What is an Executor Account?
What is an executor account?
An executor account is a special banking account that enables the estate’s executors/administrators to gather all of the deceased’s cash assets in one place. The deceased’s assets will be collected at different points throughout the administration of the estate and will be held in the executor’s accounts until all of the assets have been collected and are ready to be distributed. Executors can access the funds in the account during the administration of the estate but only for costs associated with the estate’s administration, these can include paying for funeral arrangements, probate and administration costs or paying creditors. Once the administration and distribution has been completed the account will be closed.
How do I open an executor account?
To open an executor account, banks will require that applicants have a Grant of Representation or Grant of Probate if they are in England or Wales, or a Grant of Confirmation if they are in Scotland. A Grant of Representation may be applied for by the individual or through a solicitor. The individual must have already completed the probate application and the inheritance tax forms in order to receive the grant or confirmation. Once an individual has the Grant or Confirmation he may then apply at a bank to open this specialised executor account.
Do I have to open an estate account?
There is nothing legally forcing an executor to open an executor account but it is recommended that they do. If an executor chooses not to open an executor account, it is still recommended to use an independent bank account separate from their own finances. This helps to ensure the protection and isolation of the deceased’s assets which can help avoid contention between beneficiaries. It can also make detailing the assets and their values easier and more transparent when creating a set of accounts for the estate at the end of the administration.
The deceased person’s account can not be used in place of an executors account this is because an institution will require proof that a person accessing the funds in the account, who is not the account holder, has the legal authority to do so. This legal authority usually comes in the form of a grant of probate. Until legal authority has been proven a bank will freeze any accounts the deceased held with them and prevent any money going in or out. This is done to protect the assets from misuse of the funds or ending up in the wrong hands. Once proof of legal authority has been provided the institution will release the assets and close the account preventing it from being used further.
Neglecting to inform an institution of the death and continuing to use the deceased’s account without proof you have the legal authority to do so could be considered fraudulent and can have serious consequences. It is essential that an executor informs the financial institutions and follows the correct procedures when handling a deceased’s assets.
If you are the executor of an estate that requires probate, speak to a member of our team on 08007318722 or send us an inquiry via our website.