It is easy to overlook the problems which can be encountered when accessing funds on the death of a spouse or partner. Simple planning can avoid these difficulties.
Bank accounts (and all other assets) in the name of the deceased are immediately frozen on death but invariably bills still need to be paid.
Many creditors are understanding and are prepared to wait until probate is granted when assets are released. Others are not so kindly and pester for payment or, in the case of staff such as a gardener or cleaner for example, they do need to be regularly paid.
What can you do to avoid leaving your spouse or partner in an embarrassing situation particularly if you are the principal provider?
You should anticipate probate taking up to six months to be granted depending on the complexity of your estate. We at Wedlake Bell try and achieve a Grant of Probate much sooner but valuations for example of personal chattels where there are high values involved, can be frustratingly slow.
If funds permit, it would be sensible to open a bank account in the spouse/partner's sole name in which you deposit sufficient funds to cover living expenses for a period. There are no tax implications in this if you are married or in a civil partnership. A transfer of over £3,000 in the year to an unmarried partner is a gift which could eat into your nil rate band allowance which is currently standing at £325,000, if you do not survive for seven years.
Alternatively, you could hold a bank account in your joint names – such account will automatically become the survivor's on death on presentation of a death certificate only and can continue to be used by the survivor. Do remember, however, banks need to go through the usual elaborate ID checks for a new name to be introduced on an account so it is worth doing this while you are fit and can still take the necessary action. Once again, there are no tax implications except if you are not married or in a civil partnership.
Undertakers are now not as amenable as they used to be and they too expect payment almost immediately following the funeral. This no longer presents a problem as banks are prepared now to settle undertakers' accounts directly, when requested, on receipt of any invoice relating to the funeral and its ancillary parts. If you have not entered into a funeral plan with an undertaker, therefore, it would be sensible to hold sufficient monies on a deposit account at your bank to cover funeral expenses.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
