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Not informing banks of a death

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Loup321
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Not informing banks of a death

#251348

Postby Loup321 » September 12th, 2019, 12:20 pm

I think this is a DAK, but if anyone wants to move it to Legal Issues, please do so.

A woman died recently, and her husband is sorting out her bank accounts and stuff.

She has one account (Santander) that has direct payments (mostly dividends) into a few times a year. Her husband went into the local branch and told them of the death in person, and he was told to sort out all the prople who make payments into the account before he informs the bank officially.

They have a joint account with HSBC, and again the husband went in to tell them in person. He was told that he should not tell them officially yet, in case any cheques came in his late wife's name. Having the account still in joint names would enable him to pay the cheques in, while if it was in his sole name he would have to get the cheque reissued.

Is this normal, to have financial institutions tell the executor not to tell them that a person has died? It seems like it's breaking all the rules, but it could be a consequence of them living in a rural area, and the husband being known personally in all the local banks. The husband is finding it very friendly and reassuring (and everything seems to be going very shoothly, so he tells me!), but to me it seems odd in these days of "one size fits all" that the branches of both banks were allowed to use their discretion and not lock the accounts down immediately.

seagles
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Re: Not informing banks of a death

#251362

Postby seagles » September 12th, 2019, 1:07 pm

https://www.moneyadviceservice.org.uk/en/articles/what-to-do-when-someone-dies#what-you-need-to-do-straight-away-after-a-death

This gives a good list of who and when. It seems to be the same as age concern. It says
When?

Ideally, as soon as possible after receiving the death certificate, or within a month of the death.

Lootman
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Re: Not informing banks of a death

#251374

Postby Lootman » September 12th, 2019, 1:49 pm

Loup321 wrote:Is this normal, to have financial institutions tell the executor not to tell them that a person has died?

I didn't think it was normal, but it is certainly enlightened of them. There are sound reasons to hold off telling third parties about a death. Institutions can be quite aggressive about shutting down accounts and services when you inform them, which can cause problems, particularly for automated payments in and out.

You are supposed to inform third parties within a reasonable period, but that might be a few weeks depending on circumstances. When I have been in this position I also had a power of attorney, as well as being the executor, and so was used to managing finances and accounts for others. So my ability to act was seamless and continuous. I made sure that all pending payments and receipts were processed before telling the bank, figuring they might wish to immediately close or freeze the account when I did.

Perhaps banks etc. are behaving more reasonably these days?

Loup321
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Re: Not informing banks of a death

#251407

Postby Loup321 » September 12th, 2019, 3:37 pm

Thanks, seagles, for that website. I will certainly pass it on.

Yes, it is very enlightened, and very old-fashioned and not the modern way of doing things. Enlightenment seems to suggest progress, whereas "progress" (and all the rules and securities in place in a modern world) seem to be opposite. Just the small town personal touch, I think.

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Re: Not informing banks of a death

#251412

Postby seagles » September 12th, 2019, 3:47 pm

Interestingly when I informed HSBC of my mums death, even with lpoa, the account was frozen. The only money I was allowed was to pay for the funeral. What I had to do was open an account purely for reclaiming and paying anything out. Seems they have moved on since those days

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Re: Not informing banks of a death

#251589

Postby yorkshirelad1 » September 13th, 2019, 11:09 am

Loup321 wrote:I think this is a DAK, but if anyone wants to move it to Legal Issues, please do so.

A woman died recently, and her husband is sorting out her bank accounts and stuff.

She has one account (Santander) that has direct payments (mostly dividends) into a few times a year. Her husband went into the local branch and told them of the death in person, and he was told to sort out all the prople who make payments into the account before he informs the bank officially.

They have a joint account with HSBC, and again the husband went in to tell them in person. He was told that he should not tell them officially yet, in case any cheques came in his late wife's name. Having the account still in joint names would enable him to pay the cheques in, while if it was in his sole name he would have to get the cheque reissued.

Is this normal, to have financial institutions tell the executor not to tell them that a person has died? It seems like it's breaking all the rules, but it could be a consequence of them living in a rural area, and the husband being known personally in all the local banks. The husband is finding it very friendly and reassuring (and everything seems to be going very shoothly, so he tells me!), but to me it seems odd in these days of "one size fits all" that the branches of both banks were allowed to use their discretion and not lock the accounts down immediately.


I was sole exor for my Mum (I also had PoA).
I have to admit that I held off telling her bank for a few days after my Mum died while I sorted a few outgoing payments (DDs for utilties) and incoming payments (dividends etc), which otherwise would have caused an almightly amount of work if they bounced (on a "frozen" account) and had to be reissued/recreated. IMHO, the evidence (of payments) was all provable, if anyone wanted to ask any questions and the utility bills would still have had to have been paid and the figures showed up in the estate accounts anyway. It was a fairly straightforward estate with me as sole exor and 99% going to me & my sister and we are on good terms. I suppose if the estate were different, one might be a bit more thoughtful, but who wants to make it harder work than it might be at a time when you'd rather be thinking about other things.
I'm sure it helped that I mainly use a small branch of a big bank in a rural area and all the (three) staff know me. I seem to recall that they were also happy to let me pay a cheque made payable to my Mum into the newly opened Executors account. YMMV.

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Re: Not informing banks of a death

#251595

Postby Dod101 » September 13th, 2019, 11:35 am

The OP or at least the friend should be grateful because often on these Boards we have people complaining that they cannot pay in a cheque in the name of the deceased because the account had been frozen. What the banks are sensibly suggesting is to leave the account unchanged to allow credits in particular to be paid in before they close down the account. Seems good to me and I see no downside for the survivor.

Dod

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Re: Not informing banks of a death

#251616

Postby stewamax » September 13th, 2019, 1:11 pm

The banks are being sensible with "don't tell us officially just yet", but if cheques are paid in retrospectively it raises the question of the value of the deceased's estate at the moment of death. I imagine HMRC would be interested if there was a large post-mortem in-payment because the estate does not, for example, receive a personal allowance; unless of course the bank pre-dates the in-payments, but I would be surprised if they were allowed to do so.

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Re: Not informing banks of a death

#252210

Postby Loup321 » September 16th, 2019, 1:22 pm

I see your point about not knowing the value of the estate at the moment of death, if money is allowed to move freely after death. However, in this case the husband is sole executor and sole beneficiary, so there is no Inheritance Tax due, and probably no need for probate. The husband hasn't been told by anyone yet that probate will be required, so his understanding is that the exact value of the estate isn't that important. I think he is keeping records anyway, just so he remembers what he has done and what he has not yet done.

Thanks everyone for all the views.

Loup

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Re: Not informing banks of a death

#252231

Postby Lootman » September 16th, 2019, 3:41 pm

stewamax wrote:if cheques are paid in retrospectively it raises the question of the value of the deceased's estate at the moment of death. I imagine HMRC would be interested if there was a large post-mortem in-payment because the estate does not, for example, receive a personal allowance; unless of course the bank pre-dates the in-payments, but I would be surprised if they were allowed to do so.

If a sum of money was due to the deceased before death. but only paid after death, then its value would be taken into account when computing the value of the estate at death, because it was an asset of the estate at that time.

Any debt or obligation of the deceased counts as an asset, just as any unpaid debt of the deceased count as a liability. Both can adjust the estate valuation.

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Re: Not informing banks of a death

#252249

Postby Alaric » September 16th, 2019, 4:58 pm

Lootman wrote:
Any debt or obligation of the deceased counts as an asset, just as any unpaid debt of the deceased count as a liability. Both can adjust the estate valuation.


So if any shares had gone xdiv, you would add back the dividends to the value of the estate. Similarly credit card or utility bills could be taken off it.

How do dealing, ISA or SIPP accounts on online platforms handle the problem?

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Re: Not informing banks of a death

#255742

Postby john10001 » October 3rd, 2019, 10:45 pm

seagles wrote:Interestingly when I informed HSBC of my mums death, even with lpoa, the account was frozen. The only money I was allowed was to pay for the funeral. What I had to do was open an account purely for reclaiming and paying anything out. Seems they have moved on since those days


I bet HSBC haven't.


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