Banks releasing money to Executors without a Grant is open to abuse and fraud – Matthew Billingsley explains why?     

Banks releasing money to Executors without a Grant is open to abuse and fraud – Matthew Billingsley explains why?     

During the administration of a deceased’s estate, historically banks will release funds to executors (or solicitors acting on behalf of executors) without the need to see a Grant of Representation (i.e. a probate or letters of administration) dependent on the amount in the account. For example, with Nationwide if the account holds more than £30,000 then the bank will need to see a Grant of Representation, but if it is under this figure there is a framework in place to release funds without the necessity of this document.

Recently, Solicitors for the Elderly (SFE) has warned that some financial institutions are releasing as much as £125,000 from bank accounts to relatives of the deceased without needing to see a Grant of Representation. Practice varies across the financial institutions and banks and so there is no set rule stating how much an institution or bank will release without a Grant of Representation.

Due to there being no set rule, various issues arise. These include incorrect values of accounts being declared to HMRC for inheritance tax purposes, the deceased Will not being correctly followed or the fraudulent use of an out of date Will to get money released to the wrong beneficiary or executor. SFE are 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.

I would completely support the campaign by SFE as in my personal experience of managing administrations I see the lack of a cohesive approach on a daily basis. I do not think that this is the type of service a deceased client would expect and it also takes away the certainty of proper estate management increasing the chance of abuse. I would hope that the lobbying of the SFE would be successful, although due to Coronavirus, this may take much longer.

If you need help with administration of an estate please contact me, Matthew Billingsley, on 01258 444481. I am a Private Client Solicitor at Rutters dealing with Wills, Trusts and administration of estates.

Written June 2020