It seems to be occurring more and more often, where a family member takes care of their affairs ahead of time, then when they pass, their bank still requires you to apply for probate.
Shouldn't a Last Will and Testament avoid this?
It should. It's supposed to do this, among many other important things.
Yet, if the bank has a policy that requires approval from the courts, they will not let anyone not linked to the account access to their account.
This is quite understandable if there is any suggestion of fraud, misrepresentation, or manipulation that might occur.
And it might also make sense if the account has a vast amount of funds or investments that need to be ensured it goes to the right party.
And, just as important, my hunch is the banks don't want to be liable to the estate if they make an error in judgement on granting someone access when this person does not actually have the right to.
Either way, this is a complex and important process that may be a difficult and time-consuming challenge for anyone not familiar with the requirements.
Right now, if you are dealing with the loss of a loved one, I can imagine you really don't want, or need, to be dealing with courts or bank managers. If you make a mistake, expect plenty of back and forth with the courts to get it approved.
Also expect that you will have to prove that all eligible heirs have been addressed, notified, and they sign off to the application.
Once the probate application is submitted and approved by the court, this gives you full access to all estate matters as per the application. The bank will allow you full access as they rely on the decisions from the courts to determine that you have the right and are entitled to the account.
I had a client whose mother passed away. There was only $1,200.00 in the account. Her mother properly signed her Last Will and provided the instructions in it, which were all legal and normal. Yet, her bank required a Probate decision from the court. And as you can imagine, the cost to complete this was more than the amount in her bank account, if they hired anyone to help them. However, if they didn't follow through and gain a successful decision from the courts, then the bank keeps their funds and any other accounts, property, investments, among others, will not be released to the estate to give to the beneficiaries.
This is a complex application, one that few take on as it is not a quick process and it requires a high level of detail to complete successfully. I have another client, who's Executor and Beneficiaries are in another country. This is understandable for the bank to require this when the parties involved are not present in Canada or can physically be at the bank to follow through on the closing of their brother's account. Even with Power of Attorney signed by the Executor, fully legalized and verified, the bank still required the Probate application submitted to the courts and have a decision made on the estate, before they would release the account and it's funds transferred to the Beneficiaries. Our office is in the process of this application, as one of our Notary Public officers is able to complete and file the Probate application. This allows the Beneficiaries, even if they are not in Canada, to follow through on the instructions in the Last Will. If you are looking for help, whether you are in Alberta or somewhere else, contact us here and we can provide you with a quote for the Probate application.