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Banks in Spain criticised for charging fees for withdrawing inheritance money from a deceased person's account
Personal finance

Banks in Spain criticised for charging fees for withdrawing inheritance money from a deceased person's account

There is only one case where it is not considered malpractice for banks to receive remuneration, according to a leading consumer watchdog

Raquel Merino

Malaga

Wednesday, 12 June 2024, 11:03

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Spain's consumer watchdog has reported banks for charging fees to heirs for withdrawing inheritance money from the accounts of people who have died.

The Organisation of Consumers and Users (OCU) reported to the Bank of Spain (Banco de España) that some banks are improperly charging fees of between 80 and 100 euros plus IVA (Spain's sales tax) to heirs for receiving the inheritance of a deceased person. Specifically, the organisation refers to the procedure whereby relatives take the notarial deed to the bank to receive the money from the accounts of a deceased person, which until then had remained blocked, and thus pass to their legitimate heirs.

The Bank of Spain clarified that the study and verification of the testamentary documentation is "an internal activity of the institution itself which it carries out in its own interest and which therefore does not involve the provision of a banking service, and therefore it is not appropriate to charge fees". The Bank of Spain understands that, if this were not the case, it would be an imposition by the institutions that the heirs have no choice but to accept if they want to dispose of the funds to which they are legitimately entitled, "an imposition that goes against the principle of freedom of contract".

Other procedures where it is not appropriate to charge fees

In addition to this procedure, there are others for which the Bank of Spain does not consider it appropriate to charge fees, such as the so-called balance or position certificate, which is necessary for the settlement of inheritance and gift tax. This document on the deceased's assets lists all the products he or she had with balances, whether positive or negative, at the date of death. The OCU pointed out that under no circumstances can the banks charge for this certificate, indeed, they have to give a copy to any heir, accredited as such, who requests it.

In order to obtain the certificate of balances, the consumer organisation said some banks oblige heirs to sign a request for the processing of the probate file. The OCU reported that the Bank of Spain considers the study and verification of the documentation accrediting the status of heir and the amount inherited is something that the entity carries out in its own interest. Therefore, it can only charge the commission if the entity provides a real advisory service, such as that of an agency or legal advice.

Nor can commission be requested for the movements of the deceased person's accounts. Banks are obliged to report positions and movements after death at the request of the heirs free of charge, including movements carried out one year before death, according to the Bank of Spain.

There is only one case in which the bank could charge a fee: when information on past account activity is requested, beyond the period of one year after the death.

Probate proceedings

Once the probate proceedings have been resolved, the bank must make the deceased's account available to the heirs, who will decide how to withdraw the money, either in cash or by cheque or transfer to another account. The heirs can change the ownership of the existing account or open a new one, although, in the latter case, the bank can never force the relatives to create one in its institution if they do not want to.

The OCU is calling for the process of probate to be standardised in all banking institutions, creating a protocol with the steps to be followed: stages of the process, documentation to be submitted and, of course, the maximum time limit for handing over the assets or changing ownership, with the corresponding sanctions for banks in the event of non-compliance.

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