Banks raise limits on releasing funds without probate

Some leading UK banks have recently announced that they are increasing the amount of funds they will release from accounts of deceased customers without evidence of Grant of Probate. On the face of it this should make things easier for bereaved family members dealing with their loved ones financial matters following their death, but this development may also raise some practical and safeguarding issues. Banks and Building Societies usually freeze accounts of their customers who have died until an executor of their estate has obtained and can produce the Grant of Probate - unless the amount of the account holding is below a certain limit, or for example  if a withdrawal is needed to pay funeral expenses. Obtaining a Grant of Probate can often be a lengthy process and at cost, depending on the complexity of the deceased’s estate.

However after a campaign period of some years from both consumer groups and the public, some UK banks are relaxing their rules and applying discretion in these circumstances. This move by the banks has been welcomed but at the same time it is important to note that it is without any consistency between them. Lloyds Bank for example is increasing its limit from £25,000 to £50,000, Royal Bank of Scotland from £15,000 to £25,000 and HSBC have removed their £20,000 limit to assess each request on a case by case basis instead. The Nationwide Building Society is also reviewing its own limit of £15,000.

So whilst these increases may help in some instances the bereaved family members (who often act as executors too), the ability to make withdrawals or even close an account varies greatly from one financial institution to another. It will therefore depend on which bank the deceased had their account with, and if they held accounts with several banks then access to funds will not be consistent as these policy limits are for the banks own purposes.

In addition, the knowledge and application by bank branch staff of these changes is also open to question. Some banks are making progress with having suitably trained staff to deal with such matters, often including a dedicated number to call to speak with someone sympathetically, but again this development is not across all UK banks and building societies, so again inconsistent.

However what about suitable safeguards for this changing situation? Whether or not Grant of Probate is being obtained, which is done when a Will if left, then a death certificate alone may now allow access to larger amounts of funds to anyone producing this document potentially without safeguards. It should normally be done by an executor, who has a legal responsibility to administer the estate of the deceased, but it could theoretically be done by other members of the family who have access to a certified copy of the death certificate. Imagine the possible consequences if there is family conflict, or where someone disagrees with the terms of the will which the bank may not be aware of. The idea of making access to funds after death easier has good intentions but problems could arise for “lay” executors e.g. members of the family.

So it is often best advised to use a professional probate services company, or a solicitor, either of which will be at a cost so it is a matter of choice.  This professional estate administration is particularly relevant if there is any property involved, any complexity in the estate and/or larger value estates e.g. with Inheritance Tax liability. In these circumstances a “lay” executor may be unable to handle the estate administration themselves, and also by using professional services it would ensure that obtaining the funds of the deceased from banks and building societies should be done with a suitable safeguard to all the family.

Ivan Willerton, Training and Business Development Manager, APS Legal & Associates Ltd

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