Cash withdrawals before testators passing

[nimrod2020]

A person dies, let's say on 1st May. His will is proven and two administrators are appointed, both of whom are equal beneficiaries.

Beneficiary #1 lived close to the testator and helped with shopping and paying bills etc. To enable this, Beneficiary 1 was in possession of the bank card.
Beneficiary #2 lived a bit further away, and was a regular visitor, but had no bill paying duties and never had possession of the bank card.

Following the death, Beneficiary #2 has come across some of the testators bank statements for the last few years of his life. These statements show a regular pattern of withdrawing money from the account at ATM machines, which far exceed any legitimate purchases. Indeed, almost all the income has been withdrawn at cash ATMs.

Before Beneficiary #2 confronts Beneficiary #1 regarding these withdrawals (and other 'spending'), does Beneficiary #2 have any rights regarding monies that was used prior to the date of the testator's passing ? Or even the right to ask for an explanation ?

[atticus]

First question - are the sums worth falling out over?

Yes you can ask. What action depends on the answers (or lack of answers).

[nimrod2020]

First question - are the sums worth falling out over?

Yes you can ask. What action depends on the answers (or lack of answers).

Beneficiary 2 considers the sums significant, running at approx £1000 per month, every month; and possibly for 5-6 years. It adds up quite nicely.

Beneficiary 2 would like to take the view that these monies should have stayed in the account, consequently increasing the estate and the resulting inheritance.

But does Beneficiary #2 (an administrator) have any actual rights to pre-death investigations ?


I'm torn on this one, but i strongly suspect that if £50 million had left the account 1 day before the death, then there would be a case to answer ? Or is it a case of tough luck and eyebrows raised.

[atticus]

As I said before, the answe to your first question is yes.

Is this other person a co-administrator with you?

[nimrod2020]

As I said before, the answe to your first question is yes.

Is this other person a co-administrator with you?

Both the beneficiaries are also the administrators (only 2).

I am not directly involved, only in trying to support Ben 2.

[Mal161]

Beneficiaries could ask the administrators to account for the financial statements showing those withdrawals. I believe that they are responsible to have looked at the financial position within their duties as administrators

[PallasAthena]

Did the deceased have full mental capacity up to when they died?

Did Ben 1 have any formal.Power of Attorney or was it all an informal arrangement?

Are those involved family members? Ie, is this a father and his two children?

I agree with Atticus that the start point is to ask the other administrator about the money.

In principle one of the duties of an administrator/executor is to recover money owing to the deceased so it would be legitimate for an administrator to establish whether those payments should paid back to the estate. In cases like this though, particularly if the administrators are family members, it can be difficult in practice to get to the bottom of what was happening. Typically it is undocumented and the person taking the money may simply claim that deceased had agreed to it.

[PallasAthena]

Another reason why the administrators will need be clear about the reason for these payments is if the estate is large enough to need an IHT declaration to HMRC. Gifts made by the deceased in the 7 years before death might have to be included as part of the value of the estate.

At this stage whether they actually will be subject to IHT isn't important but it gives Ben 2 another legitimate reason for asking Ben 1 to disclose the reasons for the withdrawals. Both administrators (if both are named on Probate) would have to sign any declaration to HMRC attesting to the truth of the information provided. Giving information knowing it to be false is an offence of course.

[nimrod2020]

Beneficiaries could ask the administrators to account for the financial statements showing those withdrawals. I believe that they are responsible to have looked at the financial position within their duties as administrators

Good points, thanks.

[nimrod2020]

Did the deceased have full mental capacity up to when they died?

Did Ben 1 have any formal.Power of Attorney or was it all an informal arrangement?

Are those involved family members? Ie, is this a father and his two children?

I agree with Atticus that the start point is to ask the other administrator about the money.

In principle one of the duties of an administrator/executor is to recover money owing to the deceased so it would be legitimate for an administrator to establish whether those payments should paid back to the estate. In cases like this though, particularly if the administrators are family members, it can be difficult in practice to get to the bottom of what was happening. Typically it is undocumented and the person taking the money may simply claim that deceased had agreed to it.

Mental capacity = yes.
Power of Attorney = yes, Ben 1 had a "normal / general POA"
relationship = both beneficiaries are cousins to each other and were nephews to the deceased. so very much a family situation.
Atticus = I agree. Ben 2 intends to attempt to get all bank statements and then ask Ben1 to account for the withdrawals in front of their solicitor (which won't count for much but I'm sure that the solicitor will think its a fair question and that Ben 1 should answer it).

Repayment = I agree with you, I strongly suspect that Ben1 is simply going to claim that the deceased agreed to everything and brazen it out. The whole family won't believe him - but what can you do ?

[nimrod2020]

Another reason why the administrators will need be clear about the reason for these payments is if the estate is large enough to need an IHT declaration to HMRC. Gifts made by the deceased in the 7 years before death might have to be included as part of the value of the estate.

At this stage whether they actually will be subject to IHT isn't important but it gives Ben 2 another legitimate reason for asking Ben 1 to disclose the reasons for the withdrawals. Both administrators (if both are named on Probate) would have to sign any declaration to HMRC attesting to the truth of the information provided. Giving information knowing it to be false is an offence of course.

I agree that this is a good tactic for Ben2 to pursue some dialogue with Ben 1.

Unfortunately for Ben2, Ben1 worked alone with a solicitor to obtain probate, and I don't think that the solicitor would have had sight of the bank statements (except perhaps a 'balance' £ amount ).

Although the value of the estate is quite large, it is a farm and therefore there are enough reliefs available to bring the value well under the IHT thresholds (at least that is my layman's understanding).


many thanks for your help.

[Mal161]

I am in a similar position with almost identical money going missing, However, despite obtaining a few bank statements from the other administrator (executor in my case) I am now obtaining several years bank statements by writing to the bank stating my position as administrator, giving a copy of the death certificate and my own ID and they are sending the statements from 2017 to 2025. I can then check to see what went out that is not accounted for and start asking questions. If it is found that the other 'administrator' took money for themselves before the death, then if they do not agree to deduct that amount from their inheritance, then other action could be taken in legally. You are legally entitled to see whatever you wish before Probate and if the other administrator is a rea; problem, then you could apply to the Probate court to have them removed.

[nimrod2020]

I am in a similar position with almost identical money going missing, However, despite obtaining a few bank statements from the other administrator (executor in my case) I am now obtaining several years bank statements by writing to the bank stating my position as administrator, giving a copy of the death certificate and my own ID and they are sending the statements from 2017 to 2025. I can then check to see what went out that is not accounted for and start asking questions. If it is found that the other 'administrator' took money for themselves before the death, then if they do not agree to deduct that amount from their inheritance, then other action could be taken in legally. You are legally entitled to see whatever you wish before Probate and if the other administrator is a rea; problem, then you could apply to the Probate court to have them removed.

Thanks Mal, good luck with your case.

[JoBo21]

If some of these are eventually classed as gifts, given within 7 years of death, who would pay the IHT, assuming there is some to pay and they dont/cant pay the estate back? Would it be a debt of the beneficiary or the estate?

[PallasAthena]

Generally speaking the estate has to pay the IHT and executors must pay it out of the funds under their control. The beneficiaries are not normally liable to pay the estate any IHT incurred by the estate.

In exceptional situations eg where the estate has no money to.pay IHT then HMRC have reserve powers to recover IHT from beneficiaries.