POA misuse

MrSlipper

Six months later, the money has not been returned to the estate. There is an ongoing complaint case, with the bank, since September, though the last text from them says that they should have a result by 5th March. Apparently the bank  requested return of the funds from the receiving bank, back in December. They say it's been re-requested (if that's a word) twice (in January and February) and a response is now due by 26th March. There is also a Police investigation, so I'm not sure if that in itself is causing a delay. 

naedanger

Did the bank send you a copy of their complaint procedure? If so I would have thought it would have stated you could escalate the matter to the Financial Ombudsman Service after a certain period (8 weeks, perhaps a bit longer due to Covid) if the matter was not resolved to your satisfaction. 

My suggestion is you take your complaint to FOS now.

The way I see it is, that the bank paid out the money without the proper joint authority and as a direct result that money was lost to your mother and her estate. The bank should therefore compensate your mother's estate for the loss they negligently failed to prevent. 

One thought: Were you aware that the other attorney was operating the account on her own? If you were then the bank may argue that you were at least partly liable.

MrSlipper

I've had nothing in writing from the bank. The texts I have received give the FOS option, but I know that the FOS are working to longer timescales than usual. I honestly thought the bank would have resolved it by now. I'm awaiting a letter from the bank, to confirm that they haven't resolved the matter within the time stated, for the FOS complaint. I'm mystified as to how, having requested the money in December, they still haven't had it back.  Is it the bank, or the account holder who's stalling? That's a rhetorical question, BTW. Prior to my Mothers death, there were no questionable transactions, everything happened after her death, when the LPA was no longer valid. 

naedanger

MrSlipper said:

I've had nothing in writing from the bank. The texts I have received give the FOS option, but I know that the FOS are working to longer timescales than usual. I honestly thought the bank would have resolved it by now. I'm awaiting a letter from the bank, to confirm that they haven't resolved the matter within the time stated, for the FOS complaint. I'm mystified as to how, having requested the money in December, they still haven't had it back.  Is it the bank, or the account holder who's stalling? That's a rhetorical question, BTW. Prior to my Mothers death, there were no questionable transactions, everything happened after her death, when the LPA was no longer valid. 

I would complain to FOS now. I would include in the complaint the fact that you have not yet even received a copy of the bank's complaint procedure. I am sure FOS will be slow, especially given the current situation, however it is better to start the clock running. If meantime the bank resolve the matter to your satisfaction you can then withdraw the FOS complaint.

My understanding from what you have said is that the bank did not know your mother had died when your sister withdrew the money. So I would not in any way blame them for still acting on the understanding your mother was still alive. Their blunder was paying out the money without the required authority as they did not get both attorneys' agreement. Had they done so the fraud would have been prevented. Their negligent failure means your mother's estate has been defrauded and you, as executor, require them to make good the estate's loss. They can then pursue the rogue sister for their loss.

That said I can see why they will be reluctant to pay out, not just because it is a lot of money, but because they will be anxious to ensure the rogue sister does not benefit from it. If the rogue sister is actually a beneficary under the estate then you might consider agreeing to the bank only refunding the loss less your rogue sister's share of the inheritance, if they offer this as a possible solution. You would of course deduct the remaining estate's loss from her inheritance.

Also is your rogue sister an executor? If so then I can see that causing a complication. 

PS I am not mystified that the receiving bank has not returned the money unless you believe the rogue sister has agreed to it being returned from her account.

My guess is a police investigation might, in some circumstances, lead to a delay in a resolution but I would expect if that was the case that you would be told.

TBagpuss

Agree with all the above.

Do you have a rough idea of the over all value of your Mum's estate? And how much the 'rogue sister' would be entitled to under the terms of the will? 
Does the sister have any assets? 

I think you will need to take legal advice but it my be that you could look at pursuing a civil claim, on behalf of the estate , to secure the money, especially if sister has a house or any assets to cover any order made against her. 

MrSlipper

Many thanks for the replies. I am still waiting for the letter from the bank confirming that they haven't resolved the complaint. This was requested a week ago so I may call them to chase it tomorrow. 
Yes, the bank's fault was in failing to stop any withdrawals (7 in total) which didn't have both Attorneys' agreement, whether these were done online or via the banking app. 
I am sole executor. She is a trustee, together with another sister. 
I have kept detailed accounts of the estate. Her inheritance would be just over half the amount she has taken, but she took £100k, expecting/demanding  a further £50k,(for Mum's care)  plus her inheritance. 
She jointly owns a house with her husband. 

naedanger

I think the fact that only you are an executor removes one possible complication. Had the rogue sister also been an executor I could see the bank might argue they should not have to return the money to her part control.

I think the next step is for you to draft the letter to FOS. (I am not sure why you are accepting the bank's failure to recoup the money as any sort of reason for delaying its return to you as executor. I would be arguing that they need to return the money irrespective of whether or not they can reclaim it. They should never have authorised the payment under the clear requiremens of the POA document.)

That said the fact the rogue sister was connected with the account and is a beneficiary under your late mother's estate may complicate matters, but I don't think it gets the bank completely off the hook. In any event unless or until they make such an argument I would be proceeding to hold the bank completely liable as they were clearly negligent when they paid the money without your required authority.

Robert_McGeddon

MrSlipper, you have said that (a) you are sole executor, (b) your rogue sister misappropriated £100K from the estate after death, (c) this £100K represents approximately 50% of what may have been due to her legally and (d) there are 6 siblings involved overall.

As Elsien hinted earlier, it appears you are sole executor. You have full control over the estate so you may be able to short-circuit the removal of the money. Simply report the estate at its gross value (including any ‘disappeared’ funds as a debtor due to the estate) for IHT purposes, settle the IHT and distribute the net estate to the beneficiaries as the Will dictates. The appropriated funds would be deducted from your rogue sister’s inheritance prior to payment.  This has the same overall result as if the sister repaid the money to the bank, the bank paid the money to you and you, as executor, paid your rogue sister her full inheritance. Just quicker and less agro.

If your rogue sister’s legitimate share was c£200K and she’s one of 6 siblings then the estate may well be into IHT territory. The estate could probably afford legal advice and given your sister has taken advice then IMO the estate probably should too, particularly as it appears a trust is involved and she’s a trustee. Limited legal intervention now might head off bigger problems later.  Have you sought formal legal advice yet?  The cost of the estate’s advice comes out of the estate overall, your sister will have to pay for hers personally. Perhaps make this clear to her.

A couple of more points:

1 You said your sister took “rent” whilst staying with your Mum. Was this reasonable and sufficient? Or is perhaps some further recognition appropriate now?

2 You say your other siblings are on-side with you. Excellent. Perhaps you could document this between you. Whilst the responsibilities of being executor are yours alone the fact that all the siblings apart from the rogue sister are in agreement is a strength should this end up as a legal action.

Finally, I think protracted litigation would be expensive (for your sister more than the other siblings) and divisive. If it can be avoided then it should be.  That said, if the situation isn’t resolved then 5 siblings lose out – a bigger downside than a single sister.

HTH,

getmore4less

I think what is being said is they took £100k  their share of the estate is 1/2 of that £50k

adviceforeveryone

I agree with getmore4less I thought she only had 50% of what she had taken