Death freezes bank account query

[DazedandConfused]

I've heard that you have to report a family death to their bank as soon as they die, and their bank account is then frozen.

This must be a very routine situation affecting everyone with a death in the immediate family, but can someone tell me, how do you go on paying the dead person's household bills and other costs that are likely to arise while probate and other things are being sorted out? We are the executors of my mother in law, who is in good health but very aged and we realise we will have to deal with this sometime in the next few years. We don't have the cash to run two homes for very long, even if one is "in mothballs", and if the utilities stop supplying in winter damage could arise.

Also, would it make sense for my husband to ask to become a joint account holder on her account? I understand this would stop it from freezing and allow him to use her own money to pay any expenses on her home, but I don't think this is usually done, so there must be a good reason why not. I don't know what it is, though.

Thank you for any advice or experience.

[enquirer]

Re: Death freezes bank account query

I've heard that you have to report a family death to their bank as soon as they die, and their bank account is then frozen.

In the absence of any other arrangements (joint account with either to sign, for instance) - Yes.

This must be a very routine situation affecting everyone with a death in the immediate family, but can someone tell me, how do you go on paying the dead person's household bills and other costs that are likely to arise while probate and other things are being sorted out?

It's usually best to open an executors account at the bank and to liquidate all the other accounts into it. The executors get a cheque book and use that to pay off whatever debts remain. This is the simplest and most straightforward method.

Also, would it make sense for my husband to ask to become a joint account holder on her account? I understand this would stop it from freezing and allow him to use her own money to pay any expenses on her home, but I don't think this is usually done, so there must be a good reason why not. I don't know what it is, though.

You could do that, but there will probably be a variety of loose ends to tie up, so see above.

[DazedandConfused]

Re: Death freezes bank account query

In the absence of any other arrangements (joint account with either to sign, for instance) It's usually best to open an executors account at the bank and to liquidate all the other accounts into it. The executors get a cheque book and use that to pay off whatever debts remain. This is the simplest and most straightforward method.

That is something you can do while going through probate? Thank you I didn't know that - are you allowed to do that because you are an executor and it's the same bank?

[enquirer]

Re: Death freezes bank account query

That is something you can do while going through probate?

If it's reached the probate stage, then it's a bit late in the day. However, since you will still have to liquidate any other assets and accounts, it will make things easier.

Parking money belonging to the estate in your own account would be a very bad idea. The DWP and HMRC are liable to draw all sorts of adverse inferences.

... are you allowed to do that because you are an executor and it's the same bank?

Yes, only executors can do it. The bank will want to see proof - of your ID, a copy of the Will, and a Death Certificate. It can be opened at any bank, although using your own should make it slightly easier as you are a known quantity.

[seduraed]

Re: Death freezes bank account query

If she is still alive then buy some life insurance . Get it Written in trust so that it does not enter the estate, and on death open an executors acount pay the procedes in then you have money to work with . If the estate attracts estate duties ensure that teh sum insured is large enough to cover the estate duties as you wont be able to get probate until this and all bills to HMRC and similar are paid .

[DazedandConfused]

Re: Death freezes bank account query

If she is still alive then buy some life insurance . Get it Written in trust so that it does not enter the estate, and on death open an executors acount pay the procedes in then you have money to work with . If the estate attracts estate duties ensure that teh sum insured is large enough to cover the estate duties as you wont be able to get probate until this and all bills to HMRC and similar are paid .

Thank you for the suggestion. She's 92 so I'm not sure if we could get insurance for her, but maybe I should look into this. Re Enquirer's comment, it shows how much I don't know ... I thought that the bank account could not be accessed until probate was complete, I had forgotten about things like death duties coming before probate. So if you are the executor, you can open an Executor's Account and bring the assets into that? Does that include the contents of her own bank account? That should enable the household bills to be paid at least. We are hoping that as she has my late FIL's probate, and he left everything just to her, she will have enough tax allowance in hand that she won't have to pay a great deal of death duties, but of course I don't know how they will assess it so we can't make assumptions. No I certainly don't want any money "not belonging to us" going into our bank account - we are self employed AFAE so that would be a very bad idea :-D But it would astonish me if any of her account holders would allow this. I am going to keep very careful accounts of what happens anyway as not only HMRC I am sure but the rest of the family will be watching like hawks :-)

[enquirer]

Re: Death freezes bank account query

I thought that the bank account could not be accessed until probate was complete, I had forgotten about things like death duties coming before probate. So if you are the executor, you can open an Executor's Account and bring the assets into that? Does that include the contents of her own bank account?

Probate is the process by which the validity of a will is assessed (the will is 'proved'), and the power of executor confirmed. In theory, nothing should happen until probate is granted. Even so, I have opened executors accounts whilst waiting for probate, simply by producing the documents mentioned above.

It is usually best to liquidate everything into the one account.