It is legally permissible and, according to the Ombudsman’s observations, customary in the industry for bank powers of attorney to be validly issued beyond the death of the principal. Nevertheless, it is often the case that banks no longer honour such powers of attorney once they are aware of the account holder’s death. Upon the death of the account holder, all rights and obligations are legally transferred to the heirs. The banks want to make sure that the granted power of attorney is not abused to the detriment of the heirs and that they run the risk of being liable for damages because they did not recognise such an abuse. For this reason, they often require the submission of a certificate of inheritance and the consent of the heirs to the exercise of the power of attorney before they allow dispositions by its holder. The Ombudsman addressed this issue in his 2014 Annual Report on pages 15 and 16.

In the case at hand, the bank had knowledge of the account holder’s death, as the holder of the power of attorney had informed it of this, and honoured the power of attorney anyway. It told the heiress that it would only require the submission of a certificate of inheritance after a certain total amount of assets had been reached, which her grandmother’s assets had not. There is no legal obligation to obtain a certificate of inheritance. However, if the bank refrains from submitting one and it later turns out that it wrongly recognised a person as being entitled to dispose of the assets, it may be liable to pay damages to the heirs. This may be the case when honouring a power of attorney validly granted beyond death if the bank was aware of its misuse to the detriment of the heirs or should have been aware of it due to the circumstances.

In the case at hand, the deceased had lived with her partner for many years with a joint household. Her partner had also taken care of the deceased’s business after her death. Among other things, he had arranged for the certificate of inheritance to be issued in favour of the heiress and had prepared the deceased’s last tax return. The heiress stated that she had given her consent to this. She was finally able to see from the tax documents the amount of the credit balance in the balanced bank account.

The Ombudsman explained to the heiress that, according to his experience, it could be assumed that during the long-standing partnership and due to the joint household, there had in some respects been property interdependencies between the grandmother and her partner. For married couples, the law also provides that after the death of a spouse, a marital property settlement is to be carried out before an inheritance law dispute.

From the documents and the conversations with the heiress, the Ombudsman was able to ascertain that she wanted to settle with her grandmother’s partner about the transactions carried out in connection with the estate at a later date and that she had not yet approached him about balancing the bank account. On the basis of the information provided, the Ombudsman found no valid arguments that the bank should not have honoured the power of attorney, which was valid in itself. It was also not possible to assess whether and to what extent the heiress had suffered any damage as a result.

The Ombudsman therefore recommended that the heiress clarify the facts with the partner her grandmother as a first step. If it turned out that the partner had received assets to which she, as the sole heir, was entitled and that these could no longer be obtained from him, she would have to claim any damages from the bank. In the event that she did not receive a satisfactory response from the bank to a claim to this effect, the Ombudsman indicated that he would be willing to look into the matter again. As is assumed in the ombudsman procedure, in such a case the heiress would have to submit to the ombudsman the correspondence with the bank and explain, with appropriate explanations, which points in the bank’s reply she contests.