A question recently asked was, do executors have to open deposit accounts for dealing with the estate?
The reason for the question being asked was that executors were experiencing difficulties with Banks, who were reluctant to open deposit accounts in these circumstances.
The obligation of executors is only that a bank current account should be opened in the name of the executor (or administrator in the case of an Intestacy), but designated to show that it is on behalf of the estate of the deceased. Most current accounts now pay interest (however low the rate) in any event, so the Personal Representative is discharging his or her obligation to maximise the estate of the deceased. The account is of course, only retained until completion of the winding up of the estate, after which it should be closed as soon as possible.
Some wills refer to both executor and trustee so it is not always clear which should apply. Most wills are quite simple and the estate of the deceased can be collected in and distributed in a reasonably short time scale without the need to open an interest bearing account. Not all wills are straightforward however and care needs to be taken if the terms of the will are such that the status of the executor changes to that of trustee. In those circumstances, it may be appropriate to open a trustee deposit account. Such accounts are likely to be required for a much longer period of time than an executor’s account, and the responsibilities of trustees are more onerous than for executors, making a deposit account appropriate.
For those executors who do then become trustees, you may find actually opening a trustee bank account a rather difficult process, on which there is much discussion amongst professionals in the wills and probate business at the moment.
About the author
Roger Pratt is a Partner and Head of the Private Client Department of Hopkins Solicitors LLP, and a member of the Society of Trust and Estate Practitioners. If you have a legal question on Wills, Probate, Intestacy, Trusts or any related matter, please contact Roger.