The Financial Conduct Authority has fined Santander almost £33 million for failing to transfer over £183 million of deceased customer’s funds when they should have. This directly affected 40,428 customers.
The Financial Conduct Authority found that Santander’s process for dealing with deceased customer’s accounts contained weaknesses that reduced its ability to identify all funds which it held which formed part of a deceased customer’s estate. Certain funds belonging to deceased customers were not identified, and not transferred to the relevant beneficiaries.
Santander has now reviewed its processes, and took steps to improve the way they handle deceased customer’s accounts.
Whilst Santander are now seeking to transfer funds to the relevant beneficiaries, there can be issues for Executors who are responsible for administering an estate if estate assets are not identified until after a considerable time.
When an individual passes away, the Executor usually has to apply to the Court for Confirmation. The application for Confirmation includes an inventory of the deceased’s known assets. Confirmation is a legal document which gives the Executor the authority to ingather the estate assets which are listed in the Inventory.
If additional estate assets are identified which were not included in the original Confirmation application, then the Executor will have to make a further application to the Court. This is known as an “EIK”, or a Corrective Inventory. This application must detail the additional asset, and the value of it. There may be potential Inheritance Tax payable as a result of the additional asset, therefore the application may have to be sent to HMRC before it can be lodged at Court. When the application is granted by the Court, it is treated as part of the original Confirmation application, and the Executor has authority to ingather the estate asset.
There can be various reasons why a corrective inventory may be required. For example, estate assets may simply have been unknown at the time that Confirmation was applied for. It can also be used to correct an error made in the original inventory, or to reflect the true value of an estate asset that may have been over estimated.
If an Executor believes that a Corrective Inventory may be required, or would like some advice in relation to this, you can get in touch with one of our specialist solicitors on 0800 089 1331 who will be happy to assist.
Blog by Amy Wardrop, Solicitor