Executor's account query

[charitynjw]

Hi all

My younger brother & I are executors for my (late) twin brother's estate.

Absolutely no problems with probate, beneficiaries etc. All is progressing without any problems whatsoever. (See, it can be done amicably! )

The query arises from a meeting with the bank. (Lloyds).

The (very nice) young lady there has advised us to transfer the 'money' portion of the estate into an executor's account.(It is currently in a sort of 'holding' account)

But the executor's account doesn't attract interest, whereas the holding account does.

Has anyone come across this before?

What would you guys advise?

Nb the house is still on the market after 2 years (Brexit?), so as yet doesn't figure into the equation (other than the fact that it might be some time yet before the will is settled.)

Only 1 other beneficiary (sister), & no great panic (so far!)

[des8]

I'd leave it earning a miserly amount of interest

There is nothing special about an executors account.
It is advisable to hold the money in a separate account, but that is all, and as your family seem to get along together there should be no probs.

[charitynjw]

Hi des8

Exactly the conclusion we are tending towards.

The 'money' portion is reasonably large (not enough to give up the day job, though ).

Seems daft not to get interest on it.

Also, I thought there is a general duty for the executor(s) to 'maximise' the estate. (If you see what I mean).

[des8]

Quite correctly the executors have a fiduciary duty to maximise the estate, but generally this means obtaining the best price for the assets.
There is also a duty to preserve the assets.
So if the executor opts for high interest and neglects the security aspect and loses the lot he will be in the doodah

[charitynjw]

Quite correctly the executors have a fiduciary duty to maximise the estate, but generally this means obtaining the best price for the assets.
There is also a duty to preserve the assets.
So if the executor opts for high interest and neglects the security aspect and loses the lot he will be in the doodah

So no 'fact-finding' jolly to the Beeehamas, then?

[Peridot]

Hi Charitynjw,

Sorry missed this one over the weekend. Yep agree with Des8. Have debts been dealt with? Could an interim payment be made at this stage pending the house sale? With the way things are going at the moment it may be a while before the house sells unless the price is dropped hugely which no-one wishes to do.

Any specific legacies could be paid out and then you could get an indemnity from the residuary beneficiaries that should any debts come to light then they will be pursued for a share of the debt?

Maybe just a holiday to the Bahamas at this stage

[charitynjw]

Quite correctly the executors have a fiduciary duty to maximise the estate, but generally this means obtaining the best price for the assets.
There is also a duty to preserve the assets.
So if the executor opts for high interest and neglects the security aspect and loses the lot he will be in the doodah

No high interest account, so hopefully no doodah day for us!

[charitynjw]

Hi Charitynjw,

Sorry missed this one over the weekend. Yep agree with Des8. Have debts been dealt with? Could an interim payment be made at this stage pending the house sale? With the way things are going at the moment it may be a while before the house sells unless the price is dropped hugely which no-one wishes to do.

Any specific legacies could be paid out and then you could get an indemnity from the residuary beneficiaries that should any debts come to light then they will be pursued for a share of the debt?

*Maybe just a holiday to the Bahamas at this stage*

Hi Peridot

All outstanding debts have debts have been paid (HMRC were a nightmare!)

Have to admit though, this got me wobbling!

*Maybe Costa Del Luton?*

[Peridot]

Or a nice meal out at least

[charitynjw]

Hi Peridot

https://upload.wikimedia.org/wikiped...Chiang_Mai.jpg

As an aside
My brother' demise was within a year of my father's demise.
My deceased brother was a beneficiary of my father's estate, & as he died before my father's estate was finalised, his (brother) share became part of his estate.
I read the HMRC 'rules' on this, & my take on this is that there should be no Inheritance tax on that portion.
But HMRC has said "Computer says NO!"

Any thoughts?

[Peridot]

Hi again,
I'm not sure you have interpreted the rules correctly I'm afraid. My understanding would be your father's estate would have IHT due unless an exempt estate eg leaving everything to spouse or below Nil Rate Band threshold. Any inheritance passing to another person who dies after the testator but before distribution for example would have the legacy amount included in their estate value for the calculation of inheritance tax. They received the money (or their estate did), unless there was a clause in the Will something along the lines of, if a beneficiary died within 28 days of the testator then their legacy would pass as if they had pre-deceased the testator (and therefore bypass the beneficiary and go to the substitute for example, then the sum would be treated as part of the beneficiaries estate and therefore included in their inheritance tax calculation.

I will have a search about and see if I can find anything further to add, but in the meantime can you point me to where you believe this 'exemption' is in the rules?

[charitynjw]

Hi again,I will have a search about and see if I can find anything further to add, but in the meantime can you point me to where you believe this 'exemption' is in the rules?

Lol!
Not off the top of my head, I can't!
I'll have a nosey on my records

I'll be back!

[Peridot]

Hi again,

I wonder if this is what you were thinking of? https://www.gov.uk/hmrc-internal-man...nual/ihtm06035
So if a deed of variation were made the estate could be 'redistributed' although it appears that the inheritance would still have to be included in the 2nd estate but a 'relief' claimed in the IHT 400.

If an Deed of Variation hasn't been entered into then the claim for relief wouldn't be possible. So far the only thing I have found that may be along the lines of what I think you mean?

[charitynjw]

Cheers Peridot

Looks like that might be it.
Mr Shylock at HMRC wins again!

Unfortunately I can't access my emails which I sent to my co-executor.
I suspect that's due to this!

I've tried 'phoning him, but as 'nobody home' atm

I'll try later.

[charitynjw]

Hi Peridot

Found it!

Bit of background info.
My mother died first, so my father's estate included her portion (suitably time-adjusted by HMRC).
Father died - estate was a little over the threshold (circa £60k?) - all sorted with HMRC.
Brother died within 1 yr of father.
As far as I can see there is a sliding scale for QSR?