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Accounts of Deceased Depositors
 
Depositors' Department
 
Upon the death of a depositor, the Bank's Regulations (see NOTE below) required proof of death, this normally being by production of the Death Certificate, though obviously this document could have been provided already to a solicitor and the Probate Registry during the process of obtaining Probate of a Will, in which case production to the Bank of the Deed of Probate (or Letters of Administration) was sufficient proof. The same regulation allowed the Bank to assume death where a depositor had not been heard of for seven years, although in the experience of the writer of this article, this part of the regulation had never been invoked. (See Proof of Death). The Regulations also made clear provision for the various categories under which the deceased's estate may fall and these categories were based on the law of the land at the time. The order of succession of relatives entitled to claim the estate of a person who had not left a Will (i.e. a person who was intestate) was clarified by the Administration of Estates Act 1925 (as subsequently amended), but the Regulations were additionally allowed to give special consideration where at the time of death a deceased depositor held accounts which contained a sum or sums not exceeding 100 (later increased to 500), provided that Probate of Will or Letters of Administration (L/A) were not being obtained for separate reasons. For instance, despite there being only a small account with the Bank, Probate or L/A may have been necessary because of property ownership or large accounts elsewhere. For use where there was no Will, a useful Chart of Consanguinity explaining the order of relationship helped in the more abstruse cases!
 
If the account contained an amount not exceeding 100 (later 500), payment to a claimant had to observe an order of priority. The first priority was a claim by someone who had paid the funeral expenses, and this priority applied whether or not that person or organisation would have been a claimant in other circumstances. Examples of this often involved a depositor who had died in a Council Home and had no known relatives. Despite the fact that relatives may appear at a later date, the Council was allowed to claim the expenses of burial/cremation before any other distribution of assets took place and the same right would have applied to a private person - for instance, a landlady of the deceased - who had arranged the funeral. The regulations were quite precise about this and although on one occasion a solicitor (admittedly abroad) disputed the Bank's right to pay (a right which in fact applied to any account with the Bank, however large) and threatened legal action in order to restore the sum to his client, he was driven to apologise in due course, even though the expenses included air transport of the body to the place of burial.
 
Next in order of priority came a creditor of the depositor. Rarely did such claims occur and I also felt at times that the Bank could unintentionally involve itself too intimately in the application of this Regulation. In one particular case, I was invited to wade through a file several years old and a couple of inches thick. It comprised solicitors' and their creditor-clients' letters claiming the balance of an account in payment of outstanding public utility bills, much of the argument resting upon the fact that there was insufficient money in the account to pay them all, but sufficient to pay some. All had an equal legal right, but no one seemed to agree on who "deserved" most to be paid or in what proportions. The Bank had tried to reconcile the claims but had failed and no party had invoked the right to go to the Chief Registrar for arbitration (this also being an option offered by the Regulations) the solution to me was obvious. Agreement was as far away as ever. The estate was insolvent. One of the claimants could petition for bankruptcy and let the Official Receiver in Bankruptcy take over. As no one wished to go to the expense and trouble of doing that, they all dropped the matter and presumably wrote off the sums involved. The file was closed and the account became dormant, so is probably one of those that the Government will now take under its wing when the necessary legislation comes about.
 
Third and fourth in order of priority were those persons with whom in most cases the Bank would usually be dealing - namely those entitled by law, with the proviso that if they were claimants who through incapacity, including that of being a "minor", could not give a legal discharge they might be represented by a third party - usually a parent of the minor, for instance.
 
Of lesser priority were foreign subjects or British subjects with relatives living outside the British Isles.
 
Finally, at least so far as practical banking was concerned, there was the right of the Bank to forward to the Treasury Solicitor, on behalf of the Crown, any balance of the account of a deceased for whom no relatives could be traced.
 
A quite separate Regulation concerning the opening and operation of Joint Accounts included an important provision (which applies generally to this day) regarding the death of one of the parties to a Joint Account, in that the balance passed to the survivor(s), notwithstanding the existence of a Will. This did not absolve the surviving party/parties from other liabilities such as Estate Duty (now Inheritance Tax). So far as the Bank was concerned, in the case of the death of a Trustee in a Trust Fund it was also entitled to pay the surviving Trustees, although the terms of the foundation Trust Deed itself would naturally decide the subsequent manner in which the funds were used.
 
Separate Regulations also allowed for a depositor to "nominate any person to receive any sum due to such depositor deceased" - see Nominations.
 
So long as all these regulatory conditions were adhered to by the Bank, the phrase "shall be a good discharge to the Corporation for sums so paid" was in all events totally meaningful.
 
Dealing with accounts excluded from the "small accounts" category was quite different and these are discussed at a later stage.
 
It follows from all these rules that the practical side of dealing with the account of a deceased depositor was a quite complex and certainly important part of a Bank branch's activities and although there was centralisation of some matters to the Head Office of the Bank, a branch manager could not treat "deceased accounts" merely as a mechanical outreach of the law. A representative of a deceased depositor had to be treated with compassion and understanding, especially so in the case of a small account where the representation was unlikely to be through a solicitor, but instead by a spouse, child or other relative of the deceased making a personal visit to the Branch. As a young cashier newly returned from War service and the only branch staff member apart from the manager (a "two-branch", as it was called) it was a harrowing experience to be faced by a tearful widow who said that they had "scrimped and saved all their lives for a happy retirement" and that her husband had died suddenly only weeks after finishing work. It was a short and sharp reminder of the fickle nature of life and death and an early lesson in handling the affairs of someone in deep distress. At this stage, a Death Certificate would be called for, the particulars noted on the account ledger record and, depending upon the financial position of the deceased depositor, advice given to the person attending as to the necessary steps from that point onwards. Standing Orders, Direct Debits and other instruments such as a Power of Attorney registered on the account(s), would be cancelled or dealt with as necessary.
 
Where the estate did not exceed 100 (later 500) and neither was there a Will, two main Bank forms, MB17 and MB31 were involved, these being a Statutory Declaration to that effect made by a claimant representing all the legitimate claimants and the second form being a list, individually witnessed, of all these claimants, i.e. those persons deemed by the Statutes of Distribution to have a right to the proceeds of the deceased person's account(s). The Statutory Declaration had to be signed in the presence of a Justice of the Peace or alternatively by a Commissioner for Oaths. As branches were well aware of who were the local Justices of the Peace and also were aware that most of the local solicitors had a Commissioner among their number, this requirement did not prove too much of a difficulty for most claimants, though it was not unknown for a manager to arrange an appointment on behalf of the claimant if they were, for example, incapacitated in which case a J.P. might attend on the person at their home. I suspect that a very small minority of J.P.s were not always pleased to have someone knock on the door just as they were sitting down to their evening meal, but I never heard anything but satisfaction from all sides. After a month had elapsed, this being a necessary period to ensure that no dispute arose as to who were the legal claimants, the account could be closed upon application and as the Bank Regulations stated, the signed receipt, agreed with the signature on the Statutory Declaration, would constitute "a good discharge to the Corporation for the sum so paid".
 
Many claims, however, could not be deemed payable under the "small accounts" rules. Often notification of the death of a depositor would be received by letter from a solicitor requesting to be informed of the total account balance (including interest accrued to the date of death) of the deceased. (On receiving notification of death, a branch would inform Head Office in order that a search of the Nomination Register could be made.) The solicitor's letter would contain particulars of the death, pending lodgment of Probate of Will or Letters of Administration. From a practical point of view, these were the easiest situations to deal with. The salient parts of the Death Certificate or Probate (or L/A) would be hand-written or typed on to the ledger record as an "extract" and any steps taken, or necessary forms issued, to enable closure of the account(s) in due course, for that was the usual outcome of the solicitor's mandate. From a mercenary point of view, it was not a desirable solution as the funds were inevitably "lost" to some rival organisation, although in those times it was not considered so serious as it is now, as "service" rather than "profit" was the motivation of the Bank, if perchance the two conflicted. (I recall that a visiting inspector actually praised an overheard conversation in which a lady was advised to invest a large part of a legacy elsewhere, as it would earn more interest!). A Deed of Probate (or L/A) might equally be presented by the executor/administrator in person, in which case the procedures were similar, but did provide an opportunity if required for re-investment (with the Bank) of the funds involved. If the position arose where the executor/administrator was unknown to the Bank, a certified signature (with the same level of authenticity as a Statutory Declaration) was obtained on a Form MB33, enabling the branch to be satisfied as to the identity of the person attending. This form was also required from solicitors in similar circumstances.
 
There remains the anomaly of those cases in which a Will existed, but either the estate was small and there was no requirement for Probate of Will; or alternatively, the Probate Registry itself considered the amount of the estate did not warrant the formality and expense of an application for Probate, although technically it was necessary. At one time, the level at which the Registry preferred this to happen was 1,000, increased during the lifetime of the Bank to 5,000. (Apparently, it can currently be as high as 15,000). The Bank adapted its procedures to encompass both possibilities by centralising the process to Head Office, where a special statutory declaration was drawn up, stating that there was a Will (a copy of which was attached), but that it was not intended to "prove" it, i.e. submit it to the Probate Registry. If as sometimes happened, the Bank was dubious about the validity of a claim, it might nevertheless as a precautionary measure insist upon a Probate Registry application, which the Registry would undertake, even if a little reluctantly.
 
Just as unfortunately, though happily rarely, an amateur Will maker might utilise a Will as an opportunity to "settle old scores" and would give precise, even vitriolic, reasons why this or that person had been left out. It was doubly unfortunate if by so doing they then paid scant attention to the real purpose of the Will, and by being imprecise jeopardised the chances of those whom it was intended should benefit. Such examples served to emphasise the importance of either keeping a Will very simple, or better still, perhaps, seeking professional advice. It would be inappropriate, however, to wax anecdotal upon the subject of "deceased accounts", since to me they were always a cause for sadness, shared with the bereaved. Suffice it to say that everyone realised that those attending or corresponding with Birmingham Municipal Bank staff on such matters had every right to expect, and hopefully experienced, the highest standards of helpfulness and humanity.
 
 
 
The above article was written by Norman Worwood who had extensive experience in dealing with the accounts of deceased depositors at both branch and Head Office (Superintendent of Branches) level. He retired in 1984, at which time he was Assistant General Manager - Operations with TSB of Birmingham & The Midlands. He also contributed on the related subject of Nominations.
 
 
NOTES:
 
[1] The original (1919) regulations relating to the Accounts of Deceased Depositors are reproduced in the Regulations section of this website. The relevant sections are part of those Regulations'  General Rules:
    53: Proof of Death
    54: Deposits under One Hundred Pounds
    55: Estate, Succession, and Legacy Duties
    56: Settlement of Disputes
 
[2] The outflow of funds due to the transfer of the acounts of Deceased Depositors to rival organisations probably peaked in the 1950s  and early 1960s. This period, when the Bank's interest rates on deposits were uncompetitive, coincided with a time when many of the Bank's initial customers were reaching the age of 60-plus. The Bank's Annual Report commented on the amounts "lost" in these circumstances (although a proportion would have been kept within the Bank) in the following years:
    1951 - 1,480,000 was paid to the representatives of 4,372 deceased depositors
    1952 - 1,000,000+ (2,977)
    1953 - 870,000+ (2,723)
    1954 - 1,000,000+ (2,844)
    1955 - 1,649,425 (4,585)
    1956 - 1,769,549 (4,899)
    1957 - 1,819,406 (4,978)
    1958 - 1,688,545 (4,926)
    1959 - 1,821,933 (5,003)
    1960 - 1,879,882 (5,267)
    1961 - 1,890,725 (5,241)
    1962 - 1,870,143 (5,178)
 
[3] The images reproduced below illustrate three aspects of the procedure for dealing with the account of a Deceased Depositor:
    - the Deed of Probate (or L/A) is rubber stamped to show that the document has been registered in the books of the Bank;
    - the passbook is annotated "(Dec'd)" following the depositor's name;
    - entries made in the passbook for "Interest to Close", repayment of the account balance, and the passbook marked
                   "Account Closed".