In the case of theft involving taking money from a bank account, does
the person whose account the money comes from loose good title to that
money, or the debt it represents, or anything? Does the bank? Does the
entity the thief gives it to?
From this it seems the victim has lost title to the money.
This seemingly plausible question is actually basically a form of category error that doesn't have a well defined answer and is basically non-sensical, because it relies on an inapplicable theoretical framework for understanding what is going on legally in these transactions and crimes.
To give a more obvious example of a category error like that, it is sort of like asking if the net worth of a sheep changes if it crosses a county line.
Title to currency and currently circulating kinds of coins is solely in the possessor of them, unlike all other kinds of tangible personal property. It is a special and more or less unique exception to the rule that a thief can't transfer good title to tangible personal property. In the case of title to physical currency, possession isn't just 90% of the law, it is 100% of the law.
Money in a bank account, while considered "property" for many purposes, is really a contractual right of the bank account owner against the bank. It is an "obligation" of the bank that is owed to the bank account owner, as distinct from "property" in the sense of real estate and tangible personal property.
One of the most common implications of this fact is that bank account balances are seized with a "writ of garnishment" which is a court order directing someone who owes a debt to a debtor to instead repay that debt to a judgment creditor of the debtor, rather than a "writ of execution" which is a court order directing a government official to seize tangible property belonging to a debtor for the benefit of a judgment creditor of the debtor.
When funds are transferred from one account to another, the intangible obligation rights that are assigned by doing so aren't a "thing" to which one has title. One has one's name on one bank account or another, which could be called title to that bank account. But one doesn't have title to a particular balance that is inside that bank account. You just have title to the account and whatever happens to be in it at the time.
So, if funds are withdrawn from a bank account in an act of theft, those funds aren't something to which title attaches. So, the owner of the bank account from which the funds are taken can't just argue that he has superior title to the funds relative to the thief and to everyone who claims a right to those funds through the thief, in the way that the owner of stolen tangible personal property, like jewelry, could.
Instead, the rights of people to funds improperly taken from a bank account are governed by bodies of law separate from the laws that govern title to tangible property that cover negotiable instruments, electronic funds transfers, and bank deposits. The class in law school in which I learned about these rules and concepts was called "Payment Systems". These bodies of law have their own, non-title based, set of rules governing what happens when somebody embezzles or otherwise steals money from a bank account.
Would this always be the case if the money came out of the victims
account? Would it be different if it was a bank employee, or a foreign
hacker, or one of these "work from home, cash this cheque" scams who
stole the money? Does it make a difference if the mother improperly
influenced them to sign cheques to transfer money or if she forged the
documents?
The rules governing negotiable instruments, electronic funds transfers and bank deposits do make these kinds of distinctions, within their non-title system for figuring out who bears the loss of theft from bank accounts. But they do so outside the legal and conceptual title to property framework that applies to tangible property.
These rules are quite detailed and specific and don't spell out the big picture principles behind them.
Basically (subject to some narrow exceptions), a loss due to theft or fraud is usually born by the person or firm that dealt with the thief at the time of the theft, unless the thief was entrusted with access to the account by the account holder, in which case the account holder bears the loss.
In this case, the money is gone and the bank is not on the hook, at an underlying logical level, because the account was entrusted to a fiduciary who breached their duty, which is an exception to the general rule that bank, which was the last person who dealt directly with the thief, would be on the hook for restoring to the heirs the money that was stolen from their accounts.
In contrast, suppose that someone was impersonating the person who had control of the accounts, but was actually a stranger who had nothing to do with those accounts, and made a withdrawal from those accounts. In that case, the bank would have had to restore the money stolen to the heirs, and would bear the loss.
Another useful way to think about the entrustment rule is that it really isn't even an exception to the general rule, it is just a clarification of a common fact pattern.
In this case, the theft didn't occur when the money was taken out of the account at the bank. If the person who took that money out had used it (or an equivalent amount of their personal funds) to pay for private school tuition for the kids who were beneficiaries of those accounts, or to buy loose diamonds that were then placed in a safe deposit boxes in the name of the kids who were the beneficiary of those accounts, it wouldn't have been theft at all. The theft occurred not when the money was taken out of the bank, but when the money taken out of the bank was used in a way that did not benefit the kids or concealed the money so that no one could use it for the kids. Thus, the person the bank dealt with, in the transactions withdrawing money from the bank, at the time that the bank dealt with them, wasn't a thief. The theft only happened later, at a time when the bank had nothing to do with the thief. Therefore, the bank has no responsibility to restore the stolen funds to the kids.
But while this is the gist of how those rules work, that isn't actually how you get to the end result legally. Instead, you have to look at a bunch of detailed legal rules for very specific situations and work through them (sometimes with more than one step in the analysis from different parts of the relevant statutes) until you get to the answer.
For example, in terms of statutory analysis, you look at one set of statutory sections if the embezzlement is done via a cheque, another if it is done via a wire transfer, and a third if it is done by withdrawing cash from a teller at the bank where the account has been established. This is how the relevant laws are written, even though the basic concepts and policies driving these distinct bodies of law are basically the same.
I'm not going to undertake a detailed analysis of the chapter and verse of those statutes and how they apply to various different scenarios, which is really beyond the scope of the OP. In any case, the OP doesn't have detailed enough facts regarding precisely how the theft was accomplished from a logistical perspective, to analyze the situation by knowing precisely which facts are present and applying them to the correct statutes.
Footnote
In the United States, these questions are governed mostly by Articles 3, 4 and 4A of the Uniform Commercial Code (UCC), by some federal banking regulations like Federal Reserve Regulation CC, and by the rules applicable to international wire transfer facilitating systems like SWIFT. But, in England and Wales, whose law regarding these subjects was the original source of the laws that were codified in the UCC, the substantive content and structure of the relevant laws is substantially similar.
