Tricky and in need of some advice...

badger09

Might be helpful if you were a bit clearer on who the various 'family members' are, & their relationship to each other. Helpful to me at least to understand context.

Who was in care home?
When was dementia diagnosed?
Who accessed his bank account? Over what period?
What evidence do you & bank have that this person withdrew £4k?

xylophone

The bank was unaware that the  account holder lacked capacity? If so, even though the signature on the mandate was not a close match to that in the bank's possession, it is not unreasonable for the bank to take the position that a signature can change over time.

An elderly friend wrote a beautiful italic hand but  when he reached his nineties, his sight  was deteriorating somewhat and his fine motor control was lessening- his signature certainly did change even though he was fully compos mentis.

 That said,  it seems that you have been advised by the deceased's doctor that he would not have had the  mental capacity to  agree to sign a third party mandate on the date this was raised on the account or the physical capacity to set pen to paper?

If so, the  relative who signed the mandate committed fraud and if he abstracted monies from the account and used it for his own purposes he committed theft.

You have reported this to the police - what action are they taking?

In the meantime,  as executors, it seems to me that you would have right to withhold the bequest to this relative until such time as the police have clarified the situation.

elsien

What is the policy of the bank in question with regards to how third party bank mandates are set up?
Do they require both parties to be present, do they require any form on ID, were these requirements met? As far as the bank is concerned, that would need to be your starting point.
Otherwise, realistically speaking, no-one is going to follow this up for you. There are people with dementia whose relatives have stolen their money while they are alive and the police have refused to act - and we're talking much larger sums of money here.
It may be that you do have to gather whatever evidence you have, then decide if it is sufficient to take forwards yourselves.
As an aside, numerous doctors saying may have said the person lacks capacity, but was that a blanket statement or was there a time and decision specific capacity assessment with regards to finances and if there was, where does that fit into your timeline? 

getmore4less

found this which may be of help as it covers the relevant legislation upto when it was written
http://www.mentalcapacitylawandpolicy.org.uk/wp-content/uploads/2017/10/Financial-Abuse-of-People-lacking-mental-capacity.pdf

badmemory

Please be careful with this.  People with dementia in care homes can be very expensive.  The minor one is shrinking clothes.  Care homes wash everything on hot to kill germs & protect their residents.  Then there are the hearing aids, glasses & teeth.  My mother cost herself £4k one year in those 3 alone.

TripleH

How was the money taken out?
Does this differ to behaviour prior to it starting?
If it was the care home, one would assume they have itemised bills?