Banking Protocol to Improve and Assist the Administration of Estates

Nobody likes to think about the amount of administrative work that often needs to be done when a loved one dies.

Few of us know what’s involved in administering an estate, yet many of us will have to face this task at some point in our lives. Everything from registering the death, to arranging the funeral and administering the estate needs to be tackled.

The procedure for administering an estate is rarely an easy task and in many cases requires the advice of a specialist solicitor, to work through the administration and prepare all the necessary documents, including applying for a grant of probate.

When these documents are ready those family members responsible for the estate need to make decisions about the future administration, unless they have engaged the services of a solicitor who will do the hard for them. Issues like Inheritance Tax have to be dealt with and the deceased’s income tax affairs must be settled before the winding up of the estate can be completed.

The process can take many months and delays can and do occur, frequently due to difficulty in finalising the Inheritance Tax or Income Tax liability. Unfortunately delays not only increase the time spent upon the administration, they often result in increased costs as well.

In order to minimise time, costs and resulting stress the Law Society in conjunction with Society of Trust and Estate Practitioners (STEP) has agreed a new protocol with the British Bankers’ Association (BBA) to help solicitors navigate the different administrative procedures of each bank in the process of winding-up an estate.

The protocol covers the exchange of information between banks and solicitors and estate practitioners following the death of a bank customer. It is relevant to any solicitor involved in the administration of estates as they can experience difficulty and delay during the estate administration process in relation to assets held by banks.

It brings clarity to probate-related dealings between solicitors and banks by allowing solicitors to efficiently negotiate the different administrative procedures used by banks for releasing assets held by deceased customers. It has been signed on behalf of Barclays, HSBC, Lloyds TSB, Halifax, Royal Bank of Scotland and NatWest and covers the handling of current, savings, credit card and unsecured loan accounts.

Managing relationships with banks and building societies has long been a problematic aspect of probate practice. The protocol unlocks the labyrinth of administration, costs and stress for grieving relatives by helping their solicitor to negotiate the different administrative procedures involved in winding-up an estate.

This latest initiative builds on the foundation of the protocols already entered into by some individual banks. The purpose of the initiative is to bring greater clarity and consistency to these arrangements. This should help to prevent unnecessary delays and uncertainties when administering a deceased customer’s bank accounts, helping to shield relatives of the deceased from further costs and stress at a very difficult and sensitive time.

The cooperative, constructive approach demonstrated by the banks involved sets an encouraging precedent for similar initiatives in the future. The Law Society, STEP and the BBA are encouraging banks and similar financial institutions currently outside the agreement to consider adopting the protocol.

Meanwhile, for the banks themselves the protocol will improve their operational arrangements, clarify their procedures and improve the experience for people using their services, be they solicitors, STEP members or customers.

Ultimately, and most importantly, a more streamlined and efficient service will benefit clients and customers, easing their stress and lowering their costs at a difficult time.