Executor's bank account

jonesMUFCforever

Sorry but I disagree with most of what you have posted.
If the deceased had a credit card bill it is a debt on the estate not to be played with or paid out of the estate before probate.
Same with the care home - at death his/her assets are frozen - they have no choice but to wait.

opinions4u

Any expertise I have is based on bank procedure (Halifax c2005), so I can't say for sure that this is the legal position.

But:

On registration of death, the accounts of the deceased should become "Pers Reps". Cheques payable to "Pers Reps of Dead Person" can be credited. The only withdrawals allowable would typically be for funeral, probate or capital gains tax. If the estate generates expenses in this time it's my understanding that the executors should use their personal funds to meet costs, with a view to reclaiming them later on. The example of the credit card bills above fits here. Some banks will scrap interest on death. Others won't.

When probate or letters of administration are registered the bank can then convert accounts to executor status. They don't have to offer this service though. This effectively gives the executor control of the account. It's usually reasonable for executors to collect funds owed for any bills that they have paid at this point, but appropriate for records to be retained (receipts etc) to confirm this.

From then on, it's up to the executors to maintain the estate until it is wound up. If cash is short and there is a property to sell, it may not be appropriate to distribute the cash in the estate until the property is sold.

Quite happy for others to challenge what I've posted from a legal perspective, and I've no idea if Halifax still work the same way these days. Just posting my understanding of how things work.

So I would guess that most banks would - if there were sufficient funds in the account - allow for perhaps the minimum monthly payment to be made

Before probate is obtained? No chance.

dzug1

jonesMUFCforever wrote: »

.
Same with the care home - at death his/her assets are frozen - they have no choice but to wait.

For outstanding fees - yes

But for future fees they have the option of giving the elderly relative notice to quit or make other arrangements for payment of fees.

deeplyblue

opinions4u wrote: »

Any expertise I have is based on bank procedure (Halifax c2005), so I can't say for sure that this is the legal position.

But:

On registration of death, the accounts of the deceased should become "Pers Reps". Cheques payable to "Pers Reps of Dead Person" can be credited. The only withdrawals allowable would typically be for funeral, probate or capital gains tax. If the estate generates expenses in this time it's my understanding that the executors should use their personal funds to meet costs, with a view to reclaiming them later on. The example of the credit card bills above fits here. Some banks will scrap interest on death. Others won't.

Would HMRC be able to claim any arrears of Income Tax from a previous year?

I do know that any over-payment of state pension can be claimed back from the bank account, and that an over-payment of an occupational pension (in the case in which I was involved recently) was claimed back directly from the bank account by the pension paymaster. Neither bank nor paymaster appeared to find this worthy of more than routine reporting ("To spare you any distress or inconvenience, we will contact Barclays directly. The manager will inform you when this payment has been made.") This is, they told me, part of the agreement over the pension payment.

As a matter of record, I've just found out they (pension paymaster and/or Barclays) made a real mess of it, and now a under-payment will have to be claimed. My opinion of Barclays has gone down by leaps and bounds in the last 12 months.

BTW this issue of the expenses of the estate is one which needs a little more publicity than it gets. If executors have to subsidise the estate from their personal resources until probate is granted, then they could find themselves undertaking long term debt.

Take a case where the deceased has left a house, and a will which is being contested. The granting of probate could take years and in the meanwhile the house will need to have money spent on it, if its value is not to diminish substantially. It may need heating (to prevent damp and mould), roof, window and gutter maintenance, periodic cleaning to prevent insect infestation, not to mention council tax (which is suspended on an empty property only for the first 6 months, I understand) and potentially lots of other things (again, some personal experience).

Before you agree to be an executor you have to realise that there may be an awful lot of paperwork involved - but that, it seems, is not all. You may also have to spend hundreds or thousands of pounds of your own money (if there's a flood, or pre-existing structural damage) and then reclaim it later, which is fine if you have that sort of money lying around.

Perhaps those making a will should consider this before asking someone to be an executor.

db

amold

I have a similar issue. I am executor of my late father’s estate, and assuch I have received several cheques from various organisations as dad was incredit with them. I can't find anywhere but HSBC that will open an executorsaccount without grant of probate, but even they would not be able to acceptcheques made out to me. Am I correct in thinking that I have to pay the chequesinto my account, and then either transfer the money to the executors accountonce open, or just account for it as I am a beneficiary (not the only onethough)

dr_adidas01

amold wrote: »

I have a similar issue. I am executor of my late father’s estate, and assuch I have received several cheques from various organisations as dad was incredit with them. I can't find anywhere but HSBC that will open an executorsaccount without grant of probate, but even they would not be able to acceptcheques made out to me. Am I correct in thinking that I have to pay the chequesinto my account, and then either transfer the money to the executors accountonce open, or just account for it as I am a beneficiary (not the only onethough)

If the cheques are in your fathers name then you cannot pay them into your account.

Also your legally obliged to pay then into an executors account that is in your fathers name. This is so that HMRC can see where all funds are and to whom its paid to. Plus they can collect any taxes and monies owed to them from this account, or refund any taxes that need to be refunded.

While this is a difficult time its one of those hoops the government makes you go through.

amold

All the cheques are in my name. So that implies I have to get them all reissued in my father’s name or in the name 'executors of .....'. Even so as Iwill not get probate for some months (that is how long it takes I have beentold) the cheques will expire before then anyway. As no banks apart from HSBCwill open an executors account until probate is granted this surely means thatall executors must use HSBC when they find themselves in my situation, i.e.with cheques that need paying in now. I can't believe that I am unique here,this must happen all the time.

dr_adidas01

amold wrote: »

All the cheques are in my name. So that implies I have to get them all reissued in my father’s name or in the name 'executors of .....'. Even so as Iwill not get probate for some months (that is how long it takes I have beentold) the cheques will expire before then anyway. As no banks apart from HSBCwill open an executors account until probate is granted this surely means thatall executors must use HSBC when they find themselves in my situation, i.e.with cheques that need paying in now. I can't believe that I am unique here,this must happen all the time.

HSBC are not the only bank that will open an executors account, the usual custom is to open an account where the deceased had a banking relationship.

If you pay any cheques into your own bank account that are from your fathers estate and there are other beneficiaries to his estate. It can leave you open to claims of fraud against the estate and also possibly other beneficiaries may decide you have pocked the cash illegally.

You need to pay anything your father gets back into an account in his name, that way it protects you from any possibility of prosecution and claims of fraud.

As for the cheques yes get them sent out in your fathers name, or ask HSBC if you can pay them into the account in your name.

Sadly probate can takes months to sort out from experience I know. Cheques are valid for up to 6 months from there date of issue.

amold

My fathers accounts will not accept payments, in or out. I can't open an executors account for at least 6 months i.e. when probate is granted. You advise against paying the cheque's I have now into my account ( they are in my name ) as this could be seen as fraud. So I still don't see what I can do with them. Sorry for my lack of understanding here. HSBC are not my bank or my fathers, I mentioned them as my research has shown them the only bank willing to open an executors account without waiting for , so it has nothing to do with them.

dr_adidas01

amold wrote: »

My fathers accounts will not accept payments, in or out. I can't open an executors account for at least 6 months i.e. when probate is granted. You advise against paying the cheque's I have now into my account ( they are in my name ) as this could be seen as fraud. So I still don't see what I can do with them. Sorry for my lack of understanding here. HSBC are not my bank or my fathers, I mentioned them as my research has shown them the only bank willing to open an executors account without waiting for , so it has nothing to do with them.

So how are you going to get the money out of your fathers account if you can't take any money out. Whom is this bank and have you spoken to them about opening an account?

I didn't say to use your fathers account, I said you have to open a new account in your fathers name as an executors account.

As stated you legally have to keep any money from your fathers estate separate so that if any claims on the estate are made they can be paid and an audited record can be kept for HMRC.

Have you not been into the banks and checked to see what there requirements for opening an executors accounts actually are.

The reason HSBC are usually recommended is because they do actually have a specialist team who deal with this kind of issue.