When someone dies, the difficult process by which financial institutions allow the deceased person’s funds to be released has long been cause for complaint.
Before distributing money in a deceased person’s account, financial institutions generally require executors to obtain a Grant of Probate, which is a legal document confirming that the executor has the authority to administer the deceased persons assets. However, obtaining a Grant of Probate can be a laborious undertaking. Executors have to complete an inheritance tax return, as well as satisfy the court about the deceased person’s estate – certainly not a task for the faint-hearted. Therefore, so as to avoid these complexities, having funds released without a Grant can be greatly advantageous for the executors and beneficiaries alike.
The strict approach hasn’t necessarily been the fault of the banks. Current laws only permit some financial institutions to release up to £5,000 without a Grant. HMRC guidance also states that the maximum amount transferable without a Grant should not exceed £5,000. This limit, which has been in place since 1984 and is therefore unreasonably low in today’s money, is in HMRC’s interests as any funds released without a Grant could mean that inheritance tax is going unpaid. However, the COVID-19 pandemic has given banks the impetus to extend their financial limits and, over the last few months, there have been reports of banks releasing up to £125,000 without a Grant of Probate. This is a drastic change that in many ways should be applauded. At a time when money has been tight for a lot of people, swiftly releasing much-needed funds could make a significant difference for struggling families. Financial institutions themselves have said that they want to make things as easy as possible for bereaved families, particularly when the usual face-to-face support is not generally a viable option.
When someone dies, dealing with their finances can be a real headache for family members. One of the biggest questions that comes up is whether you can access the deceased’s money before going through the full probate process This is something I’ve researched extensively, and I want to share what I’ve learned with you
The Short Answer
Yes, money can sometimes be released before probate, but there are strict limitations and potential risks to consider. Financial institutions have different policies, and what was once a £5,000 limit has evolved significantly in recent years.
What is Probate and Why is it Required?
Probate is the legal process that confirms an executor’s authority to administer a deceased person’s estate. It involves completing inheritance tax returns and satisfying the court about the deceased’s assets Most banks and financial institutions typically require a Grant of Probate before releasing substantial funds from a deceased person’s account
This process can be lengthy and complicated – definitely not a task for the faint-hearted! That’s why many people wonder if there are ways to access funds before going through the full probate process.
When Can Money Be Released Without Probate?
There are several circumstances where funds might be released without a Grant of Probate
1. Small Amounts
Traditionally, financial institutions would only release up to £5,000 without requiring probate. This limit was established back in 1984 and has become unreasonably low in today’s money. However, during the COVID-19 pandemic, some banks began releasing much larger sums – with reports of amounts up to £125,000 being released without probate.
2. Joint Accounts
If the deceased held a joint account with rights of survivorship, the surviving account holder can usually access the funds immediately without needing probate.
3. Funeral Expenses
Some banks will release limited funds specifically to cover funeral costs.
4. Through a Solicitor
Interestingly, banks sometimes take a more relaxed approach when dealing with solicitor firms. In some cases, accounts have been closed and proceeds distributed with nothing more than a letter on a law firm’s letterhead!
Benefits of Accessing Funds Before Probate
There are several advantages to getting money released before probate:
- Quick access to funds – Helps with immediate expenses like funeral costs
- Reduced stress – Provides financial relief during an already difficult time
- Avoiding paperwork – Skips the complex probate application process
- Flexibility for executors – Allows them to manage urgent estate expenses
For struggling families, especially during difficult economic times, this quick access to funds can make a significant difference. Financial institutions have recognized this and have stated they want to make things easier for bereaved families, particularly when face-to-face support isn’t always available.
The Dangers of Pre-Probate Fund Release
While accessing money early seems helpful, there are serious concerns to consider:
Fraud Risk
Unfortunately, some people see death as an opportunity to commit fraud. A Grant of Probate offers protection because it confirms the person collecting assets is authorized to do so. Modern Grants even include high-security holograms to prevent forgery.
When banks don’t require probate, it becomes easier for someone to falsely claim to be an executor or beneficiary. They might produce an outdated will or even claim no will exists at all.
Inconsistent Bank Policies
Different banks have different policies about releasing funds without probate. One might release £100,000 without a Grant, while another demands one for just £30,000. This inconsistency creates confusion and allows fraudsters to target banks with the most relaxed policies.
Limited Verification
While banks do have processes for releasing funds without probate (like requiring death certificates or ID), these measures aren’t foolproof. There are legitimate concerns about how real executors and beneficiaries can recover funds if someone fraudulently acquires them.
What Should the Limit Be?
The banking industry recognizes that a community-wide agreement must be reached on a reasonable financial limit for consistency. The old £5,000 limit is clearly too low in today’s economy, but £125,000 might swing too far in the opposite direction.
Eventually, we hope a compromise will be found that balances:
- The need to protect vulnerable people from fraud
- The practical need for families to access funds during a difficult time
Protecting Yourself and the Estate
If you’re an executor or beneficiary, here are some steps to take:
- Identify the true executor quickly – This allows beneficiaries to hold them accountable
- Contact banks immediately – Make sure your details are on their records
- Stay alert to potential fraud – Be vigilant about protecting the estate’s assets
- Consider professional help – An attorney can navigate these complexities
- Understand each bank’s policy – Know the rules before approaching them
What Happens During Full Probate?
If full probate is required, the process typically takes 6-12 months before beneficiaries start receiving their inheritance. During this time:
- The executor or personal representative petitions the court
- The deceased’s property is gathered and an estate bank account opened
- Debts and taxes are paid
- Remaining assets are distributed to inheritors according to the will or state law
- The estate is closed
It’s important to note that the personal representative generally cannot distribute assets until a final distribution order has been granted at the end of probate administration. There are exceptions for family allowances to support the decedent’s spouse and dependents, but these require proper legal guidance.
Special Cases in Early Distribution
For any distributions before probate closes, the personal representative must file a petition for preliminary distribution and provide compelling reasons why assets should be distributed early.
If a personal representative distributes assets too soon without proper authorization, they could be personally liable if problems arise later. This is why most executors are cautious about early distributions.
What If There Are Will Issues?
If there are problems with the will itself, things get more complicated. A will might be contested if there are concerns about:
- Lack of proper execution (not properly signed/witnessed)
- Lack of capacity (the deceased wasn’t of sound mind)
- Undue influence or fraud
- Revocation (a newer will exists)
- Forgery
Similarly, if the will contains unclear language or a beneficiary has died, additional legal steps must be taken to resolve these issues before distribution.
My Experience and Recommendation
In my work helping clients navigate estate matters, I’ve seen both sides of this issue. While early access to funds can be a lifesaver for families struggling with funeral costs and immediate expenses, I’ve also witnessed the devastation caused by fraud.
I generally recommend that executors work with an experienced probate attorney from the beginning. Even if you’ve already started the process on your own and made mistakes, professional help can still get things back on track.
For now, the best protection against potential fraud is to remain vigilant and act promptly following a death. Ensuring the real executor is identified quickly and that financial institutions have the correct details on file are crucial first steps.
Can money be released before probate? Yes, but with significant limitations and potential risks. While financial institutions have become more flexible in recent years, there’s still a need to balance accessibility with fraud prevention.
The current situation – with widely varying policies between banks – isn’t ideal. A more consistent approach would benefit everyone involved in the probate process.
If you’re dealing with a loved one’s estate, make sure you understand the specific policies of each financial institution holding their assets. And don’t hesitate to seek professional guidance – the complexities of probate law can be overwhelming during an already difficult time.
Have you had experience with accessing funds before probate? I’d love to hear your stories in the comments below.
However, could this sudden change be a problem?
Some people unfortunately see death as an opportunity to commit fraud, with grieving relatives who are often elderly and vulnerable potentially being targets. A Grant of Probate offers a degree of protection, as the process to obtain one helps to ensure that the person collecting the assets is the person entitled to do so. Additionally, Grants of Probate now include a high-security hologram expressly to counter fraud, giving them a heightened advantage against forgeries. In contrast, where banks don’t demand a Grant it is easier for someone falsely to claim to be an executor or beneficiary of an estate, for example by producing an out-of-date will or even claiming that no will exists at all.
Banks should (and do) have processes in place for releasing funds without a Grant, such as requiring copies of the death certificate, a certified copy of the will, or sight of the executor’s ID. However, this is by no means foolproof. Another concern is the relaxed approach banks seem to take with solicitor firms. In these instances, accounts have been known to be closed and proceeds distributed without any documentation aside from a letter with a law firm’s letterhead. Additionally, if someone is able to fraudulently acquire funds from an estate, there are further concerns about how the real executor and beneficiaries attempt to recoup those funds.
Is there a solution?
A safety measure that beneficiaries can employ is to ensure that the true executor is identified quickly. This allows beneficiaries to hold the executor to account so that they know the deceased’s assets are being looked after properly. It is also important that the executor and family members contact the relevant banks and building societies quickly so that their details are on the bank’s records. However, the inconsistency between banks compounds the problem. One bank might be willing to release £100,000 without a Grant, yet another may demand one before releasing £30,000. It is very easy to find out what each bank’s current financial limits are. Fraudsters can therefore concentrate their efforts on banks that are willing to release higher sums, perhaps also with less stringent protocols.
In the banking world, there is a community-wide understanding that an agreement must be met over a reasonable financial limit in order to provide consistency. Clearly, £5,000 is too low, but £125,000 may tip the scales too far the other way. Eventually, it is hoped that a compromise can be achieved, balancing the withholding of funds until a Grant of Probate has been obtained against the risk of placing vulnerable people at greater danger if banking processes are relaxed. For the time being, staying alert and responding quickly after a death is the best way for executors and beneficiaries to protect the estate against potential fraud.
First published on eprivateclient. Reproduced with permission.
When Will I Get My Money From The Probate?
FAQ
Do I need a grant of probate?
Banks will usually release money up to a certain amount without requiring a Grant of Probate, but each financial institution has its own limit that determines whether or not Probate is needed. If it falls above the threshold, then you probably will need to apply for Probate.
Can an executor release money without probate?
The executor can access the funds in the account as needed to pay debts, taxes, and other estate expenses. When the estate is closed, the executor can close the account and distribute the money according to the will. However, the executor cannot use the funds for their own purposes or as they wish. Will banks release money without probate?
Should executors release funds before probate?
Flexibility for Executors: Executors can use the released funds to manage the estate more effectively, such as paying outstanding debts or making necessary investments. Drawbacks of Releasing Funds Before Probate: Subscribe to Empowering Your Financial Journey!
Can I release money without a grant of probate?
Potential for Fraud: Releasing funds without a Grant of Probate increases the risk of fraud, as it may be easier for someone to falsely claim to be an executor or beneficiary. Limited Amounts: The amount of money that can be released without a Grant of Probate is often limited, which may not be sufficient to cover all immediate needs.
Can you take money out of an estate before probate?
. Furthermore, the personal representative generally cannot distribute assets until an order for final distribution has been granted at the end of a probate administration.
What if I need access to funds before probate is complete?
If you need access to funds before probate is complete, there are a few alternatives to consider: Petition the court for an early distribution: In some cases, the court may approve an early distribution of assets if it is in the best interests of the estate.
What can you do while waiting for probate?
- Take steps to protect residences. …
- Keep up with regular house maintenance. …
- Lock up valuable items. …
- Keep track of personal valuables. …
- Secure and maintain all vehicles.
What happens if assets are distributed without probate?
To summarize, there are possible negative consequences that could result when someone fails to file for probate: Assets cannot be passed on. You could get sued. Issues regarding the Will could remain unresolved.
Can you take money out of a bank account before probate?
Many banks will let you take out some limited money before probate is granted to pay for funeral expenses or inheritance tax.Mar 7, 2025
How long after someone dies is the money released?
Simple estates might be settled within six months. Complex estates, those with a lot of assets or assets that are complex or hard to value can take several years to settle. If an estate tax return is required, the estate might not be closed until the IRS indicates its acceptance of the estate tax return.