Probate: Executor account

[kiloran]

Is there any real benefit in opening an executor account to hold the proceeds from an estate? My sister and I are both executors for mum, and the only beneficiaries, with the proceeds split equally between us. Just some bank accounts, and the house to be sold. Zero chance of any conflict between sister and myself, and no chance of anyone else disputing the will, so does it make sense to just put the proceeds into one of our accounts?

--kiloran

[pje16]

I would keep it separate
a quick google came back with

Do I Have To Open An Estate Account? There is nothing legally forcing an executor to open an executor account, but it is recommended that they do. If an executor chooses not to open an executor account, it is still recommended to use an independent bank account separate from their own finances

HSBC did one free for me when i handled my mum's probate 6 years ago.

[Mike88]

. Zero chance of any conflict between sister and myself, and no chance of anyone else disputing the will, so does it make sense to just put the proceeds into one of our accounts?

--kiloran

That's exactly what I did in identical circumstances. Only one bank and two Building Society accounts were involved as the house had already been sold to pay for nursing home fees. All the money- and there was not a lot- went into my account from which I distributed half the proceeds (less expenses such as probate fees) to my sister.

[Lootman]

. Zero chance of any conflict between sister and myself, and no chance of anyone else disputing the will, so does it make sense to just put the proceeds into one of our accounts?

That's exactly what I did in identical circumstances. Only one bank and two Building Society accounts were involved as the house had already been sold to pay for nursing home fees. All the money- and there was not a lot- went into my account from which I distributed half the proceeds (less expenses such as probate fees) to my sister.

Yeah, I would not segregate the funds. Unless I anticipated a big fight but then in that case I would probably decline to act as executor anyway.

And if, as is often the case, the executor is also a beneficiary, then that money is heading to me anyway.

[hiriskpaul]

No law to say you cannot, but you might find it simpler to have a separate joint account when it comes to producing a final set of accounts and reconciling cash movements instead of having to pick out the transactions later. Worth thinking about tail risk events as well, eg you or your sister dropping dead in the middle of the period of administration. A separate joint account keeps things clean, costs you nothing to set up and is trivial to do, not even involving ID checks if you use a bank you already have accounts with.

ps, I would not bother to make it an "official" executors account, just a joint personal account. That is what I have done in the past, but would be interested to hear the thoughts of others on this.

[fromdusktilldawn]

I found it simpler to keep everything in a separate bank account whilst winding everything up. Its tidier if all the incomings and outgoings go through that account. It would also be easier for someone else to see where you were up to, if something were to happen to you before the process was completed.....

[scrumpyjack]

I haven't opened a separate a/c on either occasion, but with NatWest one could open any number of savings accounts linked to one's current a/c. So I used one of those and put transfers through a savings account for every executor transaction. There was thus an 'audit' trail of all the executorship transactions without having a separate executorship current account.

[Gerry557]

Personally I used a separate account mainly to keep everything in one place and for simplicity.

An additional thought was it might be seen as me giving away funds if I popped my cloggs and affect my IHT position.

The separate executor account makes this very clear it's not my funds to my executor and the tax man should the need arise in the next 7 years.

[richfool]

I would concur with hirispaul's PS (to his post above).

According to my bank's bereavement dept, who I recently made similar enquiries with, if you open an account as an Executor account, you are likely to be asked for sight of probate as and when you want to withdraw the proceeds. (Whereas if opened as a normal account in the Executors's joint names, that won't arise).

[UncleEbenezer]

Is there any strong reason not to use the deceased's current account for that purpose? At least, where one or more executor has access to that account, for example through having had Power of Attorney at the end of the deceased's life?

[Gerry557]

Is there any strong reason not to use the deceased's current account for that purpose? At least, where one or more executor has access to that account, for example through having had Power of Attorney at the end of the deceased's life?

Once they find out about the death they will prevent you from using it. You might be able to continue to use any access you had if not reported. I don't know if that might land you in future trouble though if things went a little pear shaped.

I found that even with the executor account, initially I could only pay into the account until access was authorised. I think there was an exception that they would pay the funeral bill direct on the presentation of the bill. It took a small while to be granted.

[UncleEbenezer]

Is there any strong reason not to use the deceased's current account for that purpose? At least, where one or more executor has access to that account, for example through having had Power of Attorney at the end of the deceased's life?

Once they find out about the death they will prevent you from using it. You might be able to continue to use any access you had if not reported. I don't know if that might land you in future trouble though if things went a little pear shaped.

I found that even with the executor account, initially I could only pay into the account until access was authorised. I think there was an exception that they would pay the funeral bill direct on the presentation of the bill. It took a small while to be granted.

Interesting. Being currently in that situation, I haven't told the bank about the death, and I have used the account to pay for the cremation. And since there's a house to clear and sell, I thought it a good idea to keep power and water connected there, meaning not closing those particular direct debits.

[Lootman]

Once they find out about the death they will prevent you from using it. You might be able to continue to use any access you had if not reported. I don't know if that might land you in future trouble though if things went a little pear shaped.

I found that even with the executor account, initially I could only pay into the account until access was authorised. I think there was an exception that they would pay the funeral bill direct on the presentation of the bill. It took a small while to be granted.

Interesting. Being currently in that situation, I haven't told the bank about the death, and I have used the account to pay for the cremation. And since there's a house to clear and sell, I thought it a good idea to keep power and water connected there, meaning not closing those particular direct debits.

I am a big believer in not being too hasty about telling the bank that the account holder is deceased. Banks can be quite aggressive about shutting down the account, which can make things more difficult.

If you are both an attorney and an executor then in theory you have continuous and seamless access to the assets of the deceased. Your executorship starts at the point of death, just as your POA expires. However banks have a nasty habit of demanding to see a grant of probate before releasing funds, and the grant may be months away.

As long as you act with honest intent I think the risk of finessing the timing in such a situation is minimal and can be well worth it.

[kiloran]

Is there any strong reason not to use the deceased's current account for that purpose? At least, where one or more executor has access to that account, for example through having had Power of Attorney at the end of the deceased's life?

I think the strong reason not to use mum's account is that it would be against the bank's T&Cs (and may be illegal?) and may just open up a can of worms, and I see no point in complicating matters. My sister and I both had POA but we never used it, I just handled mum's finances online (I'm sure the bank was impressed at the online skills of a 99-year-old!). And the POA automatically lapsed on mum's death. I'm in no rush to inform the bank, but I just log on to monitor transactions and see that Direct Debits have been cancelled, I no longer make any transactions on mum's accounts.
Since there is no legal or persuasive argument to have a seperate executor account, we'll just dump all the estate into sister's account and log the few transactions such as funeral expenses in a spreadsheet as we go along. My sister and I have absolute trust in each other and total agreement on any decisions.

Many thanks for everyone's thoughts and suggestions.

--kiloran

[Gerry557]

Once they find out about the death they will prevent you from using it. You might be able to continue to use any access you had if not reported. I don't know if that might land you in future trouble though if things went a little pear shaped.

I found that even with the executor account, initially I could only pay into the account until access was authorised. I think there was an exception that they would pay the funeral bill direct on the presentation of the bill. It took a small while to be granted.

Interesting. Being currently in that situation, I haven't told the bank about the death, and I have used the account to pay for the cremation. And since there's a house to clear and sell, I thought it a good idea to keep power and water connected there, meaning not closing those particular direct debits.

I found the water company very helpful and they cancelled all further bills until the property was sold.

The energy company was OK. We had already requested a return of Capital prior which actually happened just after the death. I just paid the outstanding bill once the house was sold. I did receive a letter, I think it might have been their solicitor chasing some details but I ignored it as it was being sorted.

I think it took around 3 months to obtain access to the special REC account. I think probate needed to be granted first.

[pje16]

Apologies @kiloran if you know about tell us once
I used it for my mum 6 years ago, worked very well
https://www.mygov.scot/tell-us-once

[kiloran]

Apologies @kiloran if you know about tell us once
I used it for my mum 6 years ago, worked very well
https://www.mygov.scot/tell-us-once

Yes, we used that, it's very useful

--kiloran