probate and will question
Discussion
A person may be nominated in the Will as a potential executor but does not actually become an executor with real powers over the estate until Probate is granted. For instance, banks will not release cash (except to pay funeral expenses, tax etc) until they have seen a copy of the Probate. As such, it should be impossible for the "executor" to interfere with the deceased's money until after probate has been granted - he certainly has no right to do so.
thanks claudia for your reply.
I know of an example though where it is possible for the executor to have access to assets, namely a property was sold before the deceased passed away but the sale only completed after the death of the owner. As such, and as the deceaseds bank accounts were closed, the solicitor had no option but to pay the proceeds into the executor/beneficiaries account, before probate has been obtained.
I know of an example though where it is possible for the executor to have access to assets, namely a property was sold before the deceased passed away but the sale only completed after the death of the owner. As such, and as the deceaseds bank accounts were closed, the solicitor had no option but to pay the proceeds into the executor/beneficiaries account, before probate has been obtained.
That's interesting thanks. It hasn't happened on this occasion for some reason, solicitor was happy to release funds to the named executor....I wonder if solicitor has made a mistake there....anyway, still uncertain whether executor/beneficiary would be doing anything wrong by spending any of it before probate obtained.
Cheers
Cheers
megaphone said:
A common process is to set up an 'executors account' which can be used to handle the deceased finances. Usually done at the bank where the deceased held their main account. Executors can pay money in and write cheques and pay bills where necessary, keeps it all above board.
The only bills that can be paid are (i) funeral expenses, and (ii) Inheritance Tax. Both of these are paid direct by the bank on behalf of the estate. The Executor doesn't get access to the account until after Probate has been granted and a certified copy given to the bank.It is very common for the Executor to pay small bills etc himself just to keep the world going round and then reclaim those expenses from the estate after Probate has been granted.
Craigybaby69 said:
That's interesting thanks. It hasn't happened on this occasion for some reason, solicitor was happy to release funds to the named executor....I wonder if solicitor has made a mistake there....anyway, still uncertain whether executor/beneficiary would be doing anything wrong by spending any of it before probate obtained. Cheers
In the situation you described it technically still shouldn't happen. However, it is conceivable a view has been taken that the risk is low on the particular facts.My real world experience of this is a little different.
Probate is only necessary if the assets are enough to be liable for inheritance tax. Therefore, banks etc. ask you if the estate is going through probate - if the answer is no, then they simply ask to see the death certificate and then hand over the cash.
Obviously if they were holding enough money to qualify for inheritance tax I'm sure their approach would be different. But they do not / cannot know the overall value of the estate so they pretty much have to take your word for it - because there is no probate if the estate is below the threshold, so they can't wait for it to complete.
Probate is only necessary if the assets are enough to be liable for inheritance tax. Therefore, banks etc. ask you if the estate is going through probate - if the answer is no, then they simply ask to see the death certificate and then hand over the cash.
Obviously if they were holding enough money to qualify for inheritance tax I'm sure their approach would be different. But they do not / cannot know the overall value of the estate so they pretty much have to take your word for it - because there is no probate if the estate is below the threshold, so they can't wait for it to complete.
Simpo Two said:
When I was dealing with it, it seemed that most financial institutions had their own limit where they would want more than just the death certificate but there didn't seem to be a global rule. And £15k was definitely not a limit I met a couple of years ago.The threshold for requiring Probate is not the same as limits applied by different banks etc on what they need to pay out and where. For example as Executor I was able to visit my late mother's bank with the death certificate, Will and ID - and they transferred c.£2K straight into my bank account.
I didn't have or need an Executor's account, nor a solicitor. My accountant did the crunching for £300. The estate didn't attract IHT but was a six-figure sum.
I didn't have or need an Executor's account, nor a solicitor. My accountant did the crunching for £300. The estate didn't attract IHT but was a six-figure sum.
So as a 6 figure sum presumably you had to obtain probate? And the £2k you received before obtaining probate? Bit of a personal question but did you/could you have spent the £2k before obtaining probate?
Edit: assuming you were the beneficiary
Edit: assuming you were the beneficiary
Edited by Craigybaby69 on Friday 13th March 07:32
Craigybaby69 said:
Hi, if someone is an executor of a will AND the only beneficiary, and they have already managed to collect some of the estate into their own account, is it illegal to spend any of that money until probate is granted?
cheers folks
What's the issue here, if they're the only beneficiary - are you anticipating that there could be other claims on the estate?cheers folks
No, confident there will be no other claims to the estate, beneficiary is an only child and will receive 100 percent of the estate. But obtaining probate can take weeks/months so wondering if it's illegal to spend inheritance before probate has been obtained. I can see how it doesn't look like there isn't an issue, but you know what the laws like, doesn't always follow logic
Craigybaby69 said:
No, confident there will be no other claims to the estate, beneficiary is an only child and will receive 100 percent of the estate. But obtaining probate can take weeks/months so wondering if it's illegal to spend inheritance before probate has been obtained. I can see how it doesn't look like there isn't an issue, but you know what the laws like, doesn't always follow logic
Well, who's going to complain? Creditors of the estate have first dibs on it, then beneficiaries. As long as the sole beneficiary doesn't dip so far into the pot that creditors end up being left unpaid, I can't see who is going to care about this.
Craigybaby69 said:
So as a 6 figure sum presumably you had to obtain probate?
Bet he didn't. Edited by Craigybaby69 on Friday 13th March 07:32
As I already said, HMRC told me that probate was only required if IHT was due, and the threshold for that is well into 6 figures (£350k or something from memory?).
The estate I was dealing with was around the 6 figure threshold, and - as I said - I did not obtain or require probate.
ETA : In response to the original question though, IF you do require probate my understanding was that the money could not be distributed to beneficiaries until probate was granted and any bills (especially IHT) were paid. If you are executor and beneficiary, then I'd expect you are "executor" until probate is complete / bills are paid and then you become "beneficiary". If you actually have the money already and start spending it I don't see how they'd know - but either way you obviously have to pay what's due when it's due.
Edited by davek_964 on Friday 13th March 12:17
Craigybaby69 said:
No, confident there will be no other claims to the estate, beneficiary is an only child and will receive 100 percent of the estate. But obtaining probate can take weeks/months so wondering if it's illegal to spend inheritance before probate has been obtained. I can see how it doesn't look like there isn't an issue, but you know what the laws like, doesn't always follow logic
Why are you concerned though? Does people committing minor motoring law transgressions bother you?It's absolutely standard practice, but very dodgy, for families to divi out the dosh amongst themselves, telling as few people as possible, even when there are several interested parties, never mind just one.
What does catch these people out quite frequently is for the DWP to come back 6-9 months later and ask for a hefty sum as it turns out the deceased was getting benefits, particularly pension credit, which they weren't entitled to.
davek_964 said:
As I already said, HMRC told me that probate was only required if IHT was due, and the threshold for that is well into 6 figures (£350k or something from memory?).
The estate I was dealing with was around the 6 figure threshold, and - as I said - I did not obtain or require probate.
They're the HMRC requirements - there's a whole bunch of other reasons why probate is needed. My Mum had to get it when my Dad died as some of the places handling is savings demanded it. They had money all over the place, but still well away from any IHT threshold.The estate I was dealing with was around the 6 figure threshold, and - as I said - I did not obtain or require probate.
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