Lloyds Bank is in hot water over an embarrassing failure to disclose the Wills of 9,000 deceased customers, a bungle which has – in a probate solicitor’s worst nightmare – led to hundreds of estates potentially being distributed incorrectly.

The Wills were stored as part of the bank’s now defunct “safe custody” service for Wills. In an attempt to seemingly downplay the error, Lloyds has said that the “vast majority” of estates concerned were unaffected, either because the stored Will had been superseded by a new document or because a duplicate had been successfully stored in another location.

The blunder highlights problems inherent in trusting very large organisations with the task of storing and safekeeping important documents; at the same time it was revealed that Lloyds had failed to properly file around 190,000 important legal documents belonging to its customers.

Lloyds commented that they were investigating each case individually and that, where appropriate, they would make contact with estate representatives. Lloyds apologised for the distress and inconvenience the error has caused and ensured anyone who had been affected that they would be fully compensated.”

However, it is not the first time that Lloyds’ filing processes have failed its customers; in 2017 it was one of three banks that came under fire for “disorganised” storage systems which resulted in some customers being unable to locate their files.

In fact, following the 2017 scandal, all high street banks, with the exception of Metro Bank, withdrew their safe deposit services. Curiously, Lloyds chose the same year to reintroduce a safe deposit box scheme, although it claims that it has stopped storing wills.

The fallout

The situation is extremely sad and distressing for those affected. In some cases, estates that have already been distributed will need to be re-administered. Not only will this result in families unexpectedly bracing themselves for new economic realities, many will also be made to again experience the processes of grief and probate.

Furthermore, the bungle could lead to a number of contentious probate claims being made – potentially against the validity of the new Wills – as well as professional negligence claims being made against Lloyds for the impact of the error.

Yes, Lloyds has said that it will fully compensate those affected, but it will have a hard time ensuring that it fully accounts for the personal, legal and tax implications of its mistake.

As it stands, the executors of the newly found Wills will need to apply to the Probate Registry to revoke the original Grant of Representation. Once, this has been done, any assets that have not been shared out among beneficiaries will need to be properly distributed.

It is also important to understand that Lloyds’ monetary compensation will have its limitations; in the case of incorrectly distributed sentimental items such as family heirlooms, those affected should instruct a probate solicitor to try to negotiate an amicable settlement – it is not an ideal situation, but is likely to be the least traumatic.

There seems to be little point in making probate claims against the original executors as they are not likely to have had any knowledge of the mistake by Lloyds and probably acted in good faith.

Making personal or proprietary claims for against wrongful beneficiaries is another option, but this course of action certainly has its limitations and is likely to come at considerable cost. Those affected should certainly consult a probate solicitor before proceeding any further.

A lesson learned?

A bank safety deposit box should never be the main method of Will storage. Not only might the Will be inaccessible to the executor prior to Grant of Probate being achieved but mistakes such as that made by Lloyds’ can result in trauma and confusion at just the time it is likely to prove most difficult to bear.

It is far better to instruct a reputable Wills solicitor who can then log it on their database, store it in a secure facility and, where appropriate, provide copies to the testator and their beneficiaries.

It is also advisable to ensure that a Will is officially registered. For example, it costs only £30 to register with the National Will Register, a scheme that already has details of seven million registered Wills and is endorsed by the Law Society.

If you are going to take the trouble to write a Will, you should make sure it is stored safely and then is easily accessible at the time when it is needed most.