Accessing funds in joint bank account post death pre probate

[OMGitsnotgood]

Would appreciate responses from those who know eg you work for a bank/solicitors/have direct experience.

if an adult child has joint account with a parent (parent's account but full joint access set up for ease of management while they are alive and i thought access after death, as LPoA only valid while they are alive).... I appreciate bank will need to be informed but can the child still access the funds to pay for expenses such as funeral, solicitors etc? Or will the bank freeze the account until after probate? I know if a couple have a joint account and one dies, you take the death certificate to the bank and the. the remaining partner can carry on using the account. I'd assumed it would be the same if the account was joint with a child, i can't see the difference, but a couple of people have told me that isn't the case as there are two other siblings who aren't joint account holders but will inherit. These people don't have any professional knowledge or direct experience, it's just what they think would be the case - which is why I'd like people who actually know to respond please.
Not an immediate issue but I want things sorted for when it does become an issue and there's so much else to deal with. Thank you

Do I understand correctly that the money in the account belongs solely to the deceased and that the child's access was as Attorney under an LPA?

Not legal sorry but…Halifax released my parent’s accounts within five days of me uploading the Will online and (I think) a copy of the death certificate. I wasn’t the only executor but the funds were released and account closed very quickly.
Once I notified them the account was frozen. Funeral costs are usually paid after the event.

I had a joint account with my Mum who died last month and it was just changed over to my sole name. The accounts she had in her own name have been closed and either have to wait for Probate or the balance has been/will be paid to me. I am the sole executor and beneficiary.

I've some experience in the area having worked in the past for a Trust Corporation Sole and with LPAs.

Joint accounts for an Attorney can get complicated as banks seem happy to treat them as ordinary joint accounts which pass to the survivor. This does not reflect the true position where the account is that of the Donor, to which the Attorney has access via the LPA and which will form part of the deceased's estate on death.

I'd expect the account to be frozen once the bank was advised of death but they'll usually release funds for (eg) funeral costs.

Is it a proper joint account? If so, the money is owned jointly and automatically belongs to the survivor which might not be morally right.

Or is it the parent's account but with the child having access? In that case the POA would automatically come to an end when the parent dies. Until probate is granted the executor would only be able to access the account for certain purposes eg paying the funeral director.

We had this situation last year after my mother died. My sister, brother and myself had power of attorney but obviously that ceased as soon as she died. Funeral costs were paid directly after the company send the invoice to the bank.

However, there was an investment type account with the bank with my brother as joint account holder, I’m not sure why mum did this but it was suggested by the FA who sorted out investments after my father died. My brother was able to close the account and access the money within days of her death. Luckily, we are a very close family and I held the paperwork for all mums finances as I tended to deal with that sort of thing after mum went into a care home. There was no concern about my brother closing the account, he immediately split the money between us four siblings.

Sorry if my OP wasn't clear. To try to answer several questions in one: I have LPoA, so could previously access the accounts and perform some actions with LPoA. However there were a couple of things I couldn't do, and knowing there would be a need to pay for things after death, when LPoA ceases, parent agreed to full joint account - the same as you might have with a partner. My siblings are aware and they know that I will split everything with them, that's based on trust but they know i wouldn't do anything untoward. If the money will automatically come to me as joint account holder, I'd be able to split the money with my siblings without waiting for probate, once we've paid all the relevant costs. It really doesn't matter if the account is frozen, I'll work around it, would just like to know in advance what is likely to happen.

Joint account is inherited automatically by joint holder. Just take the death certificate to the bank and they will take the deceased’s name off the account. Morally the joint holder should split the money with the others legatees but legally doesn’t have to.

If it’s not a joint account but accessed via Lasting Power of Attorney then the bank will release funds for a funeral on production of an invoice.

Thank you, that sounds very similar to us and that is what I thought would happen, it was friends who put doubt in my mind.

Sorry for your loss x

By the way, if the estate is small enough, probate may not be required.

Thank you, my siblings can trust me. That now begs another question: if that money legally passes to me automatically, is it considered outside of the estate for inheritance tax purposes?

Dh was poa on mil bank account. On death, and presenting the death certificate, the bank (co op) stopped the account except for paying bills on dd - so outstanding care fees/phone . Cash/ cheques no longer allowed.

All other bills that needed to be paid but were not on dd -eg house insurance were paid by Dh and the bill then passed to the solicitor dealing with her estate and he was reimbursed. Funeral was pre paid, but extra costs were met by the estate on presentation of the bill. We didn’t have to wait for ages for the solicitor to reimburse these. Although it did take nearly 2 years before mil estate was finally wound up.
All other bank accounts with other providers - savings /Isa were frozen at time of death according to the certificate date.

this was 3 years ago, so bank practices may have changes/may change in the future.

That now begs another question: if that money legally passes to me automatically, is it considered outside of the estate for inheritance tax purposes?
Probably not part of the estate, but depends on how the account is set up by the bank.

https://www.gov.uk/tax-property-money-shares-you-inherit/joint-property-shares-bank-accounts#:~:text=and%20bank%20accounts-,Joint%20property%2C%20shares%20and%20bank%20accounts,you%20owned%20with%20the%20deceased.

My dh has £5k in a joint account with MIL, and I have £10k with my dsis. Both accounts have been opened years.
We call it our holiday money but it's never touched - it's emergency/funeral money. We have LPAs set up but appreciate that there may be delays once triggered.

Wait op - if you had LPOA on the account (and your mum was the sole account holder) this is revoked on death and you would have to go through normal channels to release funds.

If you are a FULL joint account holder (like you would be with a joint account with a partner for example) then you both have full rights to the funds in the account and the balance transfers to the remaining account holder on the death of the other.

There is no legal or moral question - if the money comes to you as joint account holder then it is yours to distribute as you see fit.

I would say that there was a moral question if the reason that the OP was added to the account as joint holder was practical, i.e. the money was originally the OP’s DP’s money and the OP was added to the account to enable administration on behalf of the DP (simpler on a purely practical basis than LPA by the way as most banks don’t give executors the ability to operate online on behalf of the donor). Legally it’s then the OPs money but not morally.

Thank you, although this is a little different as I have joint account access as well as LPoA

Thanks for the link. Sounds like i might need to speak to the bank anyway based on 'depends how the account was set up' . I didn't know there were different types of joint accounts

This is what i thought and what the bank led me to believe also. I raised the OP as a couple for friends separately seemed to suggest it wouldn't be that straight forward.

To stress, even if the money was legally mine, there is absolutely no question that I would do the right thing by my siblings. Have put that in writing to them.

It's not part of the estate, but it is still taxable - you'd declare 50% of the value in a separate section when filling in the IHT form.

Ask your bank about the terms and conditions for the particular type of account you have with them.

If suggest it’s likely the survivor gets whatever’s in the account. However not sure if it’s the same if it’s a minor. Ask.

From my experience of joint account with late DH. All funds became mine as I was now the remaining owner of the account. Bank just changed name to mine on sight of death cert. Funds in the account were not part of DH's estate so not subject to probate. I also had POA which ceased on death.

Oh and if it’s in the child’s name it’s unlikely he/she will have to pay tax on any gift she is left. Presumably.

It's not part of the estate, but it is still taxable - you'd declare 50% of the value in a separate section when filling in the IHT form.

That makes sense, thank you. I feel morally that it all should taxed be as not technically my money, but am not going to fret about that! can sort all of these details out when the time comes, it was more about what I can access immediately after death, purely for practical reasons not 'grabby'.

From my experience of joint account with late DH

There is no tax of any kind to be paid on transfers of assets between spouses, so not really analogous to OP which is about a joint account where tax would usually be payable on transfers between two people who are not married or in a civil partnership.