A parent's death does not create an FBAR duty by itself. The report still turns on the same two tests, a financial interest in a foreign account or signature authority over it, and on the $10,000 aggregate threshold. What a death changes is who can instruct the bank and where the money ends up. Those are the two moments at which an FBAR inherited account question begins, and the two at which it is easiest to miss.
This post is for US citizens and green card holders, in the UK or elsewhere, whose British parent has died. It follows the accounts through probate: the executor's position, the joint account, the estate account, the transfer to you and the filing itself. It sits under our guide to FBAR and FATCA for UK residents. The Form 3520 side of an inheritance has its own post, linked below.
Does a parent's death put their UK accounts on your FBAR
No. The FBAR asks what you own or control, not what you expect to receive. Your parent's accounts are not yours at the date of death, and a hope of inheriting them is not an interest in them. Reporting begins only if one of the tests is met by you personally, and each test has its own trigger.
The FinCEN guidance on foreign account reporting (opens the official FinCEN page in a new tab) is the starting point, and the FBAR page on irs.gov (opens the official IRS page in a new tab) confirms that the report goes to FinCEN rather than with your return. Three events can bring a parent's account into your report: you are a joint holder, you are able to instruct the bank as executor or attorney, or the money or the account is transferred to you.
Each of those can happen at a different time, which is why an estate often produces more than one year of reporting. An account that was jointly held for years may have been reportable long before the death. An estate account may be reportable for two or three years while the estate is administered. Inherited investments become reportable from the day they are yours.
When does an executor have signature authority over estate accounts
When the executor can control what happens to the money by dealing directly with the bank, alone or together with a co-executor. That is the FinCEN definition of signature authority. Being named in the will is not enough on its own. What counts is the authority the bank recognises, which is usually after it has seen the grant of probate.
GOV.UK explains that each bank sets its own rules about when probate is needed, and suggests that executors open a separate estate account. If you are a US person and you can instruct that estate account, you have signature authority over it, whether or not the money will eventually be yours. If the account is opened in your own name as executor, the owner-of-record question arises as well. The bank mandate and the account title decide it.
The Internal Revenue Manual on the FBAR (opens the official IRS page in a new tab) says that authority limited to buying or selling investments inside an account, with no power to pay money out, is not signature authority. That distinction can matter for an investment account run by an adviser. It is narrow, so check the mandate rather than assume. Our post on FBAR signature authority covers the mechanics for accounts you control but do not own.
- Estate account you can instruct as executor: report it as signature authority
- Estate account opened in your own name: also consider owner of record
- Co-executor in the UK who alone controls the account: your position depends on your own authority
- Probate not yet granted and the bank will not deal with you: generally no authority yet
- Account you ran for the parent under a power of attorney: signature authority in those years
What about a joint account you held with your parent
A joint account that you held with your parent is an account in which you had a financial interest all along. The IRS explains that when two or more people hold a foreign account, each holder has a financial interest in it and the full balance is reported, not a share. The death does not alter that for the years before it.
GOV.UK says that money held jointly normally passes automatically to the surviving owner and does not form part of the estate to be administered. For the FBAR this means the account stays on your report and carries on after the death with you as sole holder. It is easy to overlook because it never appears in the estate paperwork and the executors do not deal with it.
A parent's joint account with someone else, such as a sibling, is a separate case. If you were never a holder and had no authority, the account is not yours to report merely because the family has a stake in it. Our post on joint accounts with a non-US spouse sets out the full-balance rule in a different setting.
When does an inherited account become yours for the FBAR
From the point it is in your name or the money reaches an account you hold. An investment account retitled to you gives you a financial interest from the transfer. Cash paid out by the executors into your own UK account raises that account's highest balance for the year, and the account is probably already on your report.
Trusts need separate care. The Internal Revenue Manual describes a financial interest in a trust account where a US person has a present beneficial interest in more than half of the trust's assets, or receives more than half of its current income. A trust created by a will can fall within that. The FBAR rules also contain an exception where a US trust, trustee or agent reports the trust's accounts. Whether it applies depends on who the trustees are.
An inheritance can also move you across other lines at the same time. Form 8938 has much higher thresholds and goes with the tax return, and the IRS comparison of Form 8938 and the FBAR (opens the official IRS page in a new tab) is clear that one does not replace the other. A bequest above the IRS threshold for gifts from foreign persons (opens the official IRS page in a new tab) also brings Form 3520, which we cover in our post on inheriting from UK parents.
- Joint account with the parent: reportable before and after the death
- Estate account you can instruct: reportable while the estate is open
- Investments transferred to you in specie: reportable from the transfer
- Cash paid into your own account: counts in that account's highest balance
- Will trust where you have the main interest: review the trust rule
How do you report estate accounts in the year of the death
Report each account you had an interest in or authority over, with its highest value in that calendar year, on the FBAR due on 15 April, extended automatically to 15 October. Estate accounts are often opened and closed in the same year, and they still count. The $10,000 threshold is tested across all your accounts together, so a modest estate account added to your own savings can tip you over.
Convert each maximum to dollars with one consistent exchange rate source, as our post on the FBAR maximum value and exchange rate describes. Where a joint account was closed after the death, use the highest value it reached while you held the interest. The estate's own administration, with sales of investments and payments to beneficiaries, can make the highest value hard to read from statements, so ask the executors for a full set.
A worked example shows the shape. A US citizen teaching in Bristol is joint executor, with her brother, of their father's estate. She holds a joint current account with her father, can instruct the estate account once probate is granted, and receives her share in her own savings account. All three go on her FBAR for that year, and the estate account stays on the report until it is closed. Our foreign income and FBAR reporting service prepares the schedule and the report together.
What if you missed an inherited account in an earlier year
File the missing report as soon as you can and keep a note of why it was missed. The facts decide how the failure is treated, in particular whether it was non-wilful. Grief and the confusion of an estate are real reasons for an oversight, but they are not a safe harbour, so the explanation needs to be accurate and supported.
Our post on what to do after missing the FBAR extension covers the basic steps for a late report, and our post on late FBARs after the IRS withdrew its procedure deals with the wider position. If several years are affected, take advice before filing anything.
Keep the records. The Internal Revenue Manual points to a five year record keeping period for the information behind a report, and probate papers are the best evidence of when you gained authority. Keep the grant of probate, the bank's letters, the estate account statements and the executors' distribution schedule with your FBAR copies. Our estate and trust planning service and the broader rules in our guide to FBAR and FATCA for UK residents are the next step.
General information, not advice. The right answer depends on your circumstances and the tax year concerned.
