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Do I need to check the source of funds when acting on a probate matter?
I’m a trainee solicitor acting on a probate matter. The deceased has money in savings accounts with two different UK banks. Do I have to carry out source of funds checks?
The administration of estates is a regulated activity for anti-money laundering (AML) purposes.
A deceased person’s estate is very unlikely to be actively used by criminals as a means for laundering their funds. However, there’s still a low risk of money laundering for those working in this area.
When you’re acting for executors, there’s no blanket requirement that you should be satisfied about the history of all the funds that make up the estate under administration.
However, you should be aware of the factors than can increase money laundering risks. For example:
- where estate assets have been earned in a foreign jurisdiction, be aware of the wide definition of ‘criminal conduct’ in the Proceeds of Crime Act 2002 and the provisions relating to overseas criminal conduct
- where estate assets have been earned or are located in a suspect territory, you may need to make further checks about the source of those funds
You should be alert from the outset and monitor the matter throughout so that any disclosure can be considered as soon as knowledge or suspicion is formed.
An example of how an estate may include criminal property is where you know or suspect that the deceased improperly claimed welfare benefits during their lifetime. If so, criminal property will be included in the estate and a money laundering disclosure may be required.
For more information, see chapter 12 of the anti-money laundering guidance for the legal sector and the Wills and Inheritance Protocol.
While every effort has been made to ensure the accuracy of the information in this article, it does not constitute legal advice and cannot be relied upon as such. The Law Society does not accept any responsibility for liabilities arising as a result of reliance upon the information given.
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