Bank emptying deceased account for single beneficiary

dunroving

I was in Barclays recently with a relative who is one of two beneficiaries (daughter and son) of a recently-deceased relative who died intestate 11 days ago.

The deceased's estate is not large - approximately £7,000 in the bank accounts and that is about it. She has outstanding debt from a credit arrangement that she has been paying a monthly amount into for about 10 years (she was defrauded by a man friend who got her to sign for various loans; he has of course been long gone). She has no other debts other than perhaps some outstanding utilities bills.

The banking assistant filled in a form to pay the deceased's account balance into the daughter's bank account. This will be after the funeral is paid for by the bank and the bank takes a £500 final payment for a Barclaycard loan the deceased took out (none of us knew she had taken out this loan, or what for).

The form included a declaration that the signee (daughter) had discussed the situation with other beneficiaries (in this case her brother) and had their permission to receive the deceased's funds. This wasn't true because she only saw the form 5 minutes earlier.

I found the whole situation a bit disturbing for a number of reasons. I have some questions below:

The bank advisor said the deceased's debts die with her - but Barclays is taking £500 from her account for a debt (final loan installment) to them ... is this right?

Can a bank simply disburse a deceased person's funds like this without an administrator for the estate?

Lastly, I pointed out to the daughter that she was being asked to sign a declaration that wasn't true (she hadn't got the approval of her brother to receive the funds). On second thoughts, she said she wanted to hold off signing the form until she had talked with her brother. The bank advisor said, "So, do you want me to tear up the form, then?" (holds the form up as if she were going to tear it up). I found this bizarre, but even more bizarre was the fact the bank was going to pay out to only one of two beneficiaries, essentially because they had the one beneficiary present.

Is this normal practice? I know we are only talking about a few thousand, but this is the sort of situation that can cause rifts in families.

~Beanie~

dunroving wrote: »

The bank advisor said the deceased's debts die with her - but Barclays is taking £500 from her account for a debt (final loan installment) to them ... is this right?

No, its not correct. If there is money in the estate to pay debts (which there is, £7,000) then that is used. It is only if there is no money n the estate that the debts are usually written off.

SevenOfNine

Presumably the daughter had the death cert. Barclays asked her to sign a disclaimer & if she did that (& had death cert) then yes, they'd release the funds of £7k.

Each bank has their own limit, over which they would freeze the a/c but would NOT release the funds (though they'd pay the funeral invoice), they'd insist on probate or letters of administration be obtained first.

That limit 'usually' hovers around the £20k region.

Nationwide wouldn't even cough up a couple of hundred pounds without LoA, Santander paid out £19k on strength of death cert (& disclaimer signed), Barclays froze a/c with £27k with death cert but wanted LoA before paying out.

Malthusian

dunroving wrote: »

The bank advisor said the deceased's debts die with her - but Barclays is taking £500 from her account for a debt (final loan installment) to them ... is this right?

Yes. Obviously debts aren't extinguished on death even if you had money to pay them, or everyone would max out their credit cards and mortgage themselves to the hilt on their deathbed. "Debts dying with you" means they don't automatically pass on to your spouse or children as they might have in less enlightened times. (Not without their consent.)

Lastly, I pointed out to the daughter that she was being asked to sign a declaration that wasn't true (she hadn't got the approval of her brother to receive the funds). On second thoughts, she said she wanted to hold off signing the form until she had talked with her brother. The bank advisor said, "So, do you want me to tear up the form, then?" (holds the form up as if she were going to tear it up). I found this bizarre, but even more bizarre was the fact the bank was going to pay out to only one of two beneficiaries, essentially because they had the one beneficiary present.

It is certainly normal for banks to have less stringent requirements about paying out small amounts of money in an estate. Others may know more about how exactly it works and how the requirements vary from bank to bank, I don't have direct experience of it.

Clearly, this process should not be used if the estate is insolvent (you didn't say how much the debts were). In which case the daughter should walk away and let the creditors deal with it.

Not sure why you think it would be bizarre for the assistant to tear up the form. If it's not going to be used, and indeed should not be used, then it's good practice not to leave it around to be signed or processed by accident.

dunroving

~Beanie~ wrote: »

No, its not correct. If there is money in the estate to pay debts (which there is, £7,000) then that is used. It is only if there is no money n the estate that the debts are usually written off.

- thank you, that's what I thought, but when you have a bank advisor sitting in front of you who says she deals with two of these a week and has been working at the bank for 40 years, you assume they must know better. Wrong. She also said, "Well, there is no estate", to which I responded, "Well,surely this is the estate" (her bank balance). She didn't seem to have an answer for that.

SevenOfNine wrote: »

Presumably the daughter had the death cert. Barclays asked her to sign a disclaimer & if she did that (& had death cert) then yes, they'd release the funds of £7k.

Each bank has their own limit, over which they would freeze the a/c but would NOT release the funds (though they'd pay the funeral invoice), they'd insist on probate or letters of administration be obtained first.

That limit 'usually' hovers around the £20k region.

Nationwide wouldn't even cough up a couple of hundred pounds without LoA, Santander paid out £19k on strength of death cert (& disclaimer signed), Barclays froze a/c with £27k with death cert but wanted LoA before paying out.

Thank you. Yes, we had a death certificate and the form she was being asked to sign had all the wording of a disclaimer (including words to the effect that if Barclays ended up being liable for x, y and z, they'd come after her), and yes, the advisor said that £20k was the limit. She asked us if probate was needed and of course, we wanted to say, "We don't know, you're supposed to be the expert!"

It is reassuring that the funeral gets first rights. However, it is concerning that the money might get disbursed and then my relative (the deceased's daughter) might get chased for the debts by the credit agency (it's some sort of charity - I think maybe StepChange?)

Keep_pedalling

My experience with Barclays was good when I was dealing with my stepfather's accounts and they do have a very good bereavement department.

They will have asked you to sign an entenmity form, which covers their backside if the person claiming the money does not distribute it according to the will / intestacy rules. Barclays will do this if the deceased had under £30,000 in their accounts.

Whatever bank you are dealing with always make an appointment, and hopefully the branch will put someone who knows what they are doing on the case.

How much is outstanding on the credit arrangement?

Yorkshireman99

dunroving wrote: »

- thank you, that's what I thought, but when you have a bank advisor sitting in front of you who says she deals with two of these a week and has been working at the bank for 40 years, you assume they must know better. Wrong. She also said, "Well, there is no estate", to which I responded, "Well,surely this is the estate" (her bank balance). She didn't seem to have an answer for that.



Thank you. Yes, we had a death certificate and the form she was being asked to sign had all the wording of a disclaimer (including words to the effect that if Barclays ended up being liable for x, y and z, they'd come after her), and yes, the advisor said that £20k was the limit. She asked us if probate was needed and of course, we wanted to say, "We don't know, you're supposed to be the expert!"

It is reassuring that the funeral gets first rights. However, it is concerning that the money might get disbursed and then my relative (the deceased's daughter) might get chased for the debts by the credit agency (it's some sort of charity - I think maybe StepChange?)

The advisor was talking rubbish! Debts don't die with the death of the person. Banks may have a right to offset a debt aginst another account hat is in credit. It is quite normal for banks to hand over funds with an indemnity of this kind in cas e wrong person asks for the money.

FreeBear

When I had to deal with probate, the bank (Lloyds) wouldn't discuss anything unless both the executors were present - The indemnity forms required both our signatures before any funds were released.

As for the debts - As others have said, they do not die, but equally, they should not be settled unless the (alleged) creditor can proof it is genuine and they have a legitimate claim to the money. So if they can not supply a valid CCA or the debt is made up entirely of penalty charges, tell 'em to walk.

p00hsticks

dunroving wrote: »

It is reassuring that the funeral gets first rights. However, it is concerning that the money might get disbursed and then my relative (the deceased's daughter) might get chased for the debts by the credit agency (it's some sort of charity - I think maybe StepChange?)

You need to make clear to your relative that even though the money is now in her bank account she cannot consider it as hers to spend or pass any on to her brother until 'someone' (her ?) ensures that any debts of the estate are paid or set aside.

If the amount of money is not enough to pay all the outstnading debts then what there is needs to be apportioned fairly amoungs the creditors.

getmore4less

fairly sure I remember someone recently saying the DM company just walked away leaving those left to sort it out wothout even telling them who the creditors were and how much was owed.

Check with the DM company before doing anything.

Malthusian

She asked us if probate was needed and of course, we wanted to say, "We don't know, you're supposed to be the expert!"

You were talking to a checkout assistant. Experts cost money and don't spend their days stamping cheques.