Why the bereaved must wait: Rules governing the release of money when a person dies can cause hardship for the survivors

FAMILIES around the country are incurring unnecessary costs and financial hardship, because the Government has done nothing for 10 years to speed up the release of money when a person dies.

Many of the problems are caused because the assets do not go immediately to the people who are to inherit.

The person sorting out the deceased's estate must have proof of authority to act - called probate. Banks, building societies and National Savings will insist on sight of the probate before they release the money in the deceased's account, although they will allow death-related expenses to be paid from the account.

The probate - the official document from the High Court - may take weeks, if not months or years, to get. Solicitors usually apply for the probate, and it can therefore be a costly as well as a time-consuming process.

There is one valuable concession, however. The Administration of Estates (Small Payments) Act 1965 allows certain organisations such as National Savings and the Bank of England to pay out the assets of the deceased without sight of a grant of probate. The problem is that it applies only where the amount in question does not exceed pounds 5,000.

The concession is not automatic. Gillian Cockburn, a solicitor from Guildford, Surrey who specialises in wills and probate, said: 'Even if the amount is under pounds 5,000, the body concerned may still insist on the production of a grant of probate before they will pay out the assets, usually - but not always - where the estate is complicated by family disputes or where there are a large number of beneficiaries who are entitled to the money.'

On the death of a husband who has a house jointly with his wife (where probate is not needed for the house to pass to her) and just pounds 6,000 of National Savings certificates in his name, the family will still need probate to get the certificates released.

When the small payments concession was introduced in 1965 it was pounds 500; it was increased to pounds 1,500 in 1975. In 1984 it was raised to pounds 5,000. The figure has remained unchanged for the past 10 years. A spokesman for the Lord Chancellor's Department said that there were no plans at present to raise the limit.

Miss Cockburn said: 'Although the Act does not specifically apply to banks and to building societies, they usually apply their discretion in a similar way, and will normally only pay out above the pounds 5,000 limit with a grant of probate.'

Some instituions are more flexible than others. The Cheltenham & Gloucester will require probate for single name accounts over pounds 5,000. The Abbey National has the same requirement, but 'there is the branch manager's discretion'.

The Halifax Building Society applies a more generous pounds 15,000 limit. A spokesman said: 'Under pounds 5,000 we just need a copy of the death certificate, between pounds 5,000 and pounds 15,000 we will need a statutory declaration, and only when it is over pounds 15,000 does probate have to be obtained.'

If one institution can be accommodating, there seems no reason why the others cannot act in the same way.

National Savings has no such flexibility. It is governed strictly by the pounds 5,000 limit.

If you have to get probate, then it is obviously cheaper to do it yourself rather than use a solicitor. But there are still costs involved in DIY probate. For estates of a net value of less than pounds 10,000 there is no probate court fee; for estates between pounds 10,000 and pounds 25,000 the fee is pounds 40. If you apply personally the Probate Registry will make an additional charge of pounds 1 per pounds 1,000 for processing the papers.

To avoid such probate problems, couples should consider having accounts in joint names. Then on the death of one of the named parties, you usually need only a copy of the death certificate to get access to the money straight away.

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