Practitioners warn banks against releasing large sums before grant of probate
Solicitors for the Elderly (SFE) has warned that some financial institutions are releasing as much as £125,000 from estates to a deceased’s relatives without requiring a grant of probate.
SFE’s Chairman Michael Culver TEP says that, in recent years, the cash limit has risen steadily from the traditional £10,000, under pressure from bereaved families dealing with the delays and expense of probate. In 2017, UK Finance (formerly the British Bankers Association) and the Building Societies Association agreed a code of conduct on the treatment of deceased clients’ estates, including the release of necessary payments before probate. However, no definite standard limit was established, and different institutions still operate different practices.
The Building Societies Association said previously that its members usually set a £15,000 limit for paying out funds without probate, although it admitted that the maximum amount ranges between £5,000 and £30,000, and depends on the merits of each case.
However, banks and building societies have reviewed their bereavement processes since the coronavirus lockdown began, because the usual approach of a face-to-face discussion with a bereaved relative is not easily done at present. Some have raised the probate limits in certain circumstances, said the Building Societies Association.
SFE says this opens the system to abuse by people falsely claiming to be an executor or administrator, perhaps by producing an out-of-date will that has since been superseded. SFE is now lobbying banks and building societies to create a universal policy on limits for releasing bank accounts after death, to prevent abuse, fraud and inheritance tax disputes that might arise if cash is wrongly distributed due to the absence of grant of probate. ‘If there isn’t transparency around the value of money released then the declaration of estate size to HMRC could be inaccurate,’ Culver commented.
Lindsey Sharples is a solicitor in the private client team at Barker Gotelee, Solicitors in Ipswich.
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