Distribution of funds before probate received

[ilkleyal]

Hi there. I am administering an estate which will have a value of approx. £300K after paying any debts. There will be no IHT liability. There are two beneficiaries, receiving equal portions of the total estate.

Funds (£20K) have been received from one bank without the need for a Grant Of Probate. Is it possible to pay the debtors (not funeral, but things like council tax, gas, elec, house insurance etc.) from the funds received, and then perform an interim distribution of the remainder of the funds now, or must I wait for receipt of Grant of Probate before any payments and distributions are made.

Many thanks

[des8]

Re: Distribution of funds before probate received

Hi and welcome

As the bank has released funds of £20,000 (against a letter of indemnity?) presumably there is a will, and you are appointed executor.

There is a priority order for debts:
1 secured creditors
2 funeral expenses
3 testamentary expenses
4 Preferred and preferential debts
5 unsecured creditors (those you intend to pay)
6interest due on unsecured debts
7deferred debts

As Executor you will legally own all the assets from the time the testator die but you may not take any of the assets into your possession nor dispose of them until the will has been "proven" and your position as executor is confirmed by a Grant of Probate

So I would not pay any other than te first two on the list prior to obtainig the grant and posting a Sec 27 notice

[ilkleyal]

Re: Distribution of funds before probate received

Hi des8

Many thanks for the prompt reply. What you have said is quite clear, and so I will keep the funds received in a separate account, and add any interest received to the estate value. No doubt income tax will be due by the estate on the total interest received, but hoh hum...