ISAs & bonds after bereavement

[Inheritancequestions]

My dad has recently died and my DSis and I are in the process of notifying the relevant people. We are both executors and the sole beneficiaries.

He has some investments which include bonds and ISAs. When I contacted one bank, they asked whether I wanted the ISA to continue or not (presumably until we get probate and liquidate the assets).

What's the best thing to do here?

What are the pros/cons of allowing these to continue?

In the case of this particular bank, the amount in the ISA is quite a bit less than their threshold for needing probate to release the funds.

How much we talking?

If the ISA is fixed (1yr for example) you'll lose interest for cashing it in early. Im not 100% sure but would think this is what he meant when asking if you would like it to continue?.

£35,000 in this instance.

That might make sense. I was just going through the forms on the bank's website, following the bit to notify them of his death and it said asked me did I want the ISA to continue? I didn't know, so I just closed it down at that point.

I don’t believe you do in probate. Penalities are waived

I think I would have done the same OP. When my mum passed me and my brother just closed it all down, its a difficult and hard enough time as it is without fretting over a savings account. 💐

Do you have your own ISAs? When my Mum died her ISA was transferred into my father's ISA so he got the money tax free. And because it was a transfer it wasn't subject to the paying in allowance of £20k. So that might be why they're asking. I'd keep it and then transfer it once probate has been granted.

So you have closed them down? Is your sibling annoyed hence you asking here?

No, I've notified the bank that my dad has died but not done anyone else. My post was ambiguous - when I said I closed it down, I meant that I closed down the webform, not closed the ISA. Presumably I'll still need to decide what to do about the ISA.

Edit: typos

Is this a large estate? Are you using a probate lawyer?

You won’t be charged penalties for closing down an isa on matters of probate.

I would go for a clean break, empty them, and have them in the pot to be split

Only a spouse or civil partner can inherit the ISA allowance.

That is not correct

if there is no spouse or civil partner then goes in the pot to be distributed to beneficiaries

In my memory, you lose the tax-free allowance as soon as that person dies. So you can leave them in the account but you no longer get the ISA benefit. You don’t get any penalties for withdrawing them early.

ISA savings go to the named beneficiary in the will.

If your spouse or civil partner dies you can inherit their ISA allowance.

From:
www.gov.uk/individual-savings-accounts/inheriting-an-isa-from-your-spouse-civil-partner
.

This is consistent with what I was told when my father died (10 years ago so might be out of date). His ISAs stopped being ISAs and just became normal savings accounts.

They’re talking about the ISA allowance, not the actual money.