managing estate funds before probate

bunnygo

I would expect this to be obvious, but it does not seem to be!

This is 'second death' so all bank accounts will freeze. Still bills to pay apart from funeral expenses. Apparently executor accounts cannot be opened without a grant of probate, which as we know takes months. Some money can be released if below the threshold for each bank. Executors are geographically separated, and in practice only one is handling the estate. How does this work - are executors expected to pay from their own funds?

Rodders53

What bills?
Many - utilities, council tax, etc.,. will wait until probate is granted and funds become available if informed of the death... via specialist Bereavement Customer Service teams.
Same goes for other debts:  they should be told "you'll have to wait until Probate is granted and we have access to the funds to settle". 

One doesn't absolutely need an Executor Account (it's just easier to keep any monies separated from the Executor's own and avoids potential issues if an executor dies before distribution can happen). 

Are executor(s) also residuary beneficiaries?  If so then using one's own money (and keeping record for reimbursement) can make things 'easier' --- e.g. for paying the Newsagent, window cleaner and gardener type bills.

AIUI a simple estate where probate application can be done online doesn't take all that long (albeit a few months) as long as one is careful with the forms and calculations.
  

BooJewels

What I've done - and suspect most who have been executors here have done the same - is open a separate current account and just put any estate funds that can be released into that and use it to pay out any expenses.  Just keep good accounts of everything you do and keep estate monies totally separate from your own.  I'd finished one estate and fully distributed, when was needed to do another, so just used the same bank account.  It might be useful when opening the account to ask them to note that it's for an estate and give the deceased's name - just in case any settlements come in the form of a cheque made to 'executors for . . . ' - I had one like that for a small amount and the bank allowed me to pay it in at the counter, as the account had his name already noted.

Executor accounts are only worth doing for complicated or very high value estates or where multiple executors might need to work together, perhaps if there are trust issues etc. as they come with practical limitations - and not many banks offer them now.  They tend to require all parties to attend in person to open one and they have restrictions, such as they maybe don't allow on-line access or need joint signatories on cheques etc.  I've not heard of the need for Probate to just open one - I didn't open one initially, as it was during the first big Covid lockdown and travel restrictions precluded it even being possible for both executors to attend - so the bank advised against it.

Flugelhorn

I just got a second current account with my bank and it was named as "Exec of..." - had online access and a cheque book. 

Agree re utilities and debts being  made to wait - the only one that seemed to not go for this was house insurance so I just paid it 

p00hsticks

Agree with the others - assuming that you are happy to have a joint account with the other executor, or can agree with each other for just one to handle the finances), then just set up a separate personal account to handle the estate money.

 If you can get some cash released without probate then put that into the account and use that to meet any bills, or if there is not enough cash available either - if you can afford it  - put some money of your own in to be reclaimed later as expenses or contact the companies involved (via their specialist bereavement team if available) and ask for bills to be put on hold until money is available from the estate (bear in mind that this might generate additional interest charges and/or result in the bills being passed to their debt collection companies). 

The main thing that needs to be sorted ASAP if there is a now unoccupied property is insurance - I found that when contacted the existing insurers were willing to allow the current policy to continue to the end of term, although with additional conditions (e.g. all valuables and electronics removed from the property etc). If unoccupied you should get a Class E council tax exemption until 6 months after probate is obtained.

BooJewels

I personally didn't find that utility suppliers etc. were that accommodating in waiting for Probate to come through for payment - other than the water company (same one for both estates with a property) and they had a very good bereavement department who couldn't have been kinder.  British Gas said I didn't need to pay until the property sold, but sent red reminders for bills, then debt collection people - so I just paid as I went along as there was money in the pot to do so. 

The council waived CT until 6 months after Probate and they are clearly informed when that is granted, as I got an email from them about it the same day I got the Grant in the post - only a few days after it went through. I was waiting for the grant to arrive, to scan and send it to them, but they beat me to it by a few hours. They were decent to deal with too.  But I found that most were, if you were decent with them.  If you ring up making demands, you'll be met with resistance, it's just human nature, but when you're reasonable with them and ask how best to manage matters etc. you'll get the same in return.

I echo what @p00hsticks about insurance, if there's a property - ensure that you inform them and meet their endorsements - no point in having insurance if it ends up invalid when you need it.  Thankfully, I never had to claim, but living away from empty properties, meant I slept that bit better for having it.  With one property, I had to take new unoccupied property insurance, that was rather expensive, the other property continued to be covered by the incumbent insurer, with some endorsements/conditions - heating on a min temp on the thermostat, valuables removed, weekly checks etc. 

bunnygo

thank you for all these helpful replies. This is a bit 'mix and match' - the current probate situation has no property, but I'm thinking ahead to the next one which may have. Having already done one application, I found it much easier knowing what to consider in advance. Much appreciated and now I know what to do when the time comes.