There are two complaints. The first is that the requirements of banks when closing an account vary hugely with many and different forms and client identification requirements. Currently, there is no approved process for closing accounts when someone dies – some companies demand a death certificate before closing an account, others seek different proof and paperwork. It can take weeks, or months, of repeated calls, to close just one account. And it isn’t just banks. On average individuals have up to 20 utility, mobile, broadband, TV subscription, and other household service accounts which need to be closed.
The second problem is that some banks have been seen to be very relaxed about closing accounts and handing large cheques to people who may or may not be entitled to them without having carried out appropriate checks or requesting to see a Grant of Probate or Grant of Letters of Administration.
Some banks are prepared to release monies on production of a Will, which they do not check is the latest one or that they have the authority of all executors. In not all cases do named executors happily act together. We have also heard of banks continuing to accept the authority of a Lasting Power of Attorney for a deceased saver, even though that authority ended when the donor of the power died.
Some banks are prepared to pay out as much as £250,000 without what we would argue is proper authority. Each financial institution is able to set its own threshold with regards to the amount of money it can release without seeing a Grant. It is worse where there is no will as then next of kin inherit as determined by statute. A child may not be the only beneficiary of an estate and in some cases the widow is not the sole beneficiary.
It appears that banks do not understand that a Will, or someone saying they are the next of kin is not enough for them to be sure they are paying the funds to the right people. Even when the banks ask to see an original Will they cannot be sure that the will they are looking at is the last one executed by the deceased. 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 a purported original.
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. They will request the person receiving the funds signs an indemnity, but that is little comfort to the legal beneficiaries if the person who has incorrectly received the funds has spent them.
David Roper says “Clients give much thought to who they would like to leave their estate to. If banks are ignoring their wishes and releasing funds to anyone who produces a death certificate and claims to be entitled, it undermines the purpose behind making a Will and significantly increases the risks of money being released to the wrong people.”
The problems this can cause are many and varied. It can help “hide” assets from other beneficiaries, creditors or HM Revenue & Customs and in extreme cases it could give the impression that the estate is insolvent or there is not enough money to pay cash legacies and so on.
Mother and daughter Julie and Vicky Wilson, from Easington in County Durham, are trying to establish standard procedures which will happily address both problems. They have started the Bereavement Standard Petition at change.org/bereavementstandard.
The Bereavement Standard would set a time limit for account closures, standardise paperwork and documents required, and ensure service providers have dedicated bereavement channels with properly trained staff, available to customers.
This would massively help bereaved families at a difficult time and, for us lawyers dealing with the administration of estates, it would mean that we could provide accurate advice and time estimates regarding the closure if accounts, it would mean that we could have standardised paperwork signed in advance and it would protect the bank accounts of those who have died.