Withdrawing Cash from a Deceased’s Bank Account: Recent Changes and their Implications
Typically, when someone dies banks and building societies freeze their accounts until the person dealing with their estate has applied for an official document known as a Grant of Probate (“probate”).
An executor is named in the Will and is the person entitled to apply for probate. If the deceased died leaving no Will then the law states who is entitled to apply for probate, known as an administrator. The executor or administrator (also called personal representatives) takes responsibility for dealing with the estate.
In recent months many high street banks have increased how much they will release from the deceased’s account without probate being required. This amount can range from £15,000 to £50,000. Whoever decides to present themselves at the bank with the death certificate, whether they are the personal representative or not, will be able to close the account and receive the closing balance personally.
Need advice? Call 01752 203500 for a no obligation discussion
This might come as a relief to bereaved families who believe this makes a loved one’s estate easier to deal with, however, this certainly raises numerous issues, a few of which are detailed below:
- The person who presents themselves at the bank with the death certificate may be the personal representative but it is possible they are not the person entitled to benefit from the estate. What is to stop a dishonest personal representative simply ignoring the terms of the Will or the law of intestacy and keeping the balance for themselves?
- There have been many instances where the person who provides the death certificate to the bank is not the personal representative, nor are they entitled to receive a share in the estate. The personal representatives then have to rely on this individual to pay this sum to the estate so that it can be correctly distributed. This could result in matters becoming contentious if relations between the parties involved are not harmonious.
- When the personal representative files the inheritance tax account they might believe that because the bank has already released the funds without probate that they do not have to be included. The personal representatives are therefore not delivering a true account and potentially not paying the correct inheritance tax.
Where does the responsibility of the account being closed and paid out inaccurately lie? Is this amounting to fraud? Is tax revenue going to decrease as a result of inheritance tax accounts being incorrectly delivered? These are just a few examples and questions that personal representatives could find they have to answer following these seemingly helpful changes.
At GA Solicitors we offer a fixed fee service for the application of probate and are well placed to provide you with comprehensive advice on all aspects. Just one hour of good legal advice could save you thousands in legal fees to rectify the matter, not including the potential penalties and interest for an incorrectly filed inheritance tax account.
Our dedicated, qualified and understanding team will be pleased to meet with you. Many members of our Wills, Trusts and Probate team are also members of the Society of Trust and Estate Practitioners and Solicitors for the Elderly.