Beneficiary without a bank account

(Nathan Bowles) #1

A beneficiary has been left a legacy of £2,000. He says he does not have, and has never had, a bank account - only a Post Office account into which only his State Pension can be paid. He has asked if the legacy can be paid to a third party or in cash. Our policy has always to resist such requests, partly because beneficiaries sometimes openly request this on the ground that it will otherwise affect their benefits! I have no knowledge of whether this beneficiary receives means-tested benefits. What do others do in such circumstances?

Nathan Bowles
Williamson & Barnes

(John Cartlidge) #2

Had this before. Caution understood but the basis of a means tested claim is between the beneficiary and DWP plus given the modest sum we would accept a letter prepped by us for the beneficiary to sign directing where the payment is to go; ideally to another beneficiary already ID’d and the letter contain statements

No bank account to receive a payment.
Payment to the account specified is settlement of the claim / entitlement.
(Name) the account holder is my (brother/sister/friend etc)
I will make my own private arrangements to recover the sum from (name)

John Cartlidge
Campion Solicitors

(Tim Gibbons) #3

I don’t see any harm in paying the legacy in cash if the recipient requests it and is prepared to attend in person to collect and give a receipt. I’d be reluctant, for prudential reasons, to pay it to a third party unless I knew both well- which is not, I assume, the case here. If you have reason to suspect that the beneficiary is asking for this in order avoid loss of benefits (unlikely with a legacy of £2000, but possible) your dilemma is greater. Personally, I think the entitlement to the legacy overrides your scruples about how the beneficiary may use it.

A contrary view is expressed in the latest philippic from the SRA about personal injury practice, where they say:

You should not make payments where there is any concern that the client may be avoiding liabilities eg bank overdraft, benefits claw back. Cheques made payable to the client must be given or sent to the client at their address.

It is surely a matter for the client alone whether he pays a legacy into an overdrawn account or chooses some other more gratifying way of receiving his damages, or for that matter, a legacy. Once again, I think the SRA are overreaching themselves.

Tim Gibbons

(John Cartlidge) #4

Another experience we had was beneficiary insisted on collecting cheque (after his request for cash had been refused). We had ID’d in the usual way, and he collected cheque. Less than an hour later we had a call from a cheque cashing ‘shop’ to verify the situation. We informally learned later the spouse was not informed of the inheritance…

Perhaps stick to guns and thereby force the beneficiary to do similar.

John Cartlidge
Campion Solicitors

(Kaskar) #5

Why can’t the legacy be paid in to the post office account?
Ruksana Kaskar
Hamilton Davies LLP

(Nathan Bowles) #6

It is a Post Office card account. It is just a means of enabling people to collect their benefits from the Post Office so the terms permit only credits for state pension, other benefits or tax credits.
Nathan Bowles
Williamson & Barnes

(Kaskar) #7

May be he can open an account with a bank solely for this purpose. This way the bank will hopefully do their due diligence and you may pay it in to that account

Ruksana Kaskar
Hamilton Davies LLP

(smh) #8

We have ‘paid’ a legacy to a chap by postal orders as he kept failing to cash cheques. We hand delivered the postal orders. However, you may find the cost of postal orders prohibitive on a legacy of £2000.

Samir Hussain