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Why is the bank telling me to get Letters Testamentary?

Dear Mr. Premack: My sister and I have a question about a bank account that belonged to our father, who died about two months ago. All of his accounts had our names on them except the largest account. The bank closed the smaller accounts when we presented his death certificate, gave us the money, but refused to do anything about the large account because they said it did not list any beneficiaries. We showed them his Will, but they told us to get Letters Testamentary from our lawyer. What is that, can you give us Letters Testamentary, and why did the bank refuse to give us the large account? – W.H.

The bank is trying to protect itself from liability. From their perspective, if they give the account funds to the wrong person, they would be liable for those funds when the right person arrives on the scene. The bank is protecting itself by insisting on proper legal procedures.

If the large account had included a beneficiary designation or had been “joint with right of survivorship”, the bank would have given those beneficiaries the funds because the account contract and the law release them from liability. That is why the released the funds in the other accounts. But for some reason your father kept the largest account in his name only, without beneficiaries or survivorship rights.

The bank’s request for “Letters Testamentary” is a request for formal court-based probate of your father’s Will. Wills are private during the testator’s lifetime. The testator can, while possessing proper legal capacity, amend or replace the Will with new instructions. After the testator dies, typically none of the financial institutions have ever seen the Will. As such, without other arrangements (like beneficiary designation or survivorship rights) they insist that a Judge rule in probate court that the Will being presented is truly the “Last Will” and has not been superseded by some later version. When the Judge rules that the Will is valid, the Judge must have proof from the witnesses or from testimony about the authenticity of the signature on the Will.

My role as lawyer is to represent the nominated Executor (administrator nominated in the Will) during the legal probate process. Your father’s Will can be presented to the court in two possible manners – the first results in Letters Testamentary and the second results in a court Order without Letters Testamentary.

If the bank insists on Letters Testamentary then in addition to proving the validity of the Will being presented, we must ask the Judge to confirm that the person nominated as Executor in the Will is legally qualified for the role. The nominee must be a Texas resident or submit to the court’s jurisdiction, must have capacity, must have no felony conviction, and must be found suitable for the job by the court. When the Judge is presented with proper evidence of the requisite facts, an Order admitting the Will and appointing the Executor will be signed. Then, after the Executor signs a notarized “Oath of Office” the court’s clerk can issue Letters Testamentary.

Alternatively, try asking the bank if it would accept “Probate of the Will as Muniment of Title.” This court-based process also proves to the Judge the validity of the Will, but also requires that there be no need for administrations (fundamentally that there are no unpaid debts and that the Will clearly identifies who is to receive the estate’s assets). There are no Letters Testamentary because the court finds there is no need for appointment of an Executor. Instead, there is a Court Order telling anyone in possession of the decedent’s assets to pay the assets to the people named in the Will.

Because probate is a court-based process, it takes some time. As the lawyer, I move as fast as possible and ask the court to schedule all procedures as quickly as possible. It is often possible to get Letters Testamentary about 4-6 weeks after the process started (and then there are additional statutorily required tasks like notice to creditors, notice to heirs, estate inventory, tax returns, settlement of claims, and final distribution of funds) to comply with the court’s Order. With Muniment of Title, it also takes 4-6 weeks after the process is started to get the court’s final Order authorizing distribution of the assets.

Paul Premack is a Certified Elder Law Attorney for Wills and Trusts, Probate, and Elder Law issues. He is licensed to practice law in Texas and Washington. To contact us, click here.

Column published on November 12, 2021

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