In the normal course of events, banks can't throw too much of a monkey wrench into probate proceedings. Typically, only heirs can reject probate by declining or failing to submit a will or an intestate estate to the court. But exceptions do exist, and under some circumstances, a bank might be able to complicate probate, if not stop it entirely.
The task of initiating probate typically falls to a decedent's next of kin. If a will exists, and if it names an executor, the executor usually submits it to the court for probate and asks for official appointment. If there is no will, a family member can apply to the court to open an intestate probate proceeding. Probate is the legal process by which ownership of property passes from the decedent to his heirs. Without it, heirs can't sell any real estate, because a deceased individual still owns it. They can't refinance real estate or take any loans out against its equity. In most cases, they can't access bank, investment or retirement accounts unless these assets pass directly to named beneficiaries, thus avoiding probate.
A Bank as Named Executor
Testators -- the individuals who write and leave wills -- sometimes name banks as the executors of their estates. This might occur when an estate is extremely complicated and involves a lot of assets. A testator might believe a bank is more qualified to handle the intricacies of such an involved probate. Named executors do not have to serve if they don't want to. Most states have procedures in place by which an executor can decline the position, called "renouncing" it. If a testator names a bank as executor in his will, the bank can reject the nomination, although it can't reject the entire probate process. Probate would still happen. The court would just name an alternate executor instead.
When a Bank Is a Creditor
A bank would typically be involved in probate if the decedent owed the institution money. All states provide a specific window of time, usually a few months, during which the decedent's creditors can make claims for payment of his debts. A claim does not automatically mean a debt is paid. The executor is responsible for determining if a claim is valid. If the executor decides that a debt is not legitimate, she can deny the claim. Although it couldn't reject probate entirely, the bank might reject the executor's decision not to pay the debt owed. The creditor can then file a lawsuit in probate court to have a judge address the issue and potentially overrule the executor's decision.
A petition filed with the court to overturn the executor's decision regarding a claim would involve at least one court hearing. The executor must defend her decision, which typically involves hiring an attorney. The executor would not be personally responsible for paying these legal costs--payment would come out of the estate. These costs might drain the estate's resources, leaving less for the decedent's beneficiaries. An executor is a fiduciary who has a responsibility to the beneficiaries to always act in the best interests of the estate. Paying a debt that's not legitimate would violate the executor's fiduciary responsibilities. By the same token, if the cost of defending the lawsuit would be more than the amount of the bank's claim, the executor might confer with the beneficiaries and decide to pay it.