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Email this12:49 am
May 20, 2016
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How anal is CC with deceased accounts? Do they automatically freeze the bank account even though there is a Will and beneficiary while insisting on a completed probate before releasing any funds? It seems CC employees are very poorly trained.
Thanks
8:11 am
October 27, 2013
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You have to be more clear on what your issue is. Any bank account (in any FI) in a single name is frozen at least until the Executor of the Estate with a Certified Copy (or Notarized Copy) of the Will and copy of Statement of Death from the funeral home goes to the Institution, and (likely but not always) fills out a Letter of Direction directing the Institution to pay out the bank account to the Estate. (or to a beneficiary of the Will). There is no obligation for the FI to do so. They can insist on Probate first. It depends on how much money is involved and the relationship the Executor has with the FI itself. Odds are against pre-release of funds before Probate.
If there is a lot of money involved, the Estate will have to go through Probate before the FI will release the funds. It is for their own protection against creditors.
JTWROS (joint) accounts are different, i.e. no letter of direction may be required. The Executor shows up with a copy of the Will and Statement of Death and the funds become the property of the remaining surviving joint account holders, either in the 're-named' joint account, or a new account with surviving joint account holders. Example: When my father died over 20 years ago, the joint account with his surviving wife simply became an account in her name only. But when she died last year, the account was frozen until Probate was completed, and the funds were they released to the Estate as directed by the Executors.
8:23 am
April 6, 2013
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Freezing the account until someone shows up with legal authority to act as the executor is the correct thing for a financial institution to do.
See previous discussion Tangerine Bank keeping deceased clients money.
A will that has not been probated does not carry legal authority. There could be a more recent will. Also, if the person got married, then that would automatically revoke previous wills. There was a case of this reported recently in Hamilton Spectator (April 18, 2016): Secret wedding: Women lose their father and inheritance — to the lady next door.
9:58 am
December 23, 2011
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Please delete my response ,,,,thanks
12:41 pm
May 20, 2016
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It's unfortunate to see a lot of incorrect or misleading information posted here. It's no wonders lawyers say stay clear away from the internet when trying to get Wills and Estate information.
In certain situations, financial institutions will not require probate if the bank balance is more than $25,000, provided that the executor signs a letter of indemnity. This is often a standard bank form. The letter of indemnity will outline that if the financial institution is wrong in recognizing that the Will is valid and pays the bank balance to you in error, you will indemnify the bank or pay back the money you were paid in error.
Banks have different thresholds for using the letter of indemnity. If the deceased was a regular client, and had an excellent relationship with his or her banker, then the financial institution is more likely to use the letter of indemnity. Some financial institutions will insist on probate of the Will if the value of the bank account is more than $25,000, even by $1,000. If there is no will, it is unlikely that the financial institution will pay out the bank balance without a grant of administration.
Executors' don't usually have to wait to open an Estate account. When the account is opened will depend largely on whether you are an executor (i.e. appointed by a valid Will) or an administrator (i.e. appointed by the courts in the absence of a valid Will). An administrator has no authority whatsoever to take charge of the deceased's money until he or she is appointed by the court. In other words, he or she can't open an account until the court provides them with a document putting them in charge.
If you're an executor, however, you can open the account at any time once you take charge of the estate. Your authority to do this comes from the Will, not the probate. The name on the account should make it clear that this is not your personal money and that you are holding it in the name of the estate. If the deceased is John Smith and you, the executor or administrator, are Mary Smith, the account should be called either "The Estate of John Smith" or "Mary Smith, Executor of the Estate of John Smith".
In reality though, the vast majority of poorly paid and even well-paid bank employees don't know much how to process a deceased bank account. Instead, they blindly follow their internal procedures without giving any thought what they are doing. If you question or challenge them, they tell you to go see a lawyer, resulting in additional time and expense. Once your lawyer becomes involved, the horrible bank passes the buck to their legal department. It's basically a stall tactic for them to hold onto the funds as long as possible. Many people just blindly take what their bank tells them at face value not knowing any better. I feel how some financial institutions deal with estates is unethical and immoral. CC supporters may think otherwise.
As stated above, the Will is the legal document. Some financial institutions in BC have been fined for not following the Supreme Courts Judge's authority to allow access to bank accounts. Sadly, this will continue until branch managers are held personally accountable for the actions and the actions of their staff. In other countries, bank managers may be put in jail for not following a judge's order.
It sounds to me like CC is one of those financial institutions that should be avoided. I shall open up an Executor account with another financial institution.
1:49 pm
October 21, 2013
Online
People who need legal advice should see a lawyer. That is not the purpose of this forum.
People who want to discuss the ethics of a particular institution should provide a straightforward account of their complaint.
People who belong to this forum may have any number of reasons for doing so. Most find something of value in what at least some other members contribute. Some are disruptive, but they get dealt with by the moderator. Some have other kinds of agendas which become obvious sooner or later.
3:30 pm
October 27, 2013
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From the OP's second post, it is obvious s/he already knows how the system works and yet came here, it seems to me, for the primary reason to dump on Coast Capital.
CC has no obligation to release any funds until Probate has been obtained (correctly called grant of administration in certain jurisdictions), but may* do so to cover utility bills for example, or if the account balance is small with a letter of indemnity. The FI does not have to accept a letter of indemnity (perhaps the Executor is shady, has questionable financial credentials him/herself, or tries to be a jerk/bully). May help to try and play nice. Leave it at that.
* Is precisely what happened to my mother's estate last year. We took the bills to the bank branch and they paid them out of mother's account funds. But they would not let us pay the bills directly from the account (can understand that too). Need an Estate account for the Executor to do that.
8:16 pm
April 6, 2013
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AltaRed said
From the OP's second post, it is obvious s/he already knows how the system works and yet came here, it seems to me, for the primary reason to dump on Coast Capital.
....
I have my doubts about the OP knowing the system. Most of the second post is from text stitched together from two lawyers, each from different provinces, taken out of context.
The two paragraphs about bank balances over $25,000 and letters of indemnity are from lawyer Mary-Jane Wilson's British Columbia Probate Kit published by Self-Counsel Press.
The missing context of the two paragraphs is that, according to BC law firm Heritage Law Probate Fees article, BC has no $200 filing fee and no probate tax on estates $25,000 or less.
Consequently, there's little, if any, obstacle in BC to obtain probate for small estates.
I agree. A financial institution does not have to accept a letter of indemnity. As a lawyer, Wilson qualifies her statement: "In certain situations, ... provided the executor signs a letter of indemnity".
The letter is worth only as much as the credit of the person signing it. If the person has few assets or bad credit history, then the financial institution would like require probate even if the amount is less than $25,000.
The three paragraphs about Estate bank accounts are from the Newfoundland lawyer Lynne Butler's blog entry How and when to set up an estate bank account.
The full blog entry is about opening an Estate bank account after apply for probate and waiting for probate to be granted. It talks about depositing cheques for the deceased or for the estate. There's no mention of the to-be-confirmed executor being able to freely write cheques from the account while probate is pending.
I don't think a financial institution would allow significant money to be freely moved out through an Estate bank account on the direction of an unconfirmed executor. There would be no protection for the financial institution from liability to creditors.
How estates are dealt with is regulated under provincial law. Unfortunately, the laws in each province are not harmonized. One cannot just paste together material, out of context, from two different provinces and draw conclusions.
8:22 pm
October 21, 2013
Online
Gold star for Norman!
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