Do Bank Accounts Have to Go Through Probate?
12 September 2018
By Probate Case Manager, Lydia Durkin
When someone dies, their bank may request a Grant of Probate before they will release any funds from the deceased's accounts. However, this is not always the case. We explain when bank accounts do and don't have to go through Probate.
Notifying the Bank
As the Executor or Administrator of someone's Estate, one of your responsibilities is to notify all relevant people and organisations of the person's death. This includes their bank.
When a bank is notified of the death of one of their account holders, as a general rule, all of their bank accounts are immediately frozen. Although there are some exceptions, it is usually illegal to share out the Estate, or to extract money from the Estate, without a Grant of Probate or Letters of Administration.
Nevertheless, there are some assets which may not have to go through Probate, these being:
- Assets of very low value
- Jointly owned assets (except those owned as tenants in common)
- Assets that have been gifted before death
- Assets left to specific Beneficiaries in the Will
- Gifts made in Trust to specific Beneficiaries.
Where a bank account was jointly held with a spouse or another individual, the surviving individual will become the sole owner. In order for the account to be transferred into their sole name, they will need to provide the bank with the death certificate.
Usually an appointment will need to be made with a local branch and some paperwork will need to be completed, but the account will not need to go through Probate before it can be transferred to the surviving joint owner.
Sole Accounts of Low Value
Many banks and other financial institutions will not require sight of the Grant of Probate or Letters of Administration if the account value is below a certain amount. This threshold is determined by the bank, and as such this varies for each bank and financial institution. For more information, see Bank Limits for Probate.
Following years of protest by consumers, in 2015 UK banks raised the limits on monetary release for Probate purposes. This increase saved many families the need of having to apply for Probate or instructing Solicitors to do so on their behalf.
If the amount held in the bank account is below the required value then the bank may only require sight of the original death certificate and any Will the deceased left, as well as some ID.
If you have a sole account but would like someone else to be able to access to your funds, while you are still alive, in the event of injury or illness, you may wish to consider putting a Lasting Power of Attorney in place. This is a legal document in which you can appoint someone you trust as an 'Attorney,' granting them legal authority to manage your finances on your behalf. However, it's important to note that a Lasting Power of Attorney becomes void upon death.
Paying Funeral Costs and Inheritance Tax Bills
If the value of the account is over the threshold, then a Grant of Probate will be required. In the time between the date of death and the Grant of Probate being obtained, the Executor is only able to access funds for funeral payment or payment of any Inheritance Tax bills. This can be done by providing the bank with the funeral invoice or correspondence from HM Revenue & Customs.
With our Complete Probate Service, we can take care of all of the tax work on your behalf, including calculating how much Inheritance Tax is due, liaising with HM Revenue & Customs and arranging payment. Furthermore, we can pay all the costs of a Co-op Funeralcare funeral (providing that the Estate has sufficient assets which can be sold to repay our costs in due course).
Co-op Legal Services is the largest provider of Probate and Estate administration services in England and Wales, and is trusted to deal with over £1.3 billion in Estates annually.