What happens to the bank accounts?
Not so long ago banks would insist on probate or letters of administration being obtained before they released the funds of a deceased customer. Exceptions were made for paying funeral accounts and inheritance tax. If the amount in the account was small they would sometimes release money without waiting for probate. That has now changed and t he banks release substantial funds without probate. I understand that the relevant amounts are now £50,000 for Barclays and Lloyds, HSBC does not have any limit, NatWest and RBS is £25,000 and Nationwide is £30,000. This is often convenient and good news for bereaved families but we have come across a number of cases where banks have released money to persons not entitled under the deceased’s will or intestacy. The banks must have known this was going to be a possibility when they raised these limits and no doubt made a cost benefit analysis that the mistakes would cost them but not as much as the extra staffing needed to check probates and keep the accounts running in the meantime.
It seems to me that this is a possible problem for banks in the future and no doubt the claims industry are investigating closely!
One of the reasons why pressure built up on banks to make this change was the delay families often encountered in obtaining probate. But it does not need to take a long time. It is possible to obtain probate quickly and not so long ago we managed to obtain a grant of probate before the funeral had taken place. Admittedly the family had experienced delays in getting a funeral date because of problems with the town’s crematorium but the fact remains that probate need not take an excessive amount of time.