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arsen lupin

Banks demanding probate

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Our mother recently passed away, her property had been gifted to us her three children in 2015, along with most of her wealth. We are the only executors and beneficiaries of 

her Will. She had left £60,000 in a building society account, which along with a substantial pension would have stopped any accusation of deprivation. Having contacted HM Probate they have confirmed we do not require probate, as no IHT liability HMRC are also not interested in any unnecessary paperwork at this time.

 

We have informed The Building society, (which all three of have also held accounts for over 40 years) of our loss, and have offered copy of Will, death certificate, our own ID and letters of indemnity from ours or their solicitors to release the funds and close the accounts:

 

As it's over £20,000 they refuse to release funds without probate, this is from their CEO

 

As this appears do just do with indemnity, what legislation gives financial institutions this right and what is the alternative solution to release the funds?

 

 

 

 

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Posted (edited)

You do need probate if they say you do.  Banks etc. have their own limits on how much they will release without probate and there's no getting round it.  They could set it at £5k if they wanted because a Grant of Probate is the legal authority to access the funds.

 

I have just gone through the process and after some initial difficulties in paying over the phone they've dealt with application with record speed.  Just do it and you'll have access to the money much faster than if you try and argue the point.

Edited by hightail

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Thank you Hightail, 

 

Sounds like you have been very fortunate. But before going down that route, as both HM Probate and HMRC said it would be saving them unnecessary work during the current crisis. The questions we ask are as follows, What legislation gives financial institutions this right and what is the alternative solution to release the funds? We can then make a decision based on these answers.

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We've had experience of banks wanting to see probate and I'm afraid I have to agree with hightail.

 

Did you take legal advice in 2015 when the transfers were done? You aren't out of the seven year run off period, so you probably need to check that as you may need to declare it, unless the total gifts were under the IHT nil-rate band.

 

HB


Illegitimi non carborundum

 

 

 

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Thank you honeybee,

 

We may all agree with hightail, but the questions have yet to be answered.

 

To satisfy your own query. There is no IHT liability, as all property, gifts and current savings came well under our mothers threshold, (with the addition of our fathers unused nil band) and the matter already discussed with HMRC. Who surprisingly informed us, when probate is not required, neither any requirement to complete IHT forms. It was also them, who recommended seeking an alternative solution!

 

 

 

 

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Well I hope you find a solution. Sadly, neither hightail nor my OH managed to convince banks to drop the requirement.

 

HB


Illegitimi non carborundum

 

 

 

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Hi Andyorch,

 

Thank you for the above link, unfortunately we don't see the answers to our questions. This is a subject that affects thousands every year. Everyone complains, no one likes it. Some banks have raised their limits, HSBC did away with it completely! (well done)

 

But what is the legislation that gives them the legal right and what alternative is available?

 

 

 

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Posted (edited)

The default position is that Probate is needed to authorise an Executor to take control of the assets of the deceased. It's the proof that the High Court (Chancery Division) has confirmed you are the legal personal representative and authorised to act. I couldn't tell you which specific piece of legislation covers it but every legal advice site you look at will confirm it. If banks etc accept your authority without Probate it's a non-statutory concession. They can insist on Probate even if the account only had £1 in it. For everyone's administrative convenience they usually don't require it for accounts that only have a small amount in them. Every bank has its own idea of what "small means". Typically £5k - £15k. £60k is not a small amount.

 

Banks are protected if they release a deceased's assets to some who has a Grant of Probate but if they release money without seeing Probate they are exposed to legal claims if someone else turns up later who does have Probate.

 

It isn't correct that HSBC have done away with asking for Probate. What I understand they say is that they will decide whether to ask for Probate case by case rather than publish a pre-set 'one size fits all' limit

 

Are you sure HMRC told you that Probate is unnecessary? Whether Probate is required is nothing to do with them. Their only role is in relation to IHT reporting and liability. They can't tell banks whether they should ask for Probate.

 

Life will be easier for you if you just apply for Probate. Arguing the point will just cause you delay and stress!

Edited by Ethel Street
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your probably already aware, if not its £215 to apply for probate online yourself fill in the IHT form and the probate form and send the original will and any other forms to any probate court listed, I must admit mine was straightforward. Mine was for getting a small amount of PPI well below the threshold but the bank were being awkward, and the best bit about it I still didn't get any money from them.

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Thank you for the above notes. To be straight, after being fully transparent, it was the HM Probate that said we didn't require probate, HMRC advised looking into other options, informing us that if probate wasn't required neither was filling IHT forms.

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Sorry 12345,

For your wait. We wish to seek other possible options before committing ourselves. We find hard to believe there isn't one.

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Hi Arsen,

 

I assume YM didn't leave a property to the beneficiaries but please confirm.

 

You'll be able to complete the simpler form IHT205, instead of the more complicated IHT400.

 

You may be able to do this yourself if you're reasonably competent with admin. If you need a solicitor to apply for Probate, get quotes from 2 or 3 first.

 

The Probate Registry may well be right to say they don't require your declaration for the Estate. However, if the bank requires Probate to release the funds, you need to make the application.


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The only time I have seen them back down on probate was when someone went to a hostile newspaper, there the only people they are scared of, there not even scared of courts.

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Hi Andyorch,

 

Having studied the 1925 act earlier today, can you possibly point out which para makes this clear. If this is the only act,  a county court have the power to grant the same indemnity?

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The bank have the money and they say they require Probate, as they are legally entitled to do. I can't imagine what other option could exist. 

 

Let us know if you find one.

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Posted (edited)

In answer to slick132,

 

Everything has always been divided equally between the three of us, Tax wise if we went down the probate route we only have complete 2 forms IHT205 and IHT217 plus copy death certificate. The IHT217 is for transfer of unused liability. The property was transferred to us in 2015 see notes above.

Edited by arsen lupin

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Hi Ethel Street, 

 

We're seeking a possible alternative for people in our position, who have only one financial institution to answer too, we feel some provision should be made for those in our situation. Possibly through a county court and simplified process.

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I'm sure anyone who's sorted out an estate felt the same way, I hope you find a way.

 

HB


Illegitimi non carborundum

 

 

 

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9 hours ago, arsen lupin said:

Hi Andyorch,

 

Having studied the 1925 act earlier today, can you possibly point out which para makes this clear. If this is the only act,  a county court have the power to grant the same indemnity?

 

It possibly does not point it out specifically but points 27 - 29 show reason as to why Probate is sensible when acting as an executor should any problems arise...yes I suppose you could fight it and get authority to act without probate....which would cost you more and excessive time in attaining this than just making the normal application.....but if the Bank adopt this policy this is their Policy and no matter what you gain in litigation...they simply will not cooperate.

 

But please do come back if you find alternative routes....it is fully understandable that  an uncomplicated estate should not require the hurdles and fees to administer...and simply appears to be a money making racket......but dont forget that Probate also protects the Bank and its liability against any possible fraud.


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The IHT205 will have to disclose all gifts and transfers over the last 6 years including the property.

 

Given the current Covid19 situation, I would file the IHT asap to save losing further time. This will be cheaper and quicker than seeking help via the court.

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1 hour ago, arsen lupin said:

We're seeking a possible alternative for people in our position, who have only one financial institution to answer too, we feel some provision should be made for those in our situation. Possibly through a county court and simplified process.

 

Applying for probate is incredibly simple these days if the estate is uncomplicated.  I honestly can’t imagine how any alternative could be considered a simplified process.  If you’re worried about a tax liability coming to light because of transfers before your mother died that’s another matter, nothing to do with the process.

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To  Hightail and slick132,

 

Please refer to the original post in which our circumstance is made very clear. 

 

Thank you to everyone else, who appreciates that this is a larger issue, than us personally saving a few bob.

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It's two simple forms and £215 pounds for a return of £60k.  Massively simplified since the last time I had to do it some years ago.  I honestly don't understand your comment that it's a 'larger issue'.  The .gov.uk website makes it perfectly clear.

 

Contact each asset holder (for example a bank or mortgage company) to find out if you’ll need probate to get access to their assets. Every organisation has its own rules. (my bold)

 

 

 

 

 

 

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