In recent times serious concerns have been raised within the profession about banks releasing sums of money to the relatives of deceased persons without checking whether the person claiming the money has any legal authority.
When somebody dies then a Grant of Probate (if they left a Will) or Letters of Administration (if they died without a Will) should be obtained to enable the appropriate person(s) to realise their assets, pay debts, tax and other expenses and distribute the remainder amongst those entitled.
Obtaining a Grant of Probate or Letters of Administration can be disproportionately time consuming and expensive if the estate is small so, for many years, banks and other financial institutions have allowed small accounts to be closed without the need for a Grant. There is no legal limit on the amount but most banks used to release up to £10,000 or £20,000. Usually they would need to see a certified copy of the Will or, if there was no Will, evidence that the person seeking to withdraw the money was the next of kin.
It seems that in recent times banks have allowed relatives to withdraw much larger sums without any proof of entitlement by simply producing a death certificate. The potential for fraud is huge.
Anybody who has ever tried to persuade a bank to take a sensible and pragmatic view over a small transaction on their personal account is likely to be shocked by this but it seems that rather than put in place the procedures to check that things are being done properly many banks are prepared simply to hope for the best and leave it for the family to sort it out between themselves.
There are concerns that this is getting out of hand and that unless something is done, an increase in litigation around Wills is likely to follow
There needs to be a consensus from banks and other financial providers on an agreed amount of which can be released without the grant of probate and upon what evidence is required in order to authorise this. That would show that the banks are taking this issue seriously.