Industry Shocked As Banks Continue To Release Large Estate Funds Without Grants
In recent weeks a number of probate professionals have taken to LinkedIn to share their disgust in the ways that some banks have been issuing vast amounts of a deceased’s estate without issuing the proper checks or requesting to see a Grant of Probate/Grant of Letters of Administration (Grant of Administration).
One person wrote:
“A QUARTER OF A MILLION POUNDS!
“That’s how much this bank are willing to pay out on the Estate without seeing a Grant of Probate. To say I am shocked is an understatement.
“Just complete a simple form and they will pay out the money. I can only begin to imagine the number of claims that will follow these limits increasing to such substantial amounts.
“Have any of my colleagues had problems with funds being released to the wrong person yet?”
Karl Taylor, a Probate Executive at Parker Rhodes Hickmotts Solicitors, took to LinkedIn to share his frustrations. He wrote:
“Just received a response from the Halifax asking to who they released the closing balance of a deceased’s account of approximately £20k. Although it was one of the Exors, the Halifax letter states:
“”I can confirm upon the closure of the accounts a copy of the Will was not produced.”
“Even putting aside the fact a copy Will is not sufficient, the Halifax have acted with a blatant disregard to their duty of care….in my view it’s negligence.
“The three Exors in this estate do not get on and the other two were unaware this account has been closed.
“Banks as a whole need to get a grip, stop cutting corners and hiding behind indemnities. This is one of three similar events I’ve recently dealt with (the tip of the iceberg).”
Professionals flocked to respond to Karl’s post vocalizing their issues and disdain at similar situations, and last week Olivia Parrot submitted her views in a guest piece to this publication.
I reached out to Karl to find out more information about this issue which is seemingly cropping up more and more.
What is the problem?
As we can see the problem is that the banks are releasing funds without conducting the correct checks. However, each financial institution is able to set its own threshold with regards to the amount of money it can release after seeing a Grant. These balances can vary from £5,000 to sums over £100,000.
Karl Taylor explains:
“In theory, if a deceased banked with Halifax, Lloyds and Santander, each with £100,000, someone could visit those banks in an afternoon and have £300,000 by the end of the day.
“Even though release of funds with or without seeing a Grant has always been at the banks discretion, if a Grant is not requested, the banks should still make proper checks to ensure they are passing the funds to the correct person. When there is a Will that must be the Executor(s), even if they are not next of kin who are not Executors”
“The banks are not even making the most basic checks. Even when the banks ask to see a copy of a Will that is not really sufficient. Strictly speaking neither is sight of an original Will. An application for a Grant of Probate is a legal process through the Probate Court by the Executors to confirm the Will is the last valid Will of the deceased. The Grant gives more certainty than either a copy of the Will or the original.
“Another problem is with intestacies as next of kin inherit under statute. A child may not be the only beneficiary. In some cases, the widow is not the sole beneficiary.
“My view is banks do not understand that a copy Will, or someone saying they are the next of kin, is sufficient proof they are paying the funds to the right people. The banks say they need to show compassion by making the process as easy as possible, but this should not be at the expense of due diligence.
“The worry is that I increasingly hear of banks just releasing money to whoever shows them the death certificate. They will request the person receiving the funds signs an indemnity, but my view is that would be ineffective if they had not made sufficient checks.
“The banks attitude when challenged is frankly disgraceful. They either refuse to engage or just say they acted correctly.”
Michael Culver, Chair of the Board at Solicitors for the Elderly, said:
“It is extremely alarming to hear that some banks have been closing a deceased person’s account and releasing funds without a will being produced.
“The purpose of a will is to set out who you leave your assets to. If banks are bypassing this, and releasing funds to anyone who produces a death certificate and claims to be entitled, it can undermine the entire process of creating a will, and significantly increase incidents of funds being released to the wrong people.
“Not only would this be ignoring the wishes of people’s loved ones, but it can cause a number of serious practical effects.
“We’re likely to see an increase in litigation, as a result of money falling into the hands of people who aren’t entitled to it. Recovery of the money could take some considerable time and expense, and there’s a danger of smaller amounts never being recovered. This simply isn’t acceptable, and has the potential to create extreme distress at a time when people are already vulnerable and bereaved.
“There is no good reason for banks to rush into releasing funds, particularly given the serious problems that can be caused. If there is no will, banks should wait until proper legal checks have taken place, to ensure the person they’re releasing the funds to is legally entitled to them, or a Grant of Probate is produced.
“If this practice continues, it may come to the unfortunate point where solicitors advise clients not to use a certain bank because they can’t guarantee that their funds will be safe.
“At Solicitors for the Elderly, we’re encouraging lawyers who have experienced this issue to get in contact with us at [email protected]. We can take these concerns to banks directly, and work together to help safeguard against the significant risk posed.”
Have you had any similar experiences of this?