A recent decision made by a number of high street banks means that the amount that will be released from a deceased customer's account without a formal Grant of Representation has increased. However, this may not be the good news it seems at first sight.

The usual process when someone dies is that banks and building societies freeze their accounts until the person dealing with the estate - the Executor (where there is a Will) or the Administrator (where there is no Will) - has applied for the Grant of Probate or Grant of Letters of Administration. In the meantime, the only access allowed to accounts is to pay the funeral bill and any Inheritance Tax. This ensures that the right person deals with the estate, and the estate passes to the correct beneficiaries.

That said, the Small Estates Procedure has always allowed accounts holding less than a set amount of money to be closed without the need for a Grant. This amount is no more than £5,000 but separate to this, each bank and building society has set its own limit where they will close an account without the need for a Grant.

Whilst the limit set by banks etc. has historically been up to £15,000, many high street banks have now made a decision to raise their limit, with some increasing it as high as £50,000.

It seems the thinking behind the increase is to make life easier for those dealing with the estate. However, obtaining a Grant is a legal requirement which helps ensure that the right person deals with the estate, and the right people are paid the correct amount of money.

Is it right that banks are now able to bypass this procedure and release large sums of money?

The risk now is that potentially large sums could be released to those who are neither responsible for dealing with the deceased's estate, nor a beneficiary of the estate.


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