In Need of Probate? Don’t Bank On It!

I know in these times of uncertainty and unease, businesses and financial institutions are doing their level best to increase their productivity and client satisfaction, but over the last few months I have seen more than one case of a client having experienced what I consider to be a disservice from their bank.

A few months ago, without any discussion with my profession, the banks and building societies decided to raise the threshold of the amount of money that could be accessed from a deceased person’s estate without the need for Probate.

Take, for example, one of my recent clients who had been widowed and made an appointment at the bank of her late husband to discuss his financial matters. She was told that the bank account in her husband’s name contained less than £15,000 so if she signed an indemnity form, she could simply take the money there and then without the need for Probate to legally grant her rights to the money.

This all seems pretty straightforward and I am sure at this stage if I tell you my concerns over a solicitor being excluded from these matters, your immediate assumption will be that of my own self-interest, but please hear me out.

Let’s suppose someone dies with four accounts in different banks each containing £10,000. A total amount of £40,000 is a great deal of money for one individual to access without any impartial monitoring or approval, but it is perfectly possible, especially when the banks now seem to be letting amounts below £20,000 leave the bank without Probate.

In the worst case scenario, these developments open up the potential to fraudulent claims. If an individual can simply walk into a bank, prove a connection to the deceased, sign a form and access money, how does the bank know that is the person to whom the money is intended? The individual does have to possess a Death Certificate, but these public records are hardly difficult to get hold of.

One example of this was when a late client of ours left all their money to their grandchild. As the child was under 18, his mother (the deceased’s daughter) registered the death, was given the certificate and went straight to a high street bank to withdraw the £8,000 that was intended for her child. Her reasoning was that ‘she deserved it’. We could have had her prosecuted for theft, but the teenage child understandably did not want to take his mother to court.

Remember, once an indemnity form has been signed, the bank has effectively washed their hands of the matter - it is no longer their problem or concern. This shortcut may seem like a more efficient use of time and can save money on the legal fees involved in getting Probate, but if the situation ends up in a mess as a result of actions such as those described above, the costs of sorting are far greater - a case of ‘a stitch in time, saves nine’.