister was happy for me to sort out probate/estate etc & i’d been looking after mum’s money under POA for the previous few years.

I’ve just done a very simple 1 page spreadsheet for the (admittedly simple) estate accounts showing mums 4 bank/investment accounts in columns across, and dated transactions in rows from each of them for every receipt/payment with the starting point being balance at date of death, with a simple note for each line (eg Funeral, orders of service, interest earned on account). Final line shows zero for each column as the estate distribution is included at the bottom.

I've done a similar spreadsheet with the 6 beneficiaries showing each dated payment.

I’m going to get my sister to sign them next time I see her & give her copies. The grandchildren each got a fixed sum, with the remainder (a significant sum) being split between sister & myself, so I’m not going to worry about the grandchildren signing it.
Can’t see HMRC ever coming back to us with any queries, but if they did at least I’m covered! 

Whilst mum was in her care home, my sister did all mum’s running around/shopping etc and I’d set up a monthly standing order from mums bank account with her agreement paying sister to cover “incidentals”, and then reimbursed sister for larger purchases/costs as required. Going forward, perhaps you could do this with your mum paying you something each month?

bobster2

Bolt1234 said:

I am sole executor for late Father.  Other siblings live abroad and have left the Executorship to me..  we are on very friendly terms and they have always left everything for me to do.  I agreed that I would run with Probate.  They have shown very little interest.  I offered weekly/monthly update calls during probate but there was no real interest in getting involved.  I did employ a solicitor and tried to get agreement to fund one but they basically told me to do whatever I needed to make my life easier.

Estate was worth over £1 m so we are not talking about insignificant amounts either.

Probate has been granted.

I have already distributed 70% of it and am waiting for bill from solicitor, then making the final payments.  Do I need to provide an itemised breakdown of every single spend over the last year.   I agreed with my Father and then with siblings that estate would cover my petrol costs as I didn’t live close to his care home.  I also ran his household accounts, was the single point of contact with care home etc.  

Basically is it a legal requirement of Probate to provide ALL spend?? I must stress neither sibling has asked for anything!  They are truly not interested but are very grateful with what I have done over the last 5 years.

I can of course do it but it’s going to take me blooming ages!

These were expenses when he was alive? Really these should have been paid to you at the time.

These are not expenses you've incurred as an executor of his estate (i.e. they are not estate expenses - they are an estate debt).

Essentially you are now a creditor - with a claim against the estate. So you would invoice the estate. In the same way that if a paid carer had been providing care while your father was alive - they would have provided an invoice.

You need to keep these two roles separate - the carer who invoices the person (and now the estate) and the executor who pays invoices.

As an executor you might have other expenses incurred legitimately since your father passed away - but these are a distinct matter and would be recorded differently.

Bolt1234

Thank you all as well for being so kind.  It hasnt been easy over the last 5 years and I now have Mum…

Bolt1234

Sorry, I wasn’t clear.  During my Father’s lifetime I had a debit card for his current account and used that for the petrol costs with the agreement of both my Father and siblings.  I was literally run ragged with it all at one time, driving 100’s of miles plus when I visited Dad in the care home in the early days he and I would go to lunch and he would pay.  He wanted to pay me for managing his life which quite honestly had turned into a horrible mess, think hoarder, no technical skills so everything on paper and many many bank accounts most of which he had lost track of.  I didn’t think paying me was appropriate.

We agreed in the end  he would pay for all my petrol.  I did try and run things by my siblings I.e when he needed an accountant to fill in his tax return and the costs associated with thst  but they showed little interest and just said do what you need to.

Bolt1234

I now run Mum’s household and again have a debit card.  I have set up direct debits as appropriate and pay all her bills.  Anything she needs she asks for and I use her bank card.  Same situation with siblings as my Father.  They are just letting me get on with it.