- ‘My effort to get my sister’s money failed, had to forget it’
- We need law mandating banks to provide account holders with POD forms -Lawyer
- Banks have policies on how to treat dead persons funds -NUBIFIE President
The death of a mother, father or relation can be emotionally wrenching. But more troubling is the impossible obstacles banks put on families’ way of reclaiming deceased relatives’ money. ISIOMA MADIKE, who has been following this trend, reports that the banks’ frustrating tactics have brought untold hardship to many and are sometimes discouraging the living to save with banks
Most Nigerians culturally shy away from discussing death and as such do not prepare their wills. However, when a person dies without a will, the question of inheritance gets complex. Luckily though, various aspects of Nigerian law have settled that with the next of kin issue. In essence, the next of kin is significant in ensuring that assets don’t stay unclaimed upon demise. Ironically, a lot of Nigerians believe that using their spouses or family members as their next of kin means that ownership is automatically transferred to them should they pass. But, that isn’t the case. Rather, the next of kin is a contact point the bank or any financial institution can reach out to in the case of inactivity. However, over the years Nigerian banks have been known to frustrate survivors of deceased account holders.
To access deceased funds in bank accounts, probate or letter of Administration is required. Probate will be required where a deceased died testate (leaving a will), while letter of administration is required where the deceased person died intestate (without a will). In any case, relatives of dead bank account holders do not find it easy re- covering the funds left by their deceased ones. It is more difficult for poor people. A school teacher in one of the government schools in Orile-Agege, La- gos, who identified himself simply as Oladele, narrated his ordeal to Saturday Telegraph. He lost his sister on August 2, 2021, and had problems trying to claim the over N600, 000 she had with a first generation bank. He said: “When I went to her bank- ers to claim the money she had in her account as her next of kin, they told me to produce a letter of administration before I could have access to it. I was directed to Lagos State Secretariat at Alausa, Ikeja, to seek for the document and was asked to pay a certain amount, which I paid.
“I took the receipt to the High Court in Ikeja so as to obtain the letter of Administration. When I got to the court, a file was opened for me and they said I needed to see some officials to sign the document, and they kept tossing me from one person to another. “In some instances they would tell me that the person to sign the document was not available. They kept telling me to check back. “As if that was not enough, any person you meet, he or she would demand money before they could even talk to you. This went on for over six months without success and I got frustrated. “Aside from that I was asked to produce some of my relatives as witnesses; at that point, I left and vowed never to go back on it again.
“My sister’s children are young and are in school. All I wanted to do was get the money and use it to assist them, but when that did not work out, I decided to shoulder the responsibility alone and God has been helping us ever since.” Esther Dike, who resides at Mile 12 area of Lagos State, had a similar experience. She lost her mother some time in 2020. Shortly after the demise of her mother, who was staying with until her death, she approached her mother’s bank to inform them that their customer, who happens to be her mother, had died. The bank empathised with her and asked her to put it into writing, which she did.
“Thereafter, I was told to approach a Lagos High Court to get a letter of Administration before my mother’s money could be released to me since there was no will. They told me this despite the bank’s confirmation that I was her next of kin. “It took the probate section of the court over nine months to issue the letter of Administration that would enable me to collect the money. And it took a very long process before I could procure the other necessary documents. “I was told it took that long because my mother did not leave a written will behind. Thank God I eventually got the money but that was not before I spent a chunk of it processing the documents and tipping officials,” Dike said.
For Adeniyi Fasheke, all he wanted after her father died was getting the burial done the best way. And because of the grief and his concern of what needed to be done, Fasheke forgot the fact that his father died without a will. His father, a teacher, was the old school type, who did not bother about bank apps, so he needed not worry about the Automated Machine Card (ATM), particularly in respect of his money. His banking transactions were only done with cheques and deposit slips. It was not until after his death that Fasheke realised that getting his father’s money from the banks was going to be tough.
He said: “Friends told me that my father’s bank accounts will remain part of the dormant account that banks will keep in their books if I don’t act fast.” There is also a story of Uchendu whose mother, Josephine Madu, died on June 20, 2019, just about seven months after she retired as a civil ser- vant from the Ministry Health. She had battled with Liver cancer. Unfortunately, her husband fell ill shortly after she died.
The man eventually died a couple of months later, while the grieving fam- ily was yet to get over their first loss. The death of both parents, months apart, dealt a devastating blow to the children, especially the eldest, Uchendu, as he became saddled with the huge task of shouldering his siblings’ responsibilities. The 29-year-old fashion designer lamented that the demise of his parents marked the beginning of a trying journey for them.
“Our predicament worsened by the fact that I was denied access to my mother’s savings in a bank. The money would have gone a long way to improving our living conditions. The money which was domiciled in a second generation bank was inaccessible more than four years plus after my mother’s death for reasons I was yet to fully understand,” he said. The stories above capture the ugly experiences of many Nigerians, who are made to go through untold hardships trying to access the funds in the accounts of their dead loved ones. This trend of unclaimed funds in commercial banks was projected to rise above the speculated N1.3 trillion as at 2023, according to reports. This may have triggered suggestions that a law should be made to mandate banks to provide Pay On Death (POD) form to every account holder.
A Benin, Edo State based lawyer, Emmanuel Nwaghodoh, is of the opinion that the Central Bank of Nigeria should ensure that commercial banks mandatorily ask account holders to fill the POD forms as a condition for opening of an account. This, he said, would enable banks to transfer funds in such accounts to beneficiaries before or when such accounts go dormant and in turn mitigate the hardship, which beneficiaries usually face in procuring the obligatory letters of Administration. Nwaghodoh, nonetheless, explained that being a next of kin does not automatically translate to an outright access to the money of a deceased in a designated account. This is why, according to him, the next of kins or intended beneficiaries struggle, most times, without success to access the money in a deceased account, thereby negating the intentions of the deceased.
He said: “Being a next of kin does not confer a legal right to acquire property or to have access to property or assets, money in an account, pension, and all of that. Legally, only the owner has legal access to the funds, even after death. “A court must grant someone else the power to withdraw money and close the account. The bank will need to be contacted by a relative of the deceased person.
“After contact has been established, the bank will request a letter of Administration and then proceed to restrict outflows. The funds in the account are then transferred to the estate of the deceased person. Any money that remains is distributed to the spouse and children. “If someone dies without leaving a will, trust, or joint account holders, and they have no survivors or beneficiaries, their estate’s funds end up in the hands of the state. This is why estate planning is so important—even if one is in good health. “Unfortunately, these options are not popular because of the known bureaucracy in applying for a letter of Administration or probate under the extant laws of various states. To avoid this difficulty, I would recommend that the PODs should be mandated and legalised in Nigeria.
“The PODs allow an account holder to designate a beneficiary who shall be entitled to the money from the deceased’s account upon presentation of a death certificate of the latter and a valid ID card of the former. This is faster and less bureaucratic. I am aware that PODs are permitted in some commercial banks in Nigeria but they are usually discreet and most customers are not aware of it. “There is also a situation where a person is named in the deceased’s will as beneficiary of the funds. In that case, after the will has been read, the named Executor of the will would apply for probate at the court. With probate granted, the beneficiary of the funds under the will can access the funds.”
President, National Union of Banks Insurance and Financial Institutions Employee (NUBIFIE), Comrade Anthony Abakpa, mni, in his contribution, told Saturday Telegraph that all money deposited in banks are backed by law, regulatory and compliance under CBN. To him, no bank can take undue advantage of any deceased family knowing full well the consequences that may arise therefrom. “Also, each bank management has policies through CBN on how to treat deceased accounts. So, with this policy in place, money cannot be trapped except if it’s not the rightful person (next of kin) that is making such claims.
“When any bank tries to be funny on this, beneficiaries have the right to approach the law court for possible recovery by the legitimate next of kin. “The beneficiaries can equally engage in dialogue for possible resolution to avoid unnecessary bureaucratic bottlenecks. But if that fails, they have the right, like I said earlier, to approach law court to seek redress because the banks have no reason or right to withhold deceased money in whatever guise after due diligence.
“The option for banks is to ensure strict compliance with the law that governs the deceased’s accounts. Through education and sensitisation, they should also be open and inform their customers to update their bank information regularly, especially on the area of next of kin details and PODs in case of any eventualities. This should be done periodically or yearly; that will be fine.”
Abakpa also said in addition, the Money Deposit Banks are mandated to know who the rightful next of kins are before they proceed to process all evidence documents as required by law: death certificate and letter of Administration, for instance, and before an estate account can be opened for the next of kin. In its updated site, the KEYSTONE LAW GROUP PLC (KLG), probate attorneys, shed more light on the issue of deceased funds in the bank, especially as it concerns the probate. It stated that when a person dies, there are a lot of loose ends that will need to be tied up. One of those loose ends, according to it, is closing the deceased person’s bank accounts (e.g., checking accounts, savings accounts, retirement accounts). The complexity of this process, it further stated, will depend on a range of factors, including the nature of the account, for instance, is it a pay-on-death bank account? Is it a joint account?), and whether or not you’ve been granted the legal authority to manage the account, among other things.
It added: “While getting access to a deceased person’s bank account can be straightforward (especially if there is a joint account owner or if the deceased account owner had designated a pay-upon-death beneficiary), we rec- ommend working closely with a probate attorney following a loved one’s death as a precaution to ensure your beneficiary rights are upheld during the administration process and to promptly resolve any probate disputes that may arise.
“Some bank accounts will have beneficiaries, while others won’t. “It’s important to remember that while most checking and savings accounts can be transfer-on-death or payon-death bank accounts (which make withdrawing money from the bank account after death immediately possible for the beneficiary designated on the account), it is generally not required for account owners to name a beneficiary, nor are account holders necessarily aware of their right to do so.
“Probate is a court-supervised process used to authenticate a decedent’s will, appoint an executor or administrator of the estate, locate and value estate assets, pay the deceased’s creditors and distribute their assets to beneficiaries, among other things. “While probate does have its benefits, it can be challenging to navigate, expensive, time-consuming and difficult for the deceased’s loved ones, who often are still grieving their loss when the probate process begins. Another downside to probate is that it can delay when beneficiaries and/or heirs receive their inheritances. “As a result of these pitfalls, many people attempt to avoid probate through various means, including by executing trusts, utilising expedited probate proceedings (e.g., small estate affidavits, spousal property petitions), and designating beneficiaries on transfer-on-death and payable-on-death assets, such as bank accounts, life insurance policies, retirement accounts, and annuities.
“When it comes to bank accounts, it is an unfortunate reality that banks often fail to inform account holders of their right to designate a beneficiary on the account. If this is the case and the account wasn’t owned jointly with someone else, it’s highly likely that the account will become a part of the deceased’s estate, resulting in it having to pass through probate. “The account will also fall under the authority of the executor or administrator, who can use its funds to pay valid creditor claims before distributing the remaining assets to the beneficiaries and/or heirs, who are supposed to inherit them.” (New Telegraph)
