Question about bank accounts after death.

lawrie28

Question about bank accounts after death. I know this isn't strictly the subject of this section of the forum, but seemed the best fit.

Can anyone tell me about bank accounts when some dies.
If someone is a signatory on someone elses bank account, can they remove funds from the account after the account holder has died?

I know they shouldn't, but if they did, what would happen?

Does it matter if the bank are aware the person has died, even though the signatory is aware?

Would it matter if that person was intending to execute the estate?

Thanks in advance

rb10

What do you mean by 'a signatory on someone else's bank account'...?

... it was a joint account?

... they had Power of Attorney?

Any reply will depend on this.

EarthBoy

I should think that any permission for authorised signatories expires on the customer's death and all authority lies with the executor(s). It has to be that way, otherwise the authorised signatory could spend money contrary to the wishes of the deceased as expressed in their will.

Banks will normally freeze accounts when the customer dies until probate is granted. If the authorised signatory fails to tell the bank and continues to spend the money they are committing an offence and could end up in prison. Of course, if the authorised signatory is also the executor then this alters things, but banks will still need to see proof of death and probate.

On the other hand, if it's a joint account it nearly always becomes the sole property of the surviving joint account holder to do what they like with.

lawrie28

rb10 wrote: »

What do you mean by 'a signatory on someone else's bank account'...?

... it was a joint account?

... they had Power of Attorney?

Any reply will depend on this.

It was a personal bank account, with a second person as a signatory on the account. There was no power of attorney.

lawrie28

EarthBoy wrote: »

I should think that any permission for authorised signatories expires on the customer's death and all authority lies with the executor(s). It has to be that way, otherwise the authorised signatory could spend money contrary to the wishes of the deceased as expressed in their will.

Banks will normally freeze accounts when the customer dies until probate is granted. If the authorised signatory fails to tell the bank and continues to spend the money they are committing an offence and could end up in prison. Of course, if the authorised signatory is also the executor then this alters things, but banks will still need to see proof of death and probate.

On the other hand, if it's a joint account it nearly always becomes the sole property of the surviving joint account holder to do what they like with.

Thanks for this.

At the time of funds being removed, the signatory had not formally notified the bank (taken death certificate in) though may have informally. They removed funds electronically as they had online access as arranged by the bank.
The person was intending to be the executor of the estate (as agreed by family), but had not got the neccesary paperwork at the time and the estate is now being handled by a solicitor.

lawrie28

The Bank did freeze the account, but not until paperwork was taken in, which was after the funds were removed (a few days after death, multiple transactions).

Any idea if this is this something that the solicitor will investigate and pursue as the executor and as part of the legal obligation of being the executor, through to the reporting to the police? Or would it have to be other beneficiaries/bank that may need to do this?

Thanks everyone.

zerog

rb10 wrote: »

What do you mean by 'a signatory on someone else's bank account'...?

... it was a joint account?

... they had Power of Attorney?

Any reply will depend on this.

This is OT, but I'm not sure that a "signatory" in the strict sense is possible in the UK.

I am a signatory on my parents' accounts in some other countries and this basically means I can do what I like, including taking all their money and closing the account without them even being notified. I am also authorised to use their cards and PINs and internet banking.

This is completely different from a power of attorney, which is general and would not apply to a specific bank.

In fact, it sometimes makes sense for wealthy couples (who get on) to have sole accounts and be signatories on each other's accounts rather than having a joint account.

zerog

lawrie28 wrote: »

The Bank did freeze the account, but not until paperwork was taken in, which was after the funds were removed (a few days after death, multiple transactions).

Any idea if this is this something that the solicitor will investigate and pursue as the executor and as part of the legal obligation of being the executor, through to the reporting to the police? Or would it have to be other beneficiaries/bank that may need to do this?

Thanks everyone.

I think there should not be any problem if they are completely open about what they did and can account for the funds they removed. Now that a solicitor is handling the estate, they should send the funds to the solicitor. Why hasn't this person asked the solicitor what he should do?

lawrie28

zerog wrote: »

I think there should not be any problem if they are completely open about what they did and can account for the funds they removed. Now that a solicitor is handling the estate, they should send the funds to the solicitor. Why hasn't this person asked the solicitor what he should do?

At this stage the solicitor handling the estate is unable to comment and advise us, as they are acting for all the beneficiaries including this person. Hence seeking advice on here before seeking legal advice.

The funds are in the thousands and have been transferred to there personal account rather than to pay a bill/bills/debt.

We are just trying to establish if this is some kind of crime, theft or fraud, but there doesn't seem to be much of an answer as most websites assume accounts would be frozen immediately which is not the case.

webtalk

If I was that person i would belookingover my shoulder. To me it is quite simple:

• person A dies
• the money in the account therefore belongs to the beneficiariem them on
• person B knows the person has died
• person B draws money after person A has died KNOWING person A has died (repeating myself a bit)
• person B is effectively taking money out of the estate -which means person B is taking (stealing?) money from the estate and, ultimately, the beneficiaties without permission

If I were one of the beneficiaries I would expect the executor to look into the matter as the executor is representing the estate and NOT the beneficiaries as far as I am concerned.

I would therefore expect the executor to be looking into the matter of missing funds.

To me it all rests on 'intention'. Taking out money after someone has died implies dodgy intentions though there may be a reasonable explanation.

I would guess that being a signatory on someone's account dies when the person dies if the signatoey knows the person is dead, even if a bank does not.

I don't know if the signatory would havehad a legal obligation to inform the bank. They certainle did not seem to feel a moral/ethical one.

If the bank knew informally, did they give him a 'nod'to withdraw the money, or were they legally obliged to wait for paperwork? Or should they have closed the account on being told informally? I don' know.

(Ignore the caps my mistake)

I would ask a bank for their view.

BTW, I am not a legal person, just my thoughts on the matter.

zzzLazyDaisy

I have never heard of someone being a 'signatory' on another's personal account (apart from under a Power of attorney, which you have confirmed was not the case).

However it does sometimes happen that an account is put into joint names with another person, to allow them access to the account. The problem is that the law relating to joint accounts is that on the death of the first joint account holder, the funds automatically pass to the surviving joint account holder, and do not fall into the estate to be distributed under the will. If that is what happened, the money would in law belong to the second joint account holder and they would be legally entitled to remove the money following the death of the first joint account holder.

So your first step needs to be to establish what exactly the situation was regarding this account. If, for example, you have access to cheque book or bank statements it should be fairly obvious whether the account was held in joint names.

It might help if you are able to explain how the second person came to be named on the deceased's bank account.

For example if the second account holder was a second wife or live-in partner, this might be viewed differently from a situation where the second account holder was a cleaner who came in occasionally to help the deceased, who was suffering from dementia at the time and did not understand what he was doing when the second person was added to the bank account.