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Kasare
Kasare, Solicitor
Category: Law
Satisfied Customers: 1301
Experience:  Solicitor, 10 yrs plus experience in civil litigation, employment and family law
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My great aunt died, leaving money to my parents, giving my

Customer Question

My great aunt died, leaving money to my parents, giving my father power of attorney. over the estate. It was my great aunt's wish that money should be given to myself and my sister and our children.
My father wrote a cheque for £20,000 to my partner as I had some debt and didn't want to pay it into my account. We intended to open accounts for the children so that their money would not be spent. We used our half of the money to pay off the priority bills and my partner moved the children's money into the esavings section of her account while we looked into the best accounts for the children.
Last week the bank froze the esavings account, saying they were going to use it to pay off my partner's credit card. She has an arrangement tp pay with them and has kept up payments. They are saying that her financial circumstance has changed so they can take the money. When my partner told them it is not her money but was given for the children they insisted on seeing proof of that as a legal document. My aunt's will only states that my parents have the money, but she had requested verbally that my father give that amount to the children and grandchildren. How can we argue that the money is not for my partner's use and they should not take it? Is there a legal letter that we could write?
Submitted: 2 years ago.
Category: Law
Expert:  Kasare replied 2 years ago.
Hi thank you for your question, I will try to assist you with this.
I am afraid that the bank is well within its right to do what it has done, despite having an arrangement to pay her debt. There was nothing to identify this as your children's money and it is well written in banks terms and conditions that they can call a debt in at any time. This often happens if someone has an arrangement to pay a debt. The banks have a right to "set off"debts.
Most banks issue these small print warnings but note that they don't have to: ***** ***** have an automatic right to "set off" even without expressly telling their customers. Even if the rule isn't mentioned in the terms and conditions of your product it doesn't make any difference.
Banks also have the right to take the money from your account without letting you know. In fact, they often prefer to take action without prior notice to prevent the debtor from simply moving their money out of the account before the bank can touch it.
The only possible thing that you can do is make a formal complaint to the bank that they were incorrect to set off this debt with your children's inheritance. Point out to the bank that you have not defaulted on your agreement to pay the debt and that you have provided evidence from the executor of the estate confirming that the money was to benefit her great great nieces/nephews and that it was paid to your partner in order to be paid into savings accounts for the children. Ask them to reconsider their position.
If your complaint to the bank falls on deaf ears then you can complain to the Financial Ombudsmen Service (FOS). This is a free, independent service for banking complaints and the next step for those who feel that the right to set off has been used unfairly.
Although they cannot dispute a bank's right to set off, they can assess the situation and demand money back if they adjudicate that the bank was unfair.
They investigate the circumstances by looking at discussions between the customer and their bank during the period leading up to the set off to see whether the bank took appropriate action to make the customer aware that it was concerned about the unpaid debt.
The FOS has offered consumers compensation in the past when it found that banks had used the right to set off unfairly by failing to enter into a discussion about the debt payments and caused the customer distress.
Obviously this is not the best news, but this is the only possibility you have in the circumstances.
As a practical suggestion - not a legal one - (if your complaint is not upheld) you and your partner can open accounts for the children in any event and pay this money back into these accounts over a period of time. Given that she won't be paying the credit card debt and the excessive interest this could be a more sensible solution.
If you have any further questions, please ask.
Customer: replied 2 years ago.
The bank has said that they might put the money back if we can prove that it was intended for the children. Is there a legal letter that we, or my father, could write that would be valid?
Expert:  Kasare replied 2 years ago.
Hi Shane
I am afraid there is not in this instance.
How can you or rather your father write a legal letter? There is as you say no evidence that this was your aunt's wishes, other than your word, or rather the verbal wishes of your great aunt.
The only thing your father could write is that executor of the estate he distributing the estate in accordance with X (your great aunt)'s wishes - but if they ask for proof there is none. He could explain that £20k was given to you in respect of your - not your partner's - inheritance and £10k (?) for your children, hence why your partner moved this into her separate esavings account.
But essentially, if this does not assist then it is for your partner to make a formal complaint to the bank regarding their conduct.
Sorry this is probably not the answer you wanted to receive, but it is the only one that can be given in this instance.
Kas