Release of Bank Funds

Trusts Discussion
1

My client has asked for advice regarding signing an indemnity in order to obtain release of bank funds without a grant. The particular indemnity requires confirmation that the ‘Claimant’ is authorised to administer the estate. On the one hand, I presume the purpose of the indemnity is to allow personal representatives to obtain release of the funds without a grant. However, at the same time, I can’t see how a would be administrator could sign such a confirmation as they are not authorised to administer the estate before receiving a grant. Any opinions?

2

I recall a similar question was raised earlier this year, to which I recall there were a number of responses, but cannot currently locate the “string”

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

3

Whilst I agree that someone in the position referred to should not enter into the indemnity, I believe that such “nicety” is frequently overlooked both by the applicant and the financial institution involved.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

4

Thanks, Paul. That’s what I thought the answer might be.

5

My office bank (Lloyds and by derivation Halifax) will unasked automatically close an account and send me the balance as soon as I send them a death certificate and state that I am acting in the administration.
It is useful to the extent it enables small bills funeral account etc to be paid and as long as they are valid debts there seems little risk in doing so even if it turns out the will is not the last one.
My concern is that several banks seem to allow the first person to walk in with a death certificate to do the same even if they are not the executor, as long as they sign the indemnity. So far that has not caused any problem but there is clearly potential for it being so.
My main problem is that the money turns up in my client account as a counter transaction with no reference of any sort and it then involves research to work out which client it is for

6

A potential issue with accepting unrequested closing balances pre-grant in a testate estate is that if the Executors subsequently wish to renounce, they will be unable to do so, having intermeddled by accepting the funds.

Anthony Kalp
Berry & Lamberts LLP

1 Like
7

Thanks Anthony, that makes sense. Presumably the same issue regarding intermeddling applies in an intestate estate?

8

In an estate I’m dealing with, a building society is requesting that the executors sign a personal indemnity after a Grant has been issued, and the organisation won’t release funds otherwise. At a push, the executors would be willing to sign a limited indemnity (up to the value of the balances held) but it seems like it’s an ‘all or nothing’ requirement. Has anyone come across this?

9

It may not be sensible in all the circumstances, but it would be satisfying to send a short letter before action. The executors stand in the shoes of the deceased account holder and, having produced the grant, are entitled to receive the monies.

It may even be sensible if you reach an impasse. Engaging the banks legal team might draw some proper attention.