As well as deeply saddening, bereavement can be financially stressful for those left behind. Unexpected costs can leave surviving partners and family members struggling, leading some to ask if a bank can release funds without probate.
The answer to this question is broadly yes. Most banks will release at least some funds without needing to see a Grant of Probate. Indeed, most banks know that Inheritance Tax has to be paid – often from the deceased’s estate – before probate can be granted.
However, most financial institutions have their own rules in place. Some banks may even release large levels of funds without probate. But if you go too far with accessing these funds, you can leave yourself open to problems later down the line.
Can A Bank Release Funds Without Probate?
Yes, most banks will release limited funds from the bank accounts of someone who has died to certain parties without probate. Generally, these funds are intended for three very specific purposes:
- Covering funeral costs
- Paying probate fees
- Paying Inheritance Tax (this is actually required before a Grant of Probate can be issued)
Legally speaking though, banks aren’t required to release any funds at all without seeing a Grant of Probate from the executor of the estate or a Grant of Letters of Administration from the administrator (if the person in question died intestate, without a will).
How Much Can A Bank Release Before Probate Is Granted?
According to law, as of 1984, banks were limited to releasing only up to £5000 before probate was granted. These days, that’s not a lot of money.
Today, most banks will allow certain people to access far more than that. This figure varies and individual banks are currently free to set their own limits. Some may allow you to access up to £50 000 or more. Others may limit you to something more like £10 000 or £15 000.
Banks may also allow you to access smaller or larger amounts depending on the overall size of the assets in the deceased’s bank accounts.
Who Decides How Much Can Be Released Without Probate?
Despite the theoretical legal limit, individual banks and building societies tend to set their own rules for how much they release without probate.
The easiest way to find that limit for your bank is to check their website. Most are completely upfront about it.
Who will a bank release funds to?
In theory, a bank should only release funds of any significant size to the executor named in the will bearing a Grant of Probate or the chosen administrator of the estate with a Grant of Letters of Administration.
However, in recent years – especially during the COVID-19 pandemic and beyond – banks have begun to release ever-larger sums of money from the bank accounts of deceased people without asking to see a Grant of Probate or similar legal permission.
For those desperate to secure funds in a difficult time to cover the costs of funerals and the like, this has no doubt been a saving grace. Arguably, the original £5000 limit is far too small for modern needs in any case.
But probate rules largely exist for very good reasons. A Grant of Probate is only issued to someone who has proved they have the legal authority and are trusted to manage the estate of someone who has died. Not following probate rules risks the deceased’s wishes not being fulfilled.
There’s another risk too. Inheritance Tax has to be paid. Records of the deceased’s bank account (and their other assets) exist. Gaining access to the funds early might feel like a windfall. Needing more money to pay Inheritance Tax and other legal requirements later on feels much less positive.
What Can Released Funds Be Used For Or Spent On?
The only purposes that the funds released from the accounts of someone who has died before probate should really be put to are funeral costs and paying Inheritance Tax and probate fees.
As mentioned above though, growing laxity of implementation of the law following COVID-19 has seen these purposes being stretched. However, using access to these funds for other purposes can be very risky.
If a partner dies will a bank release funds from their sole accounts to the other partner?
Generally, a bank should freeze the sole account of someone who has died as soon as they are notified of the death. In order to release funds even to the other partner, a bank will normally want to see:
- A copy of the death certificate
- A certified copy of the will
- The executor’s ID
The amount of time it takes to receive access to these accounts – and the level of funds that can be accessed – will depend on all of the factors mentioned above. Chiefly, the bank’s own regulations as well as perhaps the scale of the funds requested and those in the deceased’s account.
Of course, this is dependent on the language used in the will clearly showing that – as it does in many cases – the surviving partner will inherit everything in the sadly departed partner’s account. This makes a professionally written will a must for partners who have sole accounts yet are financially dependent on one another.
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