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My Father's bank account - access to it

(9 Posts)
MzTake Tue 06-Jan-15 10:06:46

My dad died a couple of months ago and we're slowly getting all paperwork etc sorted.
I was POA for dad and have a debit card for his account (which we've been using for all the funeral expenses etc)
We have just discovered that dad's estate will take us in to the inheritance tax level.
Dad still has 40k in his account and we're wondering (sister and I) if there would be any issues with us withdrawing his money/spending it by card before we have to make the trip to the solicitor and get the estate finalised.
(We do know that the only recipients are my sister and I and we actually want to use some of this money to make gift to close family relations)

Mumblechum1 Tue 06-Jan-15 13:42:51

No, I'm afraid that is a big no-no! If your dad's estate is over the IHT threshold of £325k for a single person or £650k for a widower then tax will apply at 40% for however much the net estate is worth over that sum.

Sorry if I'm misunderstanding what you mean but it sounds as though you're trying to evade tax which could put you into very hot water.

catslife Tue 06-Jan-15 14:15:14

Be careful OP the solicitors will expect you to produce all receipts and prove that the money spent on the debit card was used for funeral expenses. Am surprised you have had access to the account for a couple of months, when a close relative's dad died recently his account was frozen within days and all the bills and funeral expenses were paid through the solicitors.
As well as funeral expenses the following expenses can be deducted from the estate: solicitors fees for estate admin and selling house, any income tax owed by the deceased, utility bills etc., estate agent fees for selling house. Also any monthly pension or other benefits paid into his account may need to be repaid if he didn't live for the full month iyswim. So it could be that all this lowers the total estate amount.

greenfolder Tue 06-Jan-15 18:50:31

The account should have been frozen. Did you tell the bank that your father had died?
My dads account was frozen, with the bank settling the funeral expenses directly and then only paying the balance when probate was granted. Are you an executor?

MzTake Tue 06-Jan-15 19:45:05

Mumblechum - my mother died 12 years ago just before the current IH laws changed and the solicitor tells me we've used up that proportion and that dad has a 350k allowance (which is tied up in his house which we'll have to sell) I don't understand any of it.

How is an executor decided?

PurpleWithRed Tue 06-Jan-15 19:47:52

Was there a will?

MzTake Tue 06-Jan-15 22:50:11

Yes - why? Everything is left to my sister and me.

MrsCosmopilite Tue 06-Jan-15 23:01:00

I'm sorry for your loss.

I have had to deal with estate matters quite recently, and the way things are headed right now, will have to do so again within the year.

You can check the inheritance tax information online, via the Inland Revenue. If you look at the details of the year/month your mother died, you can see what would be permitted to be 'added' to the sum your father left.
From this amount, you deduct what has been spent already.

I'm still getting to grips with POA as the banks I've had to deal with of late (not related to previous estate dealings) appear to be training their staff in gross stupidity and document loss.

Please make sure you have receipts and records for all expenses. If you and your sister are sole beneficiaries of the will then there should be few difficulties in getting matters finalised. Inheritance tax would be payable on whatever moneys are held which go above the current threshold, AFAIK.

prh47bridge Tue 06-Jan-15 23:58:59

How is an executor decided?

If there was a will it should state who the executors are.

As others have said, you cannot avoid IHT by withdrawing money from the estate.

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