Can bank manager stop sisters withdrawing money for funeral?

Confused Brendan asks Rod Cunich for clarification on bank’s funeral costs knockback.

Can bank manager stop sisters withdrawing money for funeral?

Brendan* is confused and upset. A bank manager has stopped his wife and her sister, enduring powers of attorney for their mother, from withdrawing money for her funeral. He asks estate planning lawyer Rod Cunich for clarification.


Q. Brendan

My wife and her sister held enduring power of attorney for their mother. Shortly before their mother's recent death, they attempted to withdraw funds from her bank account to pay for her funeral, knowing that their power of attorney would expire on their mother's death. One daughter had been operating this account for a number of years. The bank manager refused point blank to permit the withdrawal, referring vaguely to “the law”.

The manager said that she would make payment of funeral expenses on presentation of the funeral director’s account, after the event. To pay, in advance, for catering for the memorial function after the funeral, the manager required a written quote for the function.

My understanding is that while their mother was alive, the powers of attorney had full and unrestricted legal authority to operate her bank accounts.

I further understand that, on their mother’s death, all assets of the estate would be frozen by law, and held in trust by the executor, pending grant of probate, and distribution by the executor, in accordance with the will.

My questions are:

1. What law gives a bank manager the right to interpose him/herself between their mother’s funds and their powers of enduring attorney, and limit their access to funds?

A. The short answer is none, unless the power of attorney is defective, or the mother has lost mental capacity and the power of attorney is not an ‘enduring’ power of attorney. Only an enduring power will continue to operate once the mother loses mental capacity.

2. In particular, what law gives a bank manager the authority to withdraw funds from a deceased estate while it is in the sole custody of the executor?

A. None.

3. What actions do you recommend to permit powers of attorney to fulfil their responsibilities unhindered by third parties? This has been an unpleasant, confusing and distressing event, in a situation in which the parties had previously gone to the trouble and expense of setting up powers of attorney, in the clear understanding that this sort of debacle would not occur. If the law is as claimed by the bank manager, this should be waved around like a stinking fish, so as to warn others who might be planning responsibly to act, or who are in fact currently acting, for aged parents.

A. Have a lawyer write a letter to the bank demanding it comply with the power of attorney. The first step is to engage a lawyer who will advise whether there is a problem with the power of attorney. Once their mother passes, the executor has the sole power to gather in assets (including bank accounts) and pay expenses. By statute, funeral expenses enjoy priority over other debts and are paid once probate is granted. An executor has an obligation to pay the funeral expenses if there is money in the estate. Funeral directors commonly wait for probate to be granted before requiring payment of funeral expenses.

* Not his real name.

Rod Cunich is a lawyer and author with more than 30 years’ experience who specialises in estate planning. If you have a question for Rod, simply email it to His book, Understanding Wills and Estate Planning, has recently been updated and is available from all good bookshops.

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    9th Oct 2019
    This story is a bit odd to me. When I got Power of attorney for my Mum's account, the bank manager said the oddist thing to me , and I still remember his exact words to me to this day, he said "Now you can close the account if you want to". I think he was telling me how much power I had over the account.
    In fact my father did exactly that for my grandmother. he got angry with the bank, closed her account and took all of her money to another bank. They couldn't stop him. he could have taken the money out in cash or anything.
    So this story just doesn't make sense to me.
    Horace Cope
    9th Oct 2019
    The bank manager is wrong. A Power of Attorney gives the holder the exact same power as the person who gave the Power of Attorney. The bank manager may have confused the rule of release of monies following death for those accounts where there are no other account holders nor any Power of Attorney. On death, a bank account is frozen and no funds can be withdrawn until Probate is issued with two exceptions. Any tax payable by the deceased can be withdrawn and on presentation of an account from a funeral director, a cheque will be issued to pay for the funeral.
    9th Oct 2019
    This seems very odd and I would for sure be seeking Legal advice.
    I had Power of Attorney for my mum and we never had any problems with
    the bank, even after she passed - mind you she did have Funeral Insurance but other monies were needed and the Bank complied no problems.
    9th Oct 2019
    When my mother passed, I had no difficulty with the bank issuing a cheque to the funeral director, and we could pay in time to receive a discount. We didn’t try to get money for the wake though.
    Golden Oldie
    9th Oct 2019
    I also have a few problems with this advice. I was de-facto partner, 22 years ago when my partner died, I did not have power of attorney, but fully supported him as he was retired and I was still working. I had to borrow money from my Credit Union to pay for the funeral as the funeral people demanded payment immediately and probate happened about 3 months later. The money from his superannuation account was not released promptly enough to pay for the funeral.
    9th Oct 2019
    Usually the funeral expenses can be paid for when the account is received, never heard of waiting for probate, that will take months to come through.

    POA does allow you to basically be the bank account owner, withdraw, reinvest in another account or close the account.

    Bank managers are not some magical people who know it all, although they should know about allowing withdrawals with a POA. In most banks now they are more a figurehead, they don't have the authority they use to have or the experience of many years in the bank. In the case mentioned the people should have taken the matter further, insisted on the manager contacting his manager to ensure the facts were correct.

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