Banks requesting probate

[GeorgeGre]

When a bank withholds funds in a plain and simple bank account, and requests a probate, what authority allows them to do this? Is it law, or part of their terms and conditions? I have a customer (I work in a migrant welfare agency) who is an only child and sole heir to her late father. There are no other assets. Her father's lawyer has asked for thousands to do the probate for her, with an upfront fee - money she doesn't have. She swears that her father would never have left the money in his account this way if he had known that this would follow. I explained to her the point of a probate, and why the bank wants one, and she understands, but is unhappy with them anyway as they are the only obstacle preventing her from accessing her inheritance. She is on an invalid pension and is struggling to make ends meet. She says she has spoken with the bank more than once, and they said that this is just the way it's done. I think it was just the call ccenter, but I think she would like a better explanation than that. I suspect it's in the terms and conditions somewhwere, but I'm only guessing.

 

[Tim W]

Which state?

 

[Tim W]

When a bank withholds funds in a plain and simple bank account, and requests a probate, what authority allows them to do this? Is it law,

In short and simple, yes.
As a default position, until they are satisfied that their client is dead,
their statutory obligations to protect their customer's money continue to apply to them.
Once they are satisfied that their customer is dead, then their obligation is
to only hand over to the money to somebody who is, at law, entitled to it.
They work out who that is by requiring production to them of either
a Grant of Probate or Letters of Administration.
Either of these two instruments can be proof that the person who wants access to the account
is someone who is, at law, entitled to that access.

I have a customer (I work in a migrant welfare agency) who is an only child and sole heir to her late father.

Can I suggest the word "client".

There are no other assets.

Lawyers often get asked questions in the line of
"But it's a simple estate, he didn't have much, can't we just split up his things and move on?"
Short answer is "no".
For one thing (at least in NSW), between death and Grant, the assets are (as a matter of law)
vested in the NSW Trustee and Guardian.
The grant is the legal trigger to change that to the Executor.
Further, people are sometimes surprised at how much cash the deceased had in the bank.
Sometimes, this is, unexpectedly, more than the bank's own small estate threshold.

Her father's lawyer has asked for thousands to do the probate for her, with an upfront fee - money she doesn't have.

Is the problem the up-front part, or the "thousands"?
She is entitled to negotiate with the lawyer.
If negotiating doesn't work, then a complaint to the Law Society
(or comparable body in her state) can be a nice way to... smooth the path.

Note that the other thing that may be in play is
that there may be an unpaid bill for storing the file - the will and related documents.
Such bills sometimes go unpaid for ages, sometimes, years.
The thing being, that a bill of this type is often (even usually) payable from the estate.

She swears that her father would never have left the money in his account this way if he had known that this would follow. I explained to her the point of a probate, and why the bank wants one, and she understands, but is unhappy with them anyway as they are the only obstacle preventing her from accessing her inheritance.

No, the absence of a Grant is the obstacle.

She is on an invalid pension and is struggling to make ends meet. She says she has spoken with the bank more than once, and they said that this is just the way it's done. I think it was just the call ccenter, but I think she would like a better explanation than that. I suspect it's in the terms and conditions somewhere, but I'm only guessing.

You are probably guessing right.
But her problem is not actually with the bank, is it?