Probate, bank accounts and Enduring Power of Attorney

[RogerS]

More out of curiosity and a wish to have a better understanding.

When someone dies, my understanding was that their bank accounts etc were frozen until probate had been granted. But what if someone had Enduring Power of Attorney over the finances of the person who has died. Does the EPA trump the 'freezing' and continue to have access to the bank account ?

 

[mbartlett99]

Enduring Power of Attorney was been replaced by the Lasting Power of Attorney but in either case they end on the death of the donor at hich point the Executor of the will takes charge. You'd be well advised to have bank accounts held jointly which means that 'life'essentially carries on as normal and make sure you get loads of copies of the death certificate from the coroners office - everybody and their dog will need one.

Obviously seeking qualified legal help might be sensible rather than a law graduate who hated Property, Trusts and Succession and the professor who taught it 25 years ago!

 

[MikeG.]

My wife and her sister just organised Lasting Power of Attorney for their parents today (not a moment too soon, said the solicitor, who was just able to accept that the FIL was compos mentis enough to know what he was signing). It cost £1200 in solicitor's fees! If you have it in mind to do, don't put it off, because the consequences can be huge. If you do it early when the subject/s still have all their faculties then it is a relatively straight-forward online exercise at the government's website.

 

[Woody2Shoes]

I have LPA (two flavours) for my aged parent. Getting the LPA forms done was tedious and not cheap but perfectly easy to do without expensive legal help in my case - my parent already has a valid and reasonably straightforward will in place, well documented finances, and we're a small, stable, family who get on well with each other. The LPA gives the parent and the attorney(s) peace of mind, but the trick is actually putting one into practice. Depending on the wording chosen, you may have a difference of opinion with your old person as to how much help they actually need - and in the transition period they may be vulnerable to being financially abused.

I have not tried to put the LPA into action yet. My understanding is that LPAs only work up to the point of death. After death, you need death certificate and/or grant of representation - depending on the amounts involved, whether or not IHT is due, and the rules of the particular institution you're dealing with.

IME the major problem is in dealing with the retail banks these days - fewer and fewer branches, very hard to make appointments and right hand not communicating with left hand (e.g. Halifax and Lloyds - notionally part of the same "organisation", or any two separate people in Barclays). Those branches that remain contain people who have no training or empowerment to deal with death-related stuff, or much else frankly.

I have no illusions that activating an LPA would be also potentially fraught in a similar way.

Best of luck, W2S

 

[RogerS]

Enduring Power of Attorney was been replaced by the Lasting Power of Attorney but in either case they end on the death of the donor at hich point the Executor of the will takes charge. You'd be well advised to have bank accounts held jointly which means that 'life'essentially carries on as normal and make sure you get loads of copies of the death certificate from the coroners office - everybody and their dog will need one.

Obviously seeking qualified legal help might be sensible rather than a law graduate who hated Property, Trusts and Succession and the professor who taught it 25 years ago!

Many thanks for clarifying the PoA issue. Yup..understand the Executors take charge but returning to my other question then...aren't the bank accounts of the deceased frozen until probate is granted?

 

[flying haggis]

Enduring Power of Attorney was been replaced by the Lasting Power of Attorney but in either case they end on the death of the donor at hich point the Executor of the will takes charge. You'd be well advised to have bank accounts held jointly which means that 'life'essentially carries on as normal and make sure you get loads of copies of the death certificate from the coroners office - everybody and their dog will need one.

Obviously seeking qualified legal help might be sensible rather than a law graduate who hated Property, Trusts and Succession and the professor who taught it 25 years ago!

+1 for getting copies of the death certificate from the coroner, easier to get them and not need them than try to get another copy later on

 

[gregmcateer]

Many thanks for clarifying the PoA issue. Yup..understand the Executors take charge but returning to my other question then...aren't the bank accounts of the deceased frozen until probate is granted?

Yes.

agree with earlier advice to get a joint account set up if not already, e.g.with spouse/partner or offspring/solicitor/trusted other, if no spouse / partner in the picture, as this will continue to operate even after death of one party.

We hadn't done this when my dad died as a sole practitioner - all business funds frozen - so no payroll money available - VERY challenging!

 

[MikeG.]

Many thanks for clarifying the PoA issue. Yup..understand the Executors take charge but returning to my other question then...aren't the bank accounts of the deceased frozen until probate is granted?

Yes..........

Not entirely. Banks will allow the executor to pay for the funeral from the "frozen" account.

 

[RogerS]

But not allow the transfer of £30,000 and closure of the account then !

 

[Lons]

My wife and her brother arranged for LPA in 2010 in respect of my MIL and only last week have needed to action that in respect of her bank account as she's become very confused over the last 6 months and hasn't a clue now what she's doing financially. She'll be 92 next April.

We're lucky as also a very close family and carefully discussed the situation with her to find she's quite relieved that we've removed the stress of all her bills and payments and of course whatever money she wants or needs for legitimate purpose is hers to have.

We're relieved as well because she lives in an affluent area which is targeted by fraudsters with which we've already had some run ins.

Barclays were absolutely excellent when it came to arranging this although it took just over a week and all parties involved were notified correctly of the arrangements so in our case it was hassle free.

 

[mbartlett99]

I had nearly forgot but in this day and age its pretty appropriate. My neighbours father had a folder on the pc with all his usernames/passwords/account details for use in the event of his death - saved a lot of needless aggro when he shuffled off this mortal coil.

 

[Yojevol]

Probate is granted after all outstanding taxes are paid. To pay the taxes the executor needs access to funds. If the attorney has access and becomes the exec he can carry on using the bank accounts. I don't believe there is no need to inform the banks (unless it's written in the bank's T&C's). Just empty the accounts and distribute the funds according to the will.

 

[Phil Pascoe]

+1 for getting copies of the death certificate from the coroner, easier to get them and not need them than try to get another copy later on

Yes. I got six. My cousin laughed at me at the time then two weeks later needed one. Within a few weeks I'd used five of them.

 

[Lons]

+1 for getting copies of the death certificate from the coroner, easier to get them and not need them than try to get another copy later on

Yes. I got six. My cousin laughed at me at the time then two weeks later needed one. Within a few weeks I'd used five of them.

+2 for copies but like everything a bit steep having to pay £10 or £12 each for basically a photocopy.

 

[eezageeza]

+1 for getting copies of the death certificate from the coroner, easier to get them and not need them than try to get another copy later on

Yes. I got six. My cousin laughed at me at the time then two weeks later needed one. Within a few weeks I'd used five of them.

+2 for copies but like everything a bit steep having to pay £10 or £12 each for basically a photocopy.

I followed this advice when I acted as executor recently, but found that everyone who wanted a copy returned it very promptly, so I still have nearly all of them on file!

 

[eezageeza]

Many thanks for clarifying the PoA issue. Yup..understand the Executors take charge but returning to my other question then...aren't the bank accounts of the deceased frozen until probate is granted?

Yes..........

Not entirely. Banks will allow the executor to pay for the funeral from the "frozen" account.

I found that too, but beware the charges for doing so - Barclays told us they'd be happy to pay my deceased aunts bills from her accounts, but wanted to charge us £25 per bill - so we paid everything ourselves and claimed the cash back from her estate later!

 

[Phil Pascoe]

I had five out at the same time, but it was 13 years ago they were only £3 a copy then.

 

[RogerS]

Checked with Which Legal. As has been suggested different banks have different rules and the amount of money that they will release ranges from £5k to £50k.The person taking the money usually has to sign a disclaimer agreeing to pay any IHT due. If they don't then the bank becomes liable.

 

[Woody2Shoes]

Checked with Which Legal. As has been suggested different banks have different rules and the amount of money that they will release ranges from £5k to £50k.The person taking the money usually has to sign a disclaimer agreeing to pay any IHT due. If they don't then the bank becomes liable.

That's pretty much in line with my understanding and why I wrote: "...After death, you need death certificate and/or grant of representation - depending on the amounts involved, whether or not IHT is due, and the rules of the particular institution you're dealing with. ..." earlier.

I think that the rules have been relaxed somewhat in recent years - to avoid people having to borrow money to pay IHT bills. As I remember, National Savings and Halifax are two institutions which will allow money to be taken out by executors to pay HMRC directly.

I think that the Which guide "what to do..." is a bit out of date, but can highly recommend this book - https://www.amazon.co.uk/Probate-straig ... 0995759006

Cheers, W2S

 

[RogerS]

Checked with Which Legal. As has been suggested different banks have different rules and the amount of money that they will release ranges from £5k to £50k.The person taking the money usually has to sign a disclaimer agreeing to pay any IHT due. If they don't then the bank becomes liable.

That's pretty much in line with my understanding and why I wrote: "...After death, you need death certificate and/or grant of representation - depending on the amounts involved, whether or not IHT is due, and the rules of the particular institution you're dealing with. ..." earlier.

I think that the rules have been relaxed somewhat in recent years - to avoid people having to borrow money to pay IHT bills. As I remember, National Savings and Halifax are two institutions which will allow money to be taken out by executors to pay HMRC directly.

I think that the Which guide "what to do..." is a bit out of date, but can highly recommend this book - https://www.amazon.co.uk/Probate-straig ... 0995759006

Cheers, W2S

It was much easier than any of that. No death certificate. No probate needed. Just roll up and cash in !