THE True Story….

Mark and Erik, Co-Execuors of their mother’s estate, shifted nervously in the uncomfortable chairs they were sitting in, facing the banker’s desk. It was the typical uninspired corporate furniture – cheap and scratchy. Mark and Erik were frustrated. They  were short on time: they had client meetings to make, errands to run, and they had already been waiting for thirty minutes at this bank alone. All they needed to do was to open an estate account to access their mother’s funds to pay her bills, rapidly mounting after she died a few months ago. 

One day ago, 

Mark and Erik had been installed as Co-Executors by court Order after waiting weeks for the probate hearing, despite the fact that they wasted no time opening probate. Immediately after the hearing, they had obtained certified copies of the Letters Testamentary and a certified copy of the court Order issued from the probate judge. They went straight to the bank to open the estate account. 

The banker frowned as he examined the documents with all the bedside manner of Annie Wilkes, Kathy Bates’ character from the movie Misery. He threw the papers back at them as if they were contaminated and proclaimed “these attorneys don’t know what they’re doing. Co-Executorship is contrary to California law!” 

Wait, what?! 

It was like a punch to the face. Mark and Erik exchanged a glance and a heavy sigh. They sat there uncomfortably, feeling like reprimanded school children, not knowing how to respond. In their hands they held a court Order issued by a respected judge, prepared by their probate attorney with decades of experience. How can this be? Feeling angry and defeated, they retrieved their documents and walked out. This was bank number three – strikeout.

Attorney to the rescue – or so they thought.

They called their attorney right away, “well, what do we do now?” they asked. Their attorney, sort of expecting this call after hearing rumors in the trust and estate community, said “well, let me see what I can do.” She immediately reached out to her network, accessing relationships developed over decades. To the attorneys in this firm, they already knew that conditions were rapidly deteriorating in the banking world when it comes to trusts and estates. She wanted to dig into this issue for two reasons. First, her clients needed the account opened as soon as possible; and second, this has never happened to them personally before. 

What’s going on?

After much digging, the attorney got at least one answer from her network. As everyone knows, with co-executors, the signatures of both executors are required. This is nothing new; however, apparently check processing has become almost entirely automated, and with automation, it is difficult to enforce a “two signature” requirement. 

Banks are apparently still “ok” with a joint account or even trust account with co-trustees because “each signer can act alone”. (This is actually not true; many trusts require signatures of all trustees and do not allow independent acts. And, under California Probate Code §15620, the default rule requires unanimous action if the trust is silent on the matter). 

So that’s it? 

Banks are refusing to honor valid court Orders because of a lack of convenience? Interesting turn of events. It’s one thing for a banker without a law degree to take a shot at an attorney they don’t know, but what about the fact that the banker took direct aim at a sitting Probate Judge. 

Does the Honorable Judge not know what she’s doing? Did she act in contravention of California law when she issued an Order for Probate and Letters of Administration installing co-executors? 

To ask is to answer.

The view from the bench and bar is that, in clumsily attempting to combat fraud and forgery, banks are misinterpreting the law (or maybe inventing their own version) and spreading and acting on bad information. 

Either way, this giant mess is gathering velocity and will at some point boil over. 

In the meantime, there is one way to sidestep the disaster. The Digital Assent Registry and Clearinghouse by illuminote platform (DARCi Registry) offers an easy solution for independent verification and administration of trusts. Through the DARCi look-up system, financial institutions can verify signing authority and document authenticity without wasting weeks or even months, getting successor trustees, agents, or executors on accounts.   

Banking is digital, legal documents are not.

This growing discrepancy between the evolution of digital banking practices and old-fashion paper legal documents has led to the current bottlenecks and delays in trust and estate administration. Legislators will take years to address the problems, so it will fall to the private sector, and emerging legal-tech solutions like the DARCi Registry to solve these issues by streamlining verification processes and mitigating such challenges in the future.

The article was written by Ann Eberts, Esquire –  illuminote