Aside from making funeral arrangements and informing all parties involved of the death, dealing with a deceased’s bank accounts is one of the most difficult things the executor must do.
Once the executorship is confirmed, they will have access to all of the deceased assets, including their bank accounts. It can be confusing to get things organized before visiting the bank. We’ll explain what to do when an account holder passes away.
Key Takeaways
The executor of a will requires access to bank accounts to distribute funds according to the will.
Family members should notify banks of the account holder’s passing as soon as possible.
Using Trustworthy makes storing access details to digital assets easy and secure.
Why an Executor of a Will Needs to Access Bank Accounts
The funds in a bank account are available for the executor to use to cover debts, taxes, and other estate costs.
Once the estate is settled, the executor can liquidate the account and distribute the funds in accordance with the will. However, the executor cannot spend the money however they like or for their personal needs.
Related: Do Wills Expire?
How an Executor Accesses a Deceased Person’s Bank Account
These are the steps an executor has to take to access the deceased's bank accounts:
Obtain the deceased's original death certificate from the county coroner or county vital records office. Photocopies are insufficient. For each copy, be prepared to pay a fee.
Identify the banks, credit card companies, and other financial institutions that the deceased had accounts with. Notify them of your appointment as executor and ascertain the specifics of the assets in each account.
Give the necessary data and paperwork to the account representative at the bank. Ensure you have the appropriate identification to demonstrate your identity as the executor. Make sure you have a copy of the trust or probate court order designating you as the estate's executor.
Gain access to every safe deposit box and catalog its contents. The will and death certificate will probably need to be shown to the banks.
It's also important to note:
Once you notify the financial institutions that you are the executor, the accounts will be frozen, and most transactions will only be carried out with your permission.
Financial institutions will permit some payments, including those for funeral costs, upkeep costs for specific assets, and costs associated with handling an estate.
Additionally, you should ask the financial institutions for a history of all transactions made on the credit card and bank accounts.
This will help in determining the following:
Transactions for canceled services, such as utility bills, insurance premiums, or subscriptions
The deceased's debts
You will have the same power to manage the accounts that the decedent would have had if they were still alive once you have secured a Grant of Probate or Grant of Administration.
The monies may be released without the need for a grant if the bank account's worth is deemed small by the financial institution involved.
What Happens to Bank Accounts After Death
This is dependent on a number of elements, such as whether the account is joint, whether a will exists, and whether a beneficiary has been designated.
Solely-Owned Bank Accounts
When the bank learns of the account holder's passing, it delivers the funds to the person designated to inherit the account's funds if the account holder named one. The bank usually closes the account after that.
Joint Accounts
Most joint bank accounts feature automatic rights of survivorship, which ensures that the surviving signer(s) retains ownership of the funds in the account if one of the account signers passes away. The money in the account can be used as usual by the primary account owner, who is still alive.
It is wise to confirm with your bank that the account has automatic rights of survivorship if you are a signer on a joint account. Some banks freeze joint accounts when one of the signers passes away, making it difficult for the survivor to retrieve the money.
Bank Accounts of Those Without a Will
When someone dies without a will, their bank account still passes to the designated recipient. This becomes more problematic if someone passes away without naming a beneficiary.
The executor of the estate often manages all of the decedent's possessions, including cash in bank accounts. In the absence of a will, the state appoints an executor in accordance with local law.
The executor initially pays any estate creditors from the account's funds before distributing the remaining funds in accordance with local inheritance regulations.
How Banks Find Out When Someone Dies
Banks need to be informed when an account holder passes away so they can quickly cancel accounts and disburse funds.
Family members: Family members notifying the bank of the account holder's death is a typical way for a bank to learn of the death.
Social Security: Funeral directors regularly notify the Social Security Administration of a recipient's passing, ensuring that no more Social Security checks are sent. Nevertheless, payments from Social Security are occasionally made after a person has passed away, and these must be repaid.
Related: Can You Pay Money Into A Deceased Person's Bank Account?
Why Your Executor Needs Access to Your Digital Assets
Your executor won't be able to carry out their duties without access to your digital assets. Store the details to access your digital assets with Trustworthy.
Without access to your digital assets, such as bank accounts, executors will not be able to:
Pay bills online
Cancel online subscriptions
Terminate online insurance premium payments
Related: Can I Do A Video Will? (Is It Legitimate & What To Consider)
How to Make Sure Your Bank Accounts Have a Beneficiary
If you want to add one or more beneficiaries to your account, you'll probably need the same paperwork you'd need to open a bank account.
The following details can be needed:
Full name, address, and birthdate of the beneficiary
Beneficiary's tax identification number or Social Security Number
Beneficiary's national citizenship
Most financial institutions will ask you to phone customer care or your local branch to add a beneficiary. Some, however, might also permit you to make account adjustments through online banking.
Beneficiaries of a bank account may be added at any time. When you open a new bank account, you are not required to name a beneficiary. If necessary, you can also decide to take a beneficiary out of your account at any time.
Adding a beneficiary to your bank account ensures that someone will be able to access your money after your passing.
Be sure to update your account beneficiary information if your personal circumstances change. You can unwittingly leave money to your ex-spouse if you're not careful.
How to Leave Bank Account Access Instructions
Leaving your account names and passwords is the best way for your executor to gain access to your accounts.
By doing this, you will no longer need to obtain authorization to use the accounts as you do (in those states that give executors authority to ask for permission). Simply include these directions in a letter.
Along with your will and other estate planning paperwork, keep the letter safe. Although your executor does not now require this information, he or she should be aware of where to look for it.
You might want your executor to send your sister all of your digital images or write a personal message to share on social media. Your executor will be able to carry out your instructions more easily, the more specific they are. With Trustworthy, you can access these documents anywhere and share them securely with expiring links.
Ditch your piles of files by trying Trustworthy free.
Frequently Asked Questions:
Can an executor of a will take everything?
According to Scott Rahn, the founder of RMO Lawyers:
“Generally, no the executor of the will cannot take everything unless they are the will’s sole beneficiary. An executor is a fiduciary to the estate’s beneficiaries, not necessarily a beneficiary themselves. Serving as an executor only entitles someone to receive an executor fee.”
How long after death can a bank account be open?
Usually, the bank will only close a deceased bank account after the deceased’s estate has gone through probate, which can take anywhere from a few months to a year.
What happens if no beneficiary is named on a bank account?
If your deceased loved one’s bank account has not been named as a beneficiary, it will be up to what is outlined in the will or passed through the estate following inheritance law.
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