One of the most difficult tasks for family members when a loved one dies is sorting through the estate. Despite the natural upset involved in such a duty, serious and sometimes costly decisions must be made in a clear-headed manner.

Such situations may be complicated by legal requirements related to winding up an estate.

A Family Money reader, resident in Britain, encountered such problems after his mother passed away recently.

The deceased's solicitor suggested he contacted the Bank of Ireland to release some of her savings to pay certain outstanding bills while her estate was being wound up. His subsequent experience has led him to believe that banks here are insensitive to relations of recently deceased customers.

"As I was the sole executor, the bank agreed to release some of her savings, but several weeks later, I was informed that I was to be charged 11.5 per cent interest on the amount requested. Naturally, I cancelled this arrangement at the earliest opportunity - particularly as she had only received about 1.5 per cent interest for the same money," he writes.

Our reader wonders if this is the general practice in Irish banking or is it something peculiar to the Bank of Ireland? "It strikes me as being a very mean-spirited farewell to loyal customers," he says.

A spokesman for Bank of Ireland says the institution is just complying with the law of the land. Before funds are released to an executor they must obtain a Grant of Probate from the courts, which authorises them to collect the deceased's assets and carry out the wishes expressed in the will.

In many cases, the executor of a will is also the main beneficiary. However, "Where someone dies and there is a sole executor there may also be other beneficiaries with a claim on the estate," says the spokesman.

These rights of claim are handled by the courts during the probate period. The process takes time and, while the legal issues are being sorted out, it is standard practice for banks to provide an overdraft on the customer's account at the normal rate. These funds are often used for funeral expenses.

An executor is entitled to claim from the estate expenses incurred while administering the will.

Bank of Ireland also says a certificate of exemption is required from the Revenue Commissioners. This document states that the deceased person has no tax liability to the State.

Bank of Ireland regrets any misunderstanding with the customer and says it is sympathetic to those winding up a customer's estate.

The spokesman says: "It should have been made clear by the bank that the funds are frozen until the estate is wound up."

The bank says an overdraft is the only vehicle for funding immediate expenses unless the executor uses his own monies.

Bank of Ireland increased its overdraft rate last week.