Accessing accounts after someone dies

[lukedogwalker]

When someone dies, death duty may become due. The beneficiaries of a will may need to sell a persons assets to pay death duty. Death duty is payable quite soon after someone dies.

Obtaining letters of administration takes time. Is it possible to instruct financial institutions when someones dies administration of their accounts should fall to the executors of their will? My understanding is you cannot access accounts using power of attorney after someones death.

Thanks for any replies.

Luke

[quelquod]

Not AFAIAA. In fact I believe it’s unlawful to access a deceased’s accounts from the time of death for any purpose prior to probate (confirmation up here but similar). You can usually get immediate bills like funeral costs etc. paid but you can’t do it yourself, it’s done by the financial institution concerned. You can usually get low-value accounts (maybe £50k but it varies) paid out to an executor prior to probate but access to significant accounts is pretty limited until probate is granted.

[bungeejumper]

Welcome, Luke. I can't quite make sense of your fifth sentence. Can you explain what you mean a bit more clearly?

BJ

[lukedogwalker]

Hi BJ

"Is it possible to instruct financial institutions when someones dies administration of their accounts should fall to the executors of their will? "

Can I ask, for example, Natwest to grant the executors of my will full access to my account on my death?

Luke

[Lootman]

Not AFAIAA. In fact I believe it’s unlawful to access a deceased’s accounts from the time of death for any purpose prior to probate (confirmation up here but similar). You can usually get immediate bills like funeral costs etc. paid but you can’t do it yourself, it’s done by the financial institution concerned. You can usually get low-value accounts (maybe £50k but it varies) paid out to an executor prior to probate but access to significant accounts is pretty limited until probate is granted.

I do not believe that it is unlawful to access the accounts of a deceased person, unless you are engaged in some other crime such as fraud or tax evasion.

Assuming that you are an executor of the estate then you have the legal authority to acquire, manage and distribute the assets. This power is granted by virtue of the will and is effective immediately upon the death. You do not have to wait for probate.

So as a simple example if the deceased has a car then you can take possession of that car and secure it. Likewise with any other real asset that you have access to.

Financial accounts are a little different in that the institution may refuse to release those funds without probate. But in a case where the executor has access to those accounts (say via cards, PINs or passwords) then I'd argue that they can requisition those funds, as long as they are kept safe, segregated, and distributed only according to those rules.

Although obviously once the institution is advised of the death then they may freeze the account, so timing becomes a thing.

My kids have POA over my accounts which they can invoke at any time (I am alive). They are also my executors AND they have my account details, PINs and passwords. So they will have options when I die, and are aware of the pros and cons of those options.

[lukedogwalker]

I do not believe that it is unlawful to access the accounts of a deceased person, unless you are engaged in some other crime such as fraud or tax evasion.

Assuming that you are an executor of the estate then you have the legal authority to acquire, manage and distribute the assets. This power is granted by virtue of the will and is effective immediately upon the death. You do not have to wait for probate.

So as a simple example if the deceased has a car then you can take possession of that car and secure it. Likewise with any other real asset that you have access to.

Hi Lootman. Thank you for your reply. This is my understanding too. However, as quelquod states, financial institutions won't allow access without letters of administration for accounts valued at over £50,000.

Luke.

[Lootman]

I do not believe that it is unlawful to access the accounts of a deceased person, unless you are engaged in some other crime such as fraud or tax evasion.

Assuming that you are an executor of the estate then you have the legal authority to acquire, manage and distribute the assets. This power is granted by virtue of the will and is effective immediately upon the death. You do not have to wait for probate.

So as a simple example if the deceased has a car then you can take possession of that car and secure it. Likewise with any other real asset that you have access to.

Hi Lootman. Thank you for your reply. This is my understanding too. However, as quelquod states, financial institutions won't allow access without letters of administration for accounts valued at over £50,000.

Correct. For me the more interesting question is what if the executor, knowing of that problem and acting under his executor authority, withdraws those funds anyway, using his prior access?

That probably violates the bank's T&Cs, but many folks would not care about that.

In the case of my mother I was both her attorney (whilst she was alive) and her executor. So I legally had seamless and uninterrupted access to her bank account. I made sure that I took all those funds myself, and so did not find myself subject to the whims, risks and delays of probate.

I maintain to this day that was fine and above board, given that I had clean hands and that my intentions were honourable.

[quelquod]

Not AFAIAA. In fact I believe it’s unlawful to access a deceased’s accounts from the time of death for any purpose prior to probate (confirmation up here but similar). You can usually get immediate bills like funeral costs etc. paid but you can’t do it yourself, it’s done by the financial institution concerned. You can usually get low-value accounts (maybe £50k but it varies) paid out to an executor prior to probate but access to significant accounts is pretty limited until probate is granted.

Since the OP specifically mentioned Death Duties, I believe that Inheritance Tax (and DWP Pension overpayments) are amongst the 'immediate' bills that a financial institution will pay prior to probate.

Despite @Lootman's observations above it IS illegal (in Scotland at any rate) to access a deceased's bank accounts whether or not you have practical access to them. Obviously prior to notifying the bank of the death it's possible if you have a PIN etc. but there are lots of things which are possible but not legal. Operating the account post death would be pretty obvious once the death certificate was forwarded to the institution so I expect it all comes down to a matter of degree, running off with a million might raise an eyebrow.

[Lootman]

Since the OP specifically mentioned Death Duties, I believe that Inheritance Tax (and DWP Pension overpayments) are amongst the 'immediate' bills that a financial institution will pay prior to probate.

Despite @Lootman's observations above it IS illegal (in Scotland at any rate) to access a deceased's bank accounts whether or not you have practical access to them. Obviously prior to notifying the bank of the death it's possible if you have a PIN etc. but there are lots of things which are possible but not legal. Operating the account post death would be pretty obvious once the death certificate was forwarded to the institution so I expect it all comes down to a matter of degree, running off with a million might raise an eyebrow.

Yes, "running off" with a million is illegal. That is fraud.

An executor securing assets in order to fully satisfy IHT and the terms of the will is a very different matter.

I do not know about Scotland but I am not aware that an executor using his access to the assets of the deceased is illegal elsewhere in the UK unless someone can show me chapter and verse stating otherwise. It is his or her job and legal right to collect the assets of the estate.

[lukedogwalker]

I believe that Inheritance Tax (and DWP Pension overpayments) are amongst the 'immediate' bills that a financial institution will pay prior to probate.

Thank you quelquod. Do you know if a broker would sell unit trusts or shares in order to pay Inheritance Tax?

Luke

[Moosehoosenew]

Would strongly advise if you do not know what you are doing you seek legal advice.

My wife is executor for a relatives estate and we have chosen a legal service provider to assist with the estate rather than the lawyer that showed no sympathy to the grieving partner and suggested after asking how much the funeral cost that the legal fees would be similar. Additionally stating it is £300 an hour anyway. As far as I can see most of the work in legal firms is done by para legals, but if they can get away with it 2.5K a day is the cost.

I have received 2 quotes to vary the will. First was £500, second was £195?

Maybe you get what you pay for, I doubt it.

[genou]

I believe that Inheritance Tax (and DWP Pension overpayments) are amongst the 'immediate' bills that a financial institution will pay prior to probate.

Thank you quelquod. Do you know if a broker would sell unit trusts or shares in order to pay Inheritance Tax?

Luke

Paying inheritance tax directly to HMRC should normally be offered. You will have to offer evidence of your standing - probably a certified copy of the will showing you as executor and evidence of your identity.

Even if you don't want tax paid, most will offer to sell up holdings into cash to stabilise the estate, but won't disgorge the cash until you get confirmation / probate.

Since we are here, I can't resist noting that what quelquod calls illegal interference with an estate in Scotland rejoices in the name "vicious intromission".

[Gerry557]

I believe that Inheritance Tax (and DWP Pension overpayments) are amongst the 'immediate' bills that a financial institution will pay prior to probate.

Thank you quelquod. Do you know if a broker would sell unit trusts or shares in order to pay Inheritance Tax?

Luke

I think the executor would have to arrange that after probate. Make sure you have a will, named executors. You could even have a death file keeping list of assets and your intentions to assist the executor in their duties. It will also give you an indication of what might be needed with regard to IHT bills etc so you can plan.

You can also have some cash in a joint account that can be accessed after you are gone.

[lukedogwalker]

I think the executor would have to arrange that after probate.

I think inheritance tax is due before probate is granted. That doesn't mean what you have said is wrong.

Luke

[Lootman]

You can also have some cash in a joint account that can be accessed after you are gone.

Indeed, holding assets and accounts as joint tenants is an excellent way of ensuring that the surviving tenant has immediate and ongoing access to funds after the first death. Often that surviving tenant is also the executor and beneficiary, which makes it even better.

This is why in many cases there is no need for probate when the first spouse or civil partner dies. As long as everything is owned as joint tenants, nothing really changes upon that first death, and of course no IHT either.

As an aside it can sometimes be useful if you do not rush to advise banks and other institutions about the death of their account holder. Take your time and only do it when it makes sense.

I can't resist noting that what quelquod calls illegal interference with an estate in Scotland rejoices in the name "vicious intromission".

That is a vicious law in my opinion, and not the only one Scotland has around the topic of inheritance. As noted upthread I am not aware of any equivalent law in the rest of the UK.