Functioning business account frozen following owners death

Discussion in 'Legal' started by Howdoidothis?, Mar 14, 2019.

  1. Howdoidothis?

    Howdoidothis? UKBF Newcomer Free Member

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    Following my fathers death I took steps to ensure business continuity whilst a buyer was sought.

    The accountants had access to my fathers accounts and were able to invoice and make payments for wages and supplies, whilst the lads in the unit continued day to day operations.

    The accountants knew my father and his business and it was an easy decision asking them to look after the financial side of things as a temporary measure.

    I've just heard from them today that their access has been frozen following the solicitor notifying the banks of my fathers death.

    Is anyone familiar with such events and can they offer any advice as to how to put the accountants back in charge of my fathers businesses financial affairs. They had access to his business account and suppliers were set up as payees.

    I suspect the solicitor as executor (I'm the other one, but have my own job and a baby due next week) could possibly do this but I'd ideally prefer to reinstate the arrangement with the accountants.

    Can anyone advise a way to reinstate them and if so how quickly this can be done? I fear the business crashing if no one is looking after the finances.
     
    Posted: Mar 14, 2019 By: Howdoidothis? Member since: Feb 12, 2019
    #1
  2. Scalloway

    Scalloway UKBF Legend Free Member

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    Was your father a sole trader?
     
    Posted: Mar 14, 2019 By: Scalloway Member since: Jun 6, 2010
    #2
  3. Howdoidothis?

    Howdoidothis? UKBF Newcomer Free Member

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    Hi

    Hi was a sole trader with a few people working for him.
     
    Posted: Mar 14, 2019 By: Howdoidothis? Member since: Feb 12, 2019
    #3
  4. Scalloway

    Scalloway UKBF Legend Free Member

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    Posted: Mar 14, 2019 By: Scalloway Member since: Jun 6, 2010
    #4
  5. Alyson Dyer

    Alyson Dyer UKBF Regular Free Member

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    Nothing can be done until Probate has been granted unless there was a clause in the will allowing the executor to carry on running the business.
     
    Posted: Mar 14, 2019 By: Alyson Dyer Member since: Oct 27, 2011
    #5
  6. Mr D

    Mr D UKBF Legend Free Member

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    Some businesses can go months or years for sale before selling.
    And some never sell.

    The accountants I daresay will be aware of this.
     
    Posted: Mar 14, 2019 By: Mr D Member since: Feb 12, 2017
    #6
  7. Howdoidothis?

    Howdoidothis? UKBF Newcomer Free Member

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    Thank you all for your comments. There was a clause in the will specifying that the business could be run or wound up as I felt necessary. I have a buyer lined up and was hoping to keep things going as they were until the business could be sold.

    Ideally I’d like the business accounts unfrozen until the sale is completed but don’t know if this can now be done.
     
    Posted: Mar 15, 2019 By: Howdoidothis? Member since: Feb 12, 2019
    #7
  8. ServWise

    ServWise UKBF Ace Full Member

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    The account is unlikely be unfrozen, usually the bank will only allow a sum for funeral expenses to be taken (submitted from the funeral director) before probate is issued. Probate can be done within a few weeks (I did) if the situation is simple (mine was) but you may have things like inheritance tax to pay etc depending on the deceased's estate value.
     
    Posted: Mar 15, 2019 By: ServWise Member since: Jan 22, 2008
    #8
  9. Howdoidothis?

    Howdoidothis? UKBF Newcomer Free Member

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    Thanks. Oh dear, I had a feeling this wasn’t likely to have an easy resolution. I think probate may take a while. There’s the house (already valued), contents (getting valued today) as well as the business to consider. Unfortunately getting frozen whilst this goes on is likely to affect the running of the business.
     
    Posted: Mar 15, 2019 By: Howdoidothis? Member since: Feb 12, 2019
    #9
  10. AllUpHere

    AllUpHere UKBF Ace Free Member

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    If it's a sole trader business, it died when the owner died. You could set yourself up as a sole trader and take it over. That might be the only way to get accounts open and continue to trade.
     
    Posted: Mar 15, 2019 By: AllUpHere Member since: Jun 30, 2014
    #10
  11. TheWebDesignCompany

    TheWebDesignCompany UKBF Regular Full Member

    104 4
    Sorry for your loss. I was executor for my grandad, but didn’t experience any complications.

    Not any help regarding the situation with the bank, but it is worth allowing time to pass before you decide to keep or dispose of any personal items, I wish I had kept more of his things and now it is too late.
     
    Posted: Mar 15, 2019 By: TheWebDesignCompany Member since: Mar 11, 2019
    #11
  12. Howdoidothis?

    Howdoidothis? UKBF Newcomer Free Member

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    Thanks for your comments. I met my probate solicitor today. She is contacting the bank, but the accountants have advised setting up a new business account as a stop gap until the sale of the business can be completed. I’m coming round to the fact that this might be the best option even if it means setting up all the payments again. I’d rather that than things be frozen and risk the business folding.
     
    Posted: Mar 15, 2019 By: Howdoidothis? Member since: Feb 12, 2019
    #12
  13. Mr D

    Mr D UKBF Legend Free Member

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    Just out of interest - has anyone asked who is liable for the taxes on the business while its functioning after death?
    Sole trader the profit of the business is the income of the owner. Is your father still liable for the tax on profits since death too?
    No idea of the answer, perhaps something the accountants / probate solicitor should be aware of with the functioning business.

    My wife's father died a couple of years back, a few months after stopping self employment (worked until the age of 84). He shut down the business himself. Two years on my wife is still getting calls about stuff only he knew.
     
    Posted: Mar 15, 2019 By: Mr D Member since: Feb 12, 2017
    #13
  14. Howdoidothis?

    Howdoidothis? UKBF Newcomer Free Member

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    That's partly why I wanted to keep the business going as it was without too much change to muddy the water. But the accountants are keen to keep tabs on things and do the tax returns, whether from one account or two (old & new one). Ultimately the business will have to pay tax which will ultimately fall under his estate.
     
    Posted: Mar 15, 2019 By: Howdoidothis? Member since: Feb 12, 2019
    #14
  15. Clinton

    Clinton UKBF Big Shot Full Member

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    I'm not impressed by these accountants. They seem like right plonkers. They continued operating your father's bank account on a sole trader business even after your father died? And they didn't think there was anything problematic with that?

    Of course they are "keen to keep tabs" on things. They're making money out of it.

    It's a shame you're reliant on them to run the business. Otherwise I'd have suggested sacking them, setting up a new business and buying the assets of the old business (though it's a bit more complicated than that and you'd need to be properly advised).

    I don't understand their plan of setting up a new bank account to run the business. New bank account in whose name, your father's?!

    On a different matter, I'd be very surprised if your buyer proceeds with this purchase. There are far too many snags and even if he did buy it both the price and your warranty/indemnity terms will take a severe hit. You need to make moves now to formally secure the buyer's interest - an earnest deposit to cover exclusivity, a heads of terms, whatever! Buyers / investors tend to be nervous beasts. Even if they don't get cold feet, their advisers (accountant / lawyer) will likely advise them to pull out during DD.

    It's never a good idea to have just one buyer anyway! Deals where there's just one buyer have a 4x higher chance of collapsing before closing.
     
    Posted: Mar 15, 2019 By: Clinton Member since: Jan 17, 2010
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  16. Mr D

    Mr D UKBF Legend Free Member

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    That's the thing about sole trader businesses - they are tied to a person.
    Whose tax allowance will be used next tax year?
     
    Posted: Mar 16, 2019 at 1:30 AM By: Mr D Member since: Feb 12, 2017
    #16
  17. Howdoidothis?

    Howdoidothis? UKBF Newcomer Free Member

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    The accountants using my fathers account to pay wages and suppliers was a means to an end. It needed to be done and it was the only available option at the time. However I would have hoped my probate solicitor would have envisaged the freezing of accounts and advised accordingly.

    I’m coming to the conclusion we may need to request emergency probate and transfer ownership to myself until the business can be sold.

    Clinton

    Thanks for your further input. The sale is to longstanding employees who are keen to start up on their own with an established business. It’s a good opportunity for them and a quicker exit for me. They’ve seen the accounts and we’ve discussed terms. They are in the process of appointing a solicitor and I have already got one lined up. Hopefully they won’t get cold feet.
     
    Posted: Mar 17, 2019 at 10:25 AM By: Howdoidothis? Member since: Feb 12, 2019
    #17
  18. AllUpHere

    AllUpHere UKBF Ace Free Member

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    The 'business' doesn't actually exist any longer. Depending on the business type, if the staff want it, it would probably be very simple and easy for them to just take it. They could register as sole traders / a partnership tomorrow, open a bank account, and tell all the clients they have taken over, cutting you out completely.
     
    Posted: Mar 17, 2019 at 10:37 AM By: AllUpHere Member since: Jun 30, 2014
    #18