Set up joint account with father ?

noviceSon

After my mother's death, I am one of 3 children, but the only one living with my father. 
I have been told the will (all money, assets) shall be split equally between us 3 children. 

My father suggested he should change his bank account. 
For us to be joint bank account holders - myself and him. 
So in event of his death, I would be able to access funds required to maintain the property.
Sounds helpful ! 
But is this advisable with probate ?

I have read about being legally entitled to ALL the money, even if the will says otherwise.
Notably:
"The money does not form part of the deceased person's estate for administration and therefore does not need to be dealt with by the executor or administrator."

But is this true ?

Because I have also read 
"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"

Which (for the purpose of estate calculation) is true.
So I understand IHT is complex but how big an issue is this ? 

In terms of filling out IHT forms, am I able to just state it's all his own money ?

Or is it likely to cause a load of hassle with HMRC ?

I don't expect there to be quarrels regards me being executor or sharing the proceeds. 
But do wonder if there are any tax implications of myself holding or administering the proceeds from a shared joint (or subsequently sole) account.

Also, what happens to shares ?
Do they need to be sold in order to split the proceeds between beneficiaries ?
Or can say, they be transferred to all 3 of us ?

Also what are the implications of selling them into say, the joint account ?
Are there any income tax consequences (for me) of say, shares being sold and proceeds moving into the joint account ? 
Or as the executor (most likely me), should there be separate bank accounts used for the purposes of estate administration ?

Really it's a question of us thinking ahead about the pros and cons of setting up any joint account.
We don't expect to pay any IHT but do expect to have to undertake a full IHT return.
I tried to research much as I could but obviously a novice with it all.
Sorry so many questions but any help or advice would be much appreciated.

Keep_pedalling

There is no reason to do this banks will release funds to an administrator without the need for probate unless the amount exceeds their probate limit which with many banks is £50k.

What is more important is to have something on place to cover his finances should he lose mental capacity to do so himself, preferable by making a lasting power of attorney. 

Brie

A joint account is great while you are sharing a home so that it's easy to manage bills etc.  Presumably your dad's pension(s) could be paid in to it and then you could help him manage his money if/when he finds this more difficult.  But the money in it will be considered in a practical sense to be split 50/50 so interest (& so any tax on it) would also be split like that.  

If there's not going to be a lot of cash left then chances are not having a joint account won't cause too many problems as banks will allow funeral expenses to be paid without probate (as I understand it).  If there is a significant amount of cash (over £50k? in any one account) then likely the banks will be stricter about allowing access.  Will that cause you any problems, assuming your father predeceases you?  i.e. are you dependent on him to pay for everything?  

I think it is normally considered best to set up an executor's account and any proceeds of the estate can be paid into that to eliminate any confusion between the estate's money and yours.  

As for shares - I don't know what's done with them whether they can be transferred as shares to each of your share accounts or if they need to be sold.  Obviously selling might be the easier, more straight forward action.  

Whatever you and dad decide please ensure that your siblings are aware and at least understand what is being done and why.  They don't necessarily need to agree with everything but it will save bad feelings if they know everything is above board.  So many families fall out over money and dividing up the estate.

poppystar

I had a joint account with my father which was very useful after his death. Yes, banks may release funds up to a high limit but the ease of having the joint account was a godsend in the initial few weeks as I had immediate access to the funds. It also meant I knew exactly what bills were paid when and to whom. 

I did have POA but my father was perfectly capable of handling his own finances and wanted to do so while alive - I simply kept an eye open on what was going on and did ask on a couple of occasions where big payments had been made. 

I declared the whole amount of the account to be his on the IHT forms as all the money in there came from his pension so was part of his estate. 

Yes, banks will pay for funerals but I had access to the money to pay for a needed emergency plumber! 

I used that account as the estate account after his death which meant it was easy to keep that money separate from my own. 

I had been reluctant to go down the joint account route initially (it was my father’s idea) but my mind was put at ease by people on here and it did work well for us. 

noviceSon

Many thanks everyone for all your helpful and great comments !

Keep_pedalling I suppose the point is (and maybe I should have pointed it out), I am dependant on his estate money in order to keep the property afloat and pay the bills .I will continue to living there + already have power of attorney.

Brie, not a huge amount but enough to cover funeral and living expenses. Until the estate is discharged I assume. Although come to think of it I wonder when that will be ? Should be ok anyway. 

Thanks for the tip about the executor account and yes, I will inform everyone (probably too much !) . 

poppystar thankyou too - listening to someone who has been there reassures me a lot ! 

You've also taken a weight off my mind by saying 

"I declared the whole amount of the account to be his on the IHT forms"

That was a big concern of mine - thinking the money would be considered helf mine.

So good to know it's easy enough to declare that on the forms.

And yes, from the point of view it's all his own money, I suppose it makes sense to use the account as the estate account. 

Assuming I presume, any money I take from it before the will is executed, wll be considered as "gifts" or estate expenses ? 

Bit confused on this one really because I assume legally, I am entitled to all the money.

Perhaps the forms will make it all clear. 

But regards the estate settlement guess it will all be deducted, setted and then obviously I will share the proceeds as likely executor.

Many thanks to all of you once again - wish you all a good weekend !

thegreenone

I had the exact same set up as Poppystar, with my Mum.  It worked well before and after she died.

The account was with my bank so I had Internet access and she would top the account with a cheque(!) from her bank once a month.

RAS

noviceSon said:

After my mother's death, I am one of 3 children, but the only one living with my father. 
I have been told the will (all money, assets) shall be split equally between us 3 children. 

My father suggested he should change his bank account. 
For us to be joint bank account holders - myself and him. 
So in event of his death, I would be able to access funds required to maintain the property.
Sounds helpful ! 
But is this advisable with probate ?

I have read about being legally entitled to ALL the money, even if the will says otherwise.
Notably:
"The money does not form part of the deceased person's estate for administration and therefore does not need to be dealt with by the executor or administrator."

But is this true ?

Because I have also read 
"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"

Which (for the purpose of estate calculation) is true.
So I understand IHT is complex but how big an issue is this ? 

In terms of filling out IHT forms, am I able to just state it's all his own money ?

Or is it likely to cause a load of hassle with HMRC ?

I don't expect there to be quarrels regards me being executor or sharing the proceeds. 
But do wonder if there are any tax implications of myself holding or administering the proceeds from a shared joint (or subsequently sole) account.

Also, what happens to shares ?
Do they need to be sold in order to split the proceeds between beneficiaries ?
Or can say, they be transferred to all 3 of us ?

Also what are the implications of selling them into say, the joint account ?
Are there any income tax consequences (for me) of say, shares being sold and proceeds moving into the joint account ? 
Or as the executor (most likely me), should there be separate bank accounts used for the purposes of estate administration ?

Really it's a question of us thinking ahead about the pros and cons of setting up any joint account.
We don't expect to pay any IHT but do expect to have to undertake a full IHT return.
I tried to research much as I could but obviously a novice with it all.
Sorry so many questions but any help or advice would be much appreciated.

So you are one of three siblings who you believe will inherit jointly? And you believe you will be an executor? 

You currently live with your father. Has your father discussed his ideas with your siblings?

After his death, the expectation is that any person living in the house will pay Council Tax and utilities even if probate has yet to be granted. 

Your siblings will not expect your lifestyle to be funded by their inheritance, assuming that dad does not need to sell the house to pay for care.

Even if he can afford care without selling the house, the assessment will assume that his entire income and assets are available to fund his care, not to support you living in his house. It's not something about which he, you or your siblings have any choice unless he is very wealthy.

Funds achieved from the sale of any shares need to go into an account in his sole name.