I have joint and several power of attorney and also am joint on my Mum’s bank account. When her house sells should the funds go into her joint current account or an executor account? Is an executor account only for after someone is deceased? My sister who has joint and several LPA with me wants us to use an executor account. Not sure what is right. Grateful for advice.
Proceeds of house sale in current account or executor account
- Thread starter stevie green
- Start date
An executor account is to hold the assets of a deceased person. Maybe open a new ( not executor ) bank account in your Mums name only for the house money.
Remember the rule that only £85000 is covered if the bank goes bust. You have a 6 month grace period to sort it, but after that need to make sure the money is spread with different banks.
I am only writing from my experience and I’m not an expert.
Remember the rule that only £85000 is covered if the bank goes bust. You have a 6 month grace period to sort it, but after that need to make sure the money is spread with different banks.
I am only writing from my experience and I’m not an expert.
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Hello @stevie green yes, you are right, an executor account is for use after someone has passed away and is useful for probate purposes. You mention that you have a 'joint account' with your mum - do you mean that this is an account in your mum's name which you are named on as LPA? I have joint and several LPA with my sister and one of us is named as the LPA on mum's current account and when we sold her house the proceeds went into this account, paid in by the solicitor who handled the sale.
If your mum has lost capacity to manage her finances herself then, if you have not already done so, you should register the LPA with the bank and they can then arrange for her account to be managed by an LPA. It's not a good idea as LPA to mix your own funds in the same account as the donor (your mum), it's best to keep your and her finances completely separate. Mum's bank specified that one of us could manage her current account but I'm not sure if other banks will be fine with two LPA's managing the same account, something you could speak to them about.
If your mum has lost capacity to manage her finances herself then, if you have not already done so, you should register the LPA with the bank and they can then arrange for her account to be managed by an LPA. It's not a good idea as LPA to mix your own funds in the same account as the donor (your mum), it's best to keep your and her finances completely separate. Mum's bank specified that one of us could manage her current account but I'm not sure if other banks will be fine with two LPA's managing the same account, something you could speak to them about.
I have a joint account with my mum that we opened together after my dad died so that I could pay her bills etc remotely, all the money in there is hers . About a year later she was diagnosed with dementia and we got the LPA sorted. When I sold her home so that she could pay for residential care the money was paid into our joint account and then I separated it out into new accounts in her name only with me as attorney to keep in line with the FSCS regulations. The joint account is still her main account for payments and the funds are still all hers , it just makes like a bit easier. Obviously once she dies the funds from this account will all be considered hers and managed in line with her will go which I am an executor.
Not suggesting this is the only way to manage but it’s what we did and we did get financial advice along the way.
Not suggesting this is the only way to manage but it’s what we did and we did get financial advice along the way.
Thanks all, really helpful. Yes I am similar to SAP as became joint account holder on my Mum’s current and savings accounts when my Dad passed away 10 years ago. I have managed Mum’s finances and paid her bills in this way. I don't put my money in these accounts. My sister and I also have joint and several LPA. She now wants to join the current and savings account too in the same way that I am joint but bank say she can't as Mum has lost capacity so she can only act as LPA. She is not happy about that as there is a dispute between the two of us. I'm happy to do the executor account when Mum passes but for now if house sells I assume funds must go into Mum’s account which as I say I am joint on. This will enable me to pay County Council heavy and growing outstanding debt. Question is, can another account be set up to pay house funds into or not? Must it go to Mum’s current account? I assume it must....
Hello. I pay a lot of mums bills. We don’t have a joint account. The bank has given me a card where it says mums name ac number and then my name plus the word rep.
I also have full access to on line banking.
I have two brother. Inevitably one day the executive role will come into play. I feel this set up is cleaner.
Wishing you well
I also have full access to on line banking.
I have two brother. Inevitably one day the executive role will come into play. I feel this set up is cleaner.
Wishing you well
Unless I am reading this all wrong, does this statement mean that your mother or yourself had entered into a DPA (Deferred Payment Agreement) with the County Council?
If so then I expect that they would have taken the First Charge on the house, therefore they would need to be informed that the house is on the market or has been sold and they have first call on the proceeds of any sale and as such they must be in your mother's named account.
Colin
Yes you can absolutely set up another account in your mums name which is what I did. Sorry if I did not make that clear. Once the house is sold, the solicitor will want to pay it into an account that is in your mums name so either your joint one or a new one set up in her name with you and your sister at LPA ( although the bank will probably only have one of you as the named LPA, I’m nor sure)
Thanks all. We haven't set up a deferred payment yet but are well beyond the 12 week disregard and I think we perhaps should do the deferred payment to ensure the council debt gets paid. So in theory my sister could ignore my mums current account and set up a new account in Mum’s name with her as primary LPA for the house sale funds to go into and do this without my knowledge. Basically I'm worried I will be left with debt to pay council and no access to house sale funds to pay it off.
Ah that is a tricky situation, however as you and your sister are both LPA, should your mums account with you run out then your sister, as the person with any remaining money of your mums will have to take responsibility to pay the fees. So if that point got reached , you would have to tell social services or the home what had happened and who was responding for the finance I.e.your sister. As LPA she , like you has a responsibility to ensure that your mum can pay her way. The important thing is that it is your mums money and her debt not yours or your sisters. The people owed money can do the chasing around and I’m certain they will!
One issue with joint names on an account (as opposed to using someone's account via LPA) is that if the person dies, all monies are then considered to belong to the other account holder.
If all the monies in the account actually belong to your mum, neither your sister nor you would want this to happen, right?
It's something to bear in mind.
If all the monies in the account actually belong to your mum, neither your sister nor you would want this to happen, right?
It's something to bear in mind.
Just to point out if the joint account was opened whilst both parties had capacity it is considered 50/50 where ever and from who ever the money deposited in to comes from.
Ie if the house sale money was paid into it, and the account then closed, legally each named account holder is entitled to 50%.
Ie if the house sale money was paid into it, and the account then closed, legally each named account holder is entitled to 50%.
I will open a few accounts to get around the compensation guarantee of £85k. I’ll also utilise Mums ISA allowance for this year. I’ll open them in Mum’s name with me as LPA - and budget the money back into the current account to pay the fees. It’s a cash flow spreadsheet - I have already done it for my Uncle so should be fine. I find physically visiting a branch easier than online/phone (my usual approach) as the POA can be complicated (or more to the point the banks make it so).
Need your and the account holders ID. Mum doesn’t have real ID like passport, driving licence. A letter from DWP and a letter from the care home usually suffices - another reason why a branch visit is easier.
Need your and the account holders ID. Mum doesn’t have real ID like passport, driving licence. A letter from DWP and a letter from the care home usually suffices - another reason why a branch visit is easier.
It’s a bit of a headache sorting other people’s money, even with a LPA, as I have found. We are just investing the proceeds of our PWD’s house sale, and being mindful of the £85,000 guarantee limit. Lots of providers share a licence so you have to ensure you don’t fall into that trap. Once we have got to the max at our chosen providers, we are investing the remainder with NS&I who have no such limits, every £ is covered, and they have some competitive products. Good luck!
When my mum died my dad put my name on what was their joint building society savings account. I never paid any money into it or took any out. When my dad died, that money was automatically transferred into just my name, Probate/Inland Revenue even discounted it.
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