IBA Compliance Connection

Your go to source for compliance!

After one of our customers died last year, the executor directed us to distribute the customer’s accounts with appropriate documentation (a certified copy of the will and death certificate, as well as a small estate affidavit). Recently, another individual came into the bank with letters of office appointing the individual as administrator of the estate — from the same court in which the customer’s will naming the executor was filed. Which one takes precedence over the other? Have we transacted correctly?

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First, it is important to note that your institution is protected from liability when relying on a small estate affidavit. Because your institution distributed the customer’s accounts in reliance on the small estate affidavit presented by the executor, you are “fully protected and released” from any claims that may be made by the administrator regarding actions taken based on the small estate affidavit prior to receiving the administrator’s Letters of Office.

Having said that, the Letters of Office take precedence over the executor’s orders once they are presented to your institution. If you have any questions regarding the validity of the Letters of Office, we recommend contacting the court for further guidance.

For resources related to our guidance, please see:

  • Probate Act of 1975, 755 ILCS 5/25-1(d) (“Any person, corporation, or financial institution who acts in good faith reliance on a copy of a document purporting to be a small estate affidavit that is substantially in compliance with subsection (b) of this Section shall be fully protected and released upon payment, delivery, transfer, access or issuance pursuant to such a document . . . .”)
  • Probate Code, 755 ILCS 5/23-2 (“On petition of any interested person or on the court’s own motion, the court may remove a representative if: . . . (10) there is other good cause .”)