Executors/Administrators Bank Accounts - Why so difficult to open?

VKE

JGB1955 said:

Barkin said:

When my Dad died in 2022 I just used one of my "spare" personal current accounts, and kept impeccable records for everything. 

Likewise - as long as both/all executors agree, there isn't really a need for a specific Executor's account.  Some might suggest that, in the event of your early demise, the accounts become part of 'your' estate.  As long as you have kept good  records this isn't really a concern.

Like the two sets of comments above I used fa dormant zero balance account of mine making sure I kept receipts along with detailed tracking on and incoming and outgoing payments.

Hoenir

badmemory said:

 If you have been managing the finances for a couple of years then the London Gazette is irrelevant.  

As long as it's clearly understood that executorship is a legal responsibility and carries potential personal liability. For a small cost to the estate provides complete piece of mind. The whole purpose of the notification being to leave no stone unturned.  

badmemory

True but if the executors & beneficiaries are exactly the same people then the liabilities do not change.  Providing all executors understand their responsibilities then it is not a problem.  This is why I mentioned earlier about trust.  It would take something like an equity release arrangement being missed that would cause a problem.  The banks my mother had money with (well by that time it was money I had moved there for her) two did at that time do executors accounts but seeing the will both said why do you want one & where do you want the money transferring.

Hoenir

badmemory said:

True but if the executors & beneficiaries are exactly the same people then the liabilities do not change.  Providing all executors understand their responsibilities then it is not a problem. 

Risk is yours to take. The culture these days is for someone to blamed for anything that goes wrong. Families and money can be extremely devisive. All for the sake of a few £'s. 

Zanderman

I share the OPs frustration in the limitations and restrictions on Executors accounts - having had them with both Lloyds and HSBC.  Although the accounts have been, on the whole, functional and practical, they do have limits on what can be done and are never interest-bearing. Which is frustrating.

However I would agree with some of the comments about why should the banks offer anything better!  There's nothing in it for the banks - the accounts are short-lived ( a year or so at most usually), often have high balance only for a short time, don't purchase much (so no income from merchant debit card fees), don't borrow via overdraft etc (so no income from interest).

So it's not surprising they are not widely available. And not surprising they don't offer interest, as keeping any interest is the only way the bank can make money from the concept.

The expectation that banks should offer something seems based on the flawed assumption, often seen in these threads, that banks are some sort of public service with duties to provide the public with free (and profitable for the public) facilities.. They're not.

For my part, despite my frustration with the limitations of executors accounts (especially the lack of any interest) I've been fairly pleased that Lloyds and HSBC offer them, as they have made life easier, and meant that the balances haven't ever complicated accounts in my own name. 

If I were the OP I'd just open a spare personal account with HSBC to enable me to open an Exec account. Which is easily done. And I'd dial down my expectations! 

adwils

p00hsticks said:

JGB1955 said:

Barkin said:

When my Dad died in 2022 I just used one of my "spare" personal current accounts, and kept impeccable records for everything. 

Likewise - as long as both/all executors agree, there isn't really a need for a specific Executor's account.  Some might suggest that, in the event of your early demise, the accounts become part of 'your' estate.  As long as you have kept good  records this isn't really a concern.

Whilst true that in the event of your death the money would fall into your estate, it would be balanced by an equal and opposite debt owed from your estate to the one to which you were executor.

as to the headline question of why an executors account is so difficult to open - what's in it for the bank ? They probably see it as a a lot of paperwork for an account this is probably going to open for a relatively short amount of time (or alternatively left hanging around for years with insignificant amounts of money left in it) with no opportunity for upselling other products to the customer,,,,

If you use a personal account rather than an executor account and you die within 7 years of distributing the money then HMRC could deem this was a gift from your estate.  
Your own executors could have a difficult job of sorting that out if IHT is due on your estate and HMRC come calling.

Zanderman

adwils said:

p00hsticks said:

JGB1955 said:

Barkin said:

When my Dad died in 2022 I just used one of my "spare" personal current accounts, and kept impeccable records for everything. 

Likewise - as long as both/all executors agree, there isn't really a need for a specific Executor's account.  Some might suggest that, in the event of your early demise, the accounts become part of 'your' estate.  As long as you have kept good  records this isn't really a concern.

Whilst true that in the event of your death the money would fall into your estate, it would be balanced by an equal and opposite debt owed from your estate to the one to which you were executor.

as to the headline question of why an executors account is so difficult to open - what's in it for the bank ? They probably see it as a a lot of paperwork for an account this is probably going to open for a relatively short amount of time (or alternatively left hanging around for years with insignificant amounts of money left in it) with no opportunity for upselling other products to the customer,,,,

If you use a personal account rather than an executor account and you die within 7 years of distributing the money then HMRC could deem this was a gift from your estate.  
Your own executors could have a difficult job of sorting that out if IHT is due on your estate and HMRC come calling.

Agree with this. As I said in my post above the advantages of an proper executor account is that the balance is not formally held in your name, which it would be in a personal account. HSBC's term for these accounts is 'Appointee' accounts.  I assume that has some formal status - though tbh I've never actually asked what that means in detail.

Money held in such accounts is not, afaik, attached to the account holder from HMRC's point of view. And that money can be substantial amounts, sometimes held (in my experience) for months whilst the remainder of the estate is sorted out. Months can turn into years sometimes. I would not want that money in one of my personal accounts. It's not mine and it's not my liability. 

So, again as I said above, despite difficulties and limitations with executors accounts, I'd always go for one.

adwils

In the end I'v got HSBC to open a "Appointee Account".

It's in my name, yet I have other personal HSBC accounts. As I clsoe the bereaved accounts I pass on the money to the beneficiaries (not me).
Hopefully this distances the executor account form my account although the only thing different seems to be the account names.