Next of Kin vs. Beneficiary Payable on Death when opening a new account at Ghana banks

The contents of a video on social media caught my attention a couple of weeks ago. The purpose of the video was to educate the public about the New Accounts Forms the bank presents to you when you open a new account.

A very important component is missing on the new forms; there is no provision for the customer to designate your Beneficiary who will gain access to your account after your death. Instead of the beneficiary column, the bank provides you with new accounts form with a column to name the Next of Kin.

The video invites customers to visit their banks to request the proper forms to enable them update their accounts to designate their Next of Kin.

There is no provision on the forms to name a beneficiary, which is a standard operating procedure when you open a new account based on my 42 years of working with financial institutions in the West. When I visited my banks to update my accounts information, I was shocked to learn that there are no forms that enable you to name your beneficiaries.

As instructed in the video message, l went to the banks ready with letters to provide pertinent information of my beneficiaries. I was surprised to learn that there were no such forms in Ghana banks. Before leaving in disappointment l pleaded with the bank officials l interacted with to place the letters I brought in my file while they sought clarification from the legal department at the Central Bank headquarters.

Several days later, an official text was sent to me from one of the banks l visited. The text was written by Ms. Sandra Thompson, the secretary of the Bank of Ghana as follows: Bank of Ghana: Notice to the Public dated August 27th, 2024.

The text message stresses the concept of the "Next of Kin" in bank operation, outlining its functions. In Ghana, there is no specific statutory definition of Next of Kin, but it generally refers to an account holder's closest living relative who could provide required information such as the whereabouts of a nonactive account holder who is unreachable within a certain period of time.

In my opinion, rather than providing information about next of kin, it should be information about a beneficiary.

The text message further indicated that the term next of kin in opening an account and other products and services is often misconstrued. And she reiterated that there is pervasive misconception that the person who is selected as the next of kin by the account holder automatically inherits the money in the account if the account holder dies.

Central Bank Should Modify method of Operation

This is what should not occur if the account holder passes on. Rather the Central Bank of Ghana must modify their method of operation that would be mutually beneficial to the banks and customers alike.

Based on the video's assertion, the culture of the banking institution and its purpose is not attainable by bereaved family members to get easy access to the money in the deceased's account. The new accounts form is missing a column to name a beneficiary. The next of kin can only gain access to the money after going through lengthy and expensive hoops.

Among the nightmarish and draconian scenarios are as follows: the next of kin must be named in a Will as a beneficiary of the account, and a court of competent jurisdiction has to grant Letters of Probate to enable the selected person in the Will as a beneficiary to obtain the deceased account holder's account.

Administrators of the estate of an intestate deceased can be appointed through Letters of Administration issued by a court of competent jurisdiction, which would grant access to the deceased’s money. But what happens when there is no known Will in existence?

I know that next of kin is generally used when you are admitted to the hospital for a surgical procedure, women delivering, short- and long-term hospital admission, applying for jobs in the military, police, fire service, first responders, pilots, among others.

The video underscores the moral implications of complicating matters for bereaved families. The west's efficient and simple method is preferable, because a beneficiary simply presents the Death Certificate, and a valid identification to claim the funds within the shortest period of time when an account holder passes. The beneficiary does not have to get legal representation to fight the banks to get the money in the deceased's account.

The existing rule in the banking system in Ghana is too tedious, time consuming and costly to bereaved families. According to the video, unnecessary bureaucratic hoops create further hardships, pain and suffering on the ordinary Ghanaian with limited resources to fight to gain access to the funds of their loved ones.

In certain instances, bereaved families out of frustration quit fighting the Banks thereby forfeiting their legitimate assets to the banks.

Simply put, the Central Bank of Ghana must modify the New Accounts Forms to make it easier for customers to name their beneficiary when they open an account at all banks in Ghana, as it is done in the West. This would eliminate the bureaucratic hurdles families have to overcome when their loved ones with bank accounts pass on. And it would further correct the misconception that most people have about the insensitivity of the banks in Ghana.

Thomas A. Djan

California, USA