Money in personal account

moedeeb

My mother in law died in a care home quite suddenly, She was suffering from severe dementia and when she died we had just withdrawn her isa savings into a seperate personal account (in the name of POA that we use to pay her care costs. Usually we would move various pots around to manage cover care costs which wasn’t easy. For context we have paid over £279,000 over 4 years 3 months including making up monthly shortfalls with our own money.
POA has obviously ended my wife and her sister are named executors and beneficiaries 50/50. There will be no inheritance tax but in total her estimated estate is 1/2 a house and 28k cash in her own account ( now frozen) plus about £30k in the personal account we use to shunt money around. To cut to the question are we ok to pay solicitors fees ,final care fees and funeral expenses from the 30k we hold and disclose the remainder along with her own assets on the probate form?

doodling

Hi,

What you have written is slightly confusing when you say "along with her own assets" - money you might be in control of as an attorney remains the property of the person who has granted the PoA (i.e. your MiL), or, in this case their estate. Or are you saying that the money in that account is actually your money?

The overall answer is that any money that forms part of the estate that the executors are in control of can be used to pay funeral expenses, settle debt and (if any left over) pay professionals to assist in administering the estate.

The pedantic answer is that if the account is in your MiL's name then the bank should be notified of her death and the executors should then follow whatever process the bank sets out to retrieve the money; doing otherwise would be a breach of the bank's Ts&Cs. Whether you or the bank should be concerned if you don't do that that will depend on whether the bank later becomes embroiled in an argument about whether you should have that money (e.g. if someone else comes forward with a later will claiming to be the executor then the bank will certainly want the money back so it can be given to the rightful executor and may consider pursuing you for their legal costs in sorting out the mess, or, in the worst case, fraud).

If the account is in your name but actually holds MiL's money then unless you have previously agreed it with the bank, you are probably already in breach of the bank's Ts&Cs - most banks forbid the use of their accounts to hold money which does not belong to the named account holder(s). Probably best to remedy that breach ASAP and move it into an executor account (where the executors can then use it to help settle the estate, as you are proposing).

Keep_pedalling

There should be no need to employ solicitors to manage the estate or apply for probate. The money in her personal account should be able to be released to the executors on production of the will and executors ID. They should not need to wait for probate to do that.

Snot

Are you saying that the ISA money was transferred into the name of one of the executors who had POA ?

If so and assuming there are no major creditors and the executors agree, I would take a pragmatic view and not complicate things, the money in the POA account is part of the estate and should be recorded as such, and yes I think you can use it to pay bills.

If you have been making up short falls in the bills aren’t these then debits that the estate owns you, in which case it may be reasonable to deduct from the money held.

Just make sure everything is recorded so you can justify in the unlikely event you need to.

moedeeb

thanks I will ensure everything is recorded as advised

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82102654#Comment_82102654

I believe a solicitor will be required here. Based on previous posts from the OP there is a complicated/ confused nil rate band discretionary trust of the property in point, that undoubtedly utilised some or all of the deceased husband's nil rate band.

Careful consideration will be required to determine whether or not the value of trust has any bearing on the IHT/probate reporting of MIL's personal estate in view of her occupation of the property prior to going into care. There is unlikely to be any subsequent trust documentation related to the terms of her occupation of the property.

My impression from some of the earlier posts is that the exsistence of the trust was not properly recognised or correctly administered for many years. Hopefully a tax accountant later enlisted to assist with trust compliance will be on hand to provide some insight.