Can a creditor refuse to pay out without probate?

Eviesmummy

My husbands late aunt passed away in December leaving very little, just enough to bury her, or so we thought. Whilst finalising her affairs we came across a private pension that she'd paid into through her work, and had been receiving payments from. The pension firm had been taken over by another company, and having had lost contact and been unable to trace her they suspended her payments for 6 years before she died. We contacted them and were told her estate was due just short of £2300.
Before finding this out we were advised that because her estate was so small probate wasn't required, and we had no problem closing her PO and bank accounts. We explained this to the pension firm and sent off all the paperwork they requested including my husbands ID, a copy of the death certificate, a copy of her will, which stated that any money was to be left to my husband, and a copy of the death certificate of her brother - her only executor who died before her.
On receipt of this they asked for the bank details of the estate to pay the funds into. We explained that we didn't have an estate account because the estate was so small, we barely had enough to recoup funeral costs. We asked our bank if they would open an account having shown them the letter from the pension people and they refused, partly because it was a one off payment and also because we hadn't anything in writing saying that my husband was acting as executor. Even though providing the relevant ID and death certificates to all other institutions had been enough to release the funds.The pension firm said they would consult their solicitors and get back to us.
Today I received a letter from the pension firm saying that they are
"not able to pay the pension arrears to a third party in the absence of an open estate. As a result of this we have now closed our records.
If (husband's name), as replacement executor, were to reopen the estate and apply for probate the arrears will still be payable and can be paid directly to him as the legal representative of the estate. Unfortunately the funds will not be payable until such time and must remain within the scheme if unclaimed."

Can they insist on going through probate for such a small sum?
If so how much will it cost to get probate granted?
We both work full time so trying to get time off to sort this sort of thing out is really difficult. Would it be worth paying a solicitor to do it? Or is it likely to cost more than the inheritance?

Sorry for such a long post!

Keep_pedalling

Unfortunately they can, but the fee for an estate under £5,000 is zero.

There is no requirement for the adinidtrator of an estate to have an executor account, and as you have found most banks are not interested in you opening one either.

Eviesmummy

Keep_pedalling wrote: »

Unfortunately they can, but the fee for an estate under £5,000 is zero.

Thanks, would that include the whole estate? Or just this outstanding amount? The total estate including this payment probably comes to just a few pounds over the £5000, literally less than £100 over. Everything else has been settled already, and funeral costs paid out of it.

Eviesmummy

I guess what I need to know, is the value of the estate calculated before or after deductions for funeral costs?
If it's before then we're just over the £5000 threshold, if it's after deductions we come well within it.

Keep_pedalling

Fees are based on the value of the estate after debts, which includes funeral expenses (Box F on form IHT 205)

Savvy_Sue

It doesn't sound as if this should be too time-consuming, and you can choose to swear the oath for probate at a solicitor's office rather than going to one of the probate registries. So once you're ready to submit the paperwork (or even before), ring round a few which are easy for your DH to get to during the working day and see what their charges would be for swearing the oath. (it might even be a fixed fee thing.)

Yorkshireman99

Fixed fee of £5 payable in cash.