By Michael Apalbilah B.Y &Alhassan Abdul WAHID
The loss of a loved one takes an immense toll on family and friends. Beyond the grief, is the burden of the administration of the estate of the deceased which tends to be challenging and frustrating for the administrators, executors and beneficiaries of the estate.
This article examines some of the practical challenges posed by the current legal regime in Ghana for persons with interest in the estate of the deceased. Some recommendations will also be made which, though aimed at easing the process, will maintain the integrity of the process.
| About 70% to 90% of people in Africa die intestate that is without making a Will. |
About 70% to 90% of people in Africa die intestate; that is without making a Will. The remaining 10% -20% prepare Wills before they die and are said to have died testate.
Under Ghanaian law, where a person dies testate, the named executors in the Will have to apply to the Court for the grant of Probate in order to administer the estate of the deceased.[1] On the other hand, where the deceased died intestate, Letters of Administration (LA) will have to be obtained in order for the estate of the deceased to be administered in accordance with law.[2]
A third scenario may arise where the executors die before the maker of the Will and they are not replaced by the Will maker, or the executors upon the death of the maker of the Will, renounce probate, which will call for Letters of Administration to be obtained with the Will annexed.
In such a situation, the same procedure used for the grant of probate will be applied only that, this time, the applicants will be administrators and not executors.[3]
It is noteworthy that it is only after Probate has been obtained or Letters of Administration or Letters of Administration with Will annexed have been granted by the Court, that the estate of the deceased may be administered.
Challenges with accessing the Bank Accounts of an Intestate
Accessing the bank accounts of an intestate is usually fraught with many challenges among which are:
- Determining the bank accounts of the intestate.
At times, the bank accounts of the deceased are not readily known, and it is a herculean task to determine which banks hold money of an intestate especially when there are currently 23 Commercial banks, 26 Savings & Loans Companies and 147 Rural & Community Banks in Ghana [4].
- Accessing the funds in the bank accounts identified or determined.
Legal, regulatory and procedural factors account for some challenges in accessing the funds in the bank accounts of the deceased some of which are discussed below:
Notification of the Bank(s):
The bank(s) of the deceased must be notified about the death and the bank(s) will typically freeze the account(s) to prevent any unauthorized access.
The Submission of Required Documents to the Bank:
After the grant of Probate, Letters of Administration or Letters of Administration with Will annexed, the executors/ administrators may be asked to furnish the banks with the following documents:
- The Death Certificate of the deceased.
- The Original and copies of the Probate or Letters of Administration obtained from the High, Circuit or District Court.
- Valid identification documents of the executors/administrators.
- Bank account details of the deceased.
- Any other specific forms or affidavits required by the bank.
Bank Verification of Documents:
The bank will usually review the submitted documents to verify their authenticity and ensure that all legal and internal bank requirements are met. The bank will also ascertain whether the deceased is indebted to the bank before the funds-release process can be initiated.
Access and Transfer of Funds:
When the documents submitted are verified, and all outstandings on the account are cleared, the bank will grant the executors or administrators access to the funds in the account.
The executors or administrators can then apply for the transfer of the funds to an estate account for proper distribution to beneficiaries according to the Will of the deceased or in accordance with the laws of intestate succession in Ghana.
Bank-Specific Requirements:
While the general process remains the same, some banks may have additional forms, fees, or procedures. It is always advisable to contact the specific bank directly for detailed requirements and guidelines. For instance, some banks require that all executors or administrators be present before the funds are transferred and most banks would prefer to issue a cheque, bankers’ draft or a bank transfer to paying cash.
Beneficiaries v Next of Kin
As part of their onboarding procedure, many banks require prospective account holders to provide the details of a Next-of-Kin to act as a contact person in the event of the account holder’s death or incapacitation.
Some account holders erroneously believe that their stated Next of Kin is the beneficiary of the proceeds of their accounts and so they either provide the details of their children, or some other relatives or persons who may be far removed from their day to day lives.
The Bank of Ghana in a bid to dispel this misconception issued Notice No.BG/GOV/SEC/2024/22 on “Next-of-Kin” (the “Notice”). The Notice explained the legal position of a Next-of-Kin in the event of the death of the account holder and encouraged account holders to ensure that their Next-of -Kin is of legal age and capable of providing relevant information when the need arises.
The Notice also clarified that the Next of Kin does not automatically inherit the funds in the account of the deceased.
Paying Tax on The Unknown
Apart from legal and administrative fees payable, the estate of the deceased is required to pay to the Republic three percent (3%) of the value of the estate as tax or estate duty[5]. Practical problems arise because the amount of money in the deceased’s bank account is usually not known (as this information is not disclosed by the banks) at the time of the application to the Court for the grant of Probate or Letters of Administration (LA).
To curtail this problem, some courts order the banks listed in the application for the grant of LA or Probate to furnish the Court with the balances standing in the bank account of the deceased so that the actual value of the estate is ascertained for tax purposes.
While this may seem a proactive solution, it contributes to the delay in the estate administration process. Each bank will have to conduct its due diligence on the account of the deceased before the bank provides the Court with the information requested. Also, caution must be exercised so that the balances filed by the banks in the Court are brought to the attention of the judge.
Notwithstanding the setbacks identified with this approach, its adoption by all courts in Ghana will be extremely helpful and it will be needless for executors and administrators to guess balances in the bank accounts of the deceased which will warrant the subsequent filing of affidavits to enhance the value of the estate.
Spending money to get money
An estate which comprises an impressive portfolio of high value assets will be accompanied by a corresponding high estate tax payable. At times applicants are stranded when they are unable to raise funds to pay the estate tax.
For instance, in applications for the grant of Probate where the named executors are not beneficiaries in the Will, there is no incentive for them to raise funds for the payment of the estate tax. The beneficiaries are tasked with this onerous responsibility, and they may have to rely on loan sharks or wealthy individuals to pre- finance the estate tax at a fee.
What About Unknown Bank Accounts?
| Prior to 2021, unclaimed monies standing to the account of a deceased person were handled according to the internal policies of the bank. |
What happens to accounts that may not be known to the administrators of an intestate? Prior to 2021, unclaimed monies standing to the account of a deceased person were handled according to the internal policies of the bank. These accounts could be subject to the levies and charges on the account, transferred to a suspense account or retained until such a time that the account will be affected by a regulatory action or an act by a beneficiary.
The Unclaimed Balances and Dormant Accounts Directive
In 2021, the Bank of Ghana, established guidelines for the management of dormant accounts and unclaimed funds held by banks and specialized deposit-taking institutions. Under these directives an account is deemed dormant if there is no customer-initiated activity for two years and banks are required to maintain a register of all Dormant Accounts.
Banks are also required to notify account holders before their accounts are declared dormant, ensure proper communication for account reactivation, and publish dormant accounts that remain inactive for three years in national newspapers.
Unclaimed funds in these bank accounts after the publication should be transferred to the Bank of Ghana, where account holders or their representatives can subsequently claim without interest.
The directive also outlines penalties for non-compliance and emphasizes the protection of customers’ funds while establishing clear procedures for reclaiming dormant account funds.
What About Digital Money?
Given the widespread use of mobile and electronic money in Ghana, the Bank of Ghana issued similar guidelines to regulate dormant electronic money accounts and unclaimed funds in 2022. Examples of mobile and electronic money include MTN Mobile Money, Telecel Cash, AT Cash, Cryptocurrencies etc.
These regulations are::
- A period of twelve (12) consecutive months of inactivity renders an electronic money account dormant.
- Service providers licensed or authorized[6] to issue electronic money are required to:
- contact the account holder not less than one month before the account is designated as dormant,
- provide and maintain a register of all unclaimed funds until such a time that the funds have been claimed by the dormant electronic account holder or their legal representatives.
- In the event the Service Providers are unable to contact the account holder, they may contact the Next-of-Kin or other person designated by the account holder without disclosing the electronic account balance(s).
Recommendations:
Although the processes currently in place are meant to prevent or reduce fraud, they are quite cumbersome and expose the grieving family to further physical, emotional and financial burden. In order to ease the estate administration process without sacrificing its integrity, the following are recommended:
- The National Identification Authority, the Births and Deaths Registry, Ghana Association of Bankers, banks/financial institutions should collaborate and work towards developing a centralized digital system where applicants for LA/Probate are able to conduct a search to determine the bank accounts held by a deceased person. As discussed above, it is a challenge to determine the specific banks deceased persons held accounts in their lifetime. Measures such as the use of secure platforms, requirement for the production of specific identification documents (e.g., death certificates, proof of identity, and relationship to the deceased) may be used to prevent abuse of such a platform.
- The Judiciary and the Ghana Bar Association, in partnership with banks and financial institutions, should establish guidelines to simplify the process for executors or administrators to verify the accounts and account balances of deceased persons. This will help to reduce the difficulties and stress associated with accessing such funds.
- The rules of court should make it possible for beneficiaries who are unable to pay the estate tax upfront to have the estate tax deducted from the estate. By so doing, the beneficiaries who may be pinching pennies will be relieved of the onerous burden of raising funds to pay the estate tax. This service could come at an extra fee.
- The policy of non-payment of interest by the Bank of Ghana when funds are re-claimed should be re-considered especially for funds held in local currency. Given the very unstable nature of the local currency, the funds should be put into an interest yielding account so that in the event they are re-claimed, there is at least no loss in value.
- The challenges discussed above are more pervasive when the deceased died intestate. For varied reasons, Africans are averse to making wills. Whatever the reasons may be, it is highly recommended that people make wills in order to control the distribution of their assets and protect their loved ones after their demise.
Conclusion
As Cicero famously said in his book “De Legibus”; “the welfare of the people is the highest law”. This underpins the fact that law was made to benefit rather than burden man. Accordingly, law must be used as a tool to promote the advancement of society and not to thwart it.
While he walked this earth, he hid his chest,
For reasons he alone knew best.
But wherever he rests in realms above,
He’d wish his treasures found by love—
By those who knew his heart’s true quest,
Not locked away in a bank’s dark chest.
_______________________________________________________________
Michael Apalbilah B.Y is a lawyer at AB & David Africa specializing in the areas of Public Sector Advisory & Government Business, Dispute Resolution and Africa Trade.
Michael holds a DALF C1 certification from the Centre International D’Études Pédagogiques in France.
Alhassan Abdul Wahid is a lawyer at AB & David Africa specializing in Natural resources and Extractive Industry, Dispute Resolution and Corporate practice.
[1] Order 66 Rule 12 of the High Court Rules (Civil Procedure) Rules, 2004 (CI 47) provides the order of priority for grant where the deceased left a will.
[2] Order 66 Rule 13 of CI 47 provides the order of priority of grant where the deceased died intestate.
[3] In Re Duncan (Decd); Duncan v Duncan (1982-1983) GLR 384
[4] https://www.bog.gov.gh/supervision-regulation/all-institutions/
[5] Civil Proceedings (Fees and Allowances) (Amendment) Rules, 2014.
[6] Under the Payment Systems and Services Act, 2019 (Act 987)
