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.
An executor of a will does have the right to access bank accounts. Once the executorship is confirmed, the executor 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. As a lawyer, I’m here to help you figure out what to do when an account holder passes away.
After reading this article, you will learn the following:
Why an executor of a will needs access to bank accounts
What steps must an executor take to access a bank account
What happens to bank accounts after death
How to avoid any complications + frequently asked questions
Why Does An Executor of A Will Need To Access Bank Accounts, Anyways?
The funds in a bank account are available for the executor to use to cover debts, taxes, and other estate costs.
The executor can liquidate the account and distribute the funds in accordance with the will once the estate is settled. The executor cannot spend the money however they like or for their personal needs.
Related Article: Do Wills Expire?
What Steps Does an Executor Have to Take to Access a 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, notifying them of your appointment as executor, and ascertaining 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 that:
The accounts will be frozen once you've let the financial institutions know you're the executor, 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 to be small by the financial institution involved.
Related: Do Attorneys Keep Copies Of a Will? (4 Things To Know)
What Happens to Bank Accounts After Death?
The answer 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.
Related: What Happens If a Deceased Individual Owes Taxes?
How Do Banks Find Out When Someone Dies?
In order to quickly cancel accounts and disburse funds, banks need to be informed when an account holder passes away.
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.
What Is the Executor's Job as it Pertains to Bank Accounts?
The executor is accountable for making sure all assets in the bank account are identified and transferred to the appropriate people.
Executors are not permitted to mix the deceased's bank account transactions with their own personal transactions.
Money from the deceased's bank accounts will be used to pay the deceased's debts and make disbursem*nts to the right heirs.
Related Article: 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.
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:
How to Make Sure Your Bank Accounts Have a Beneficiary
You'll probably require the same paperwork you'd need to open a bank account if you want to add one or more beneficiaries to your 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, though, 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 circ*mstances change. You can unwittingly leave money to your ex-spouse if you're not careful.
How Do I 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, the need to obtain authorization to use the accounts as you do will be removed (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. Keep in mind to update your document as your account information changes.
Furthermore, you can think about giving your executor instructions on what you want to happen with your digital assets if you have any such thoughts.
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.
Trustworthy allows you to keep up-to-date digital copies of your important documents and instructions.
With Trustworthy, you can access these documents anywhere and share them securely with expiring links. Trustworthy does things no other system of organization can do. Ditch your piles of files by starting your 14-day free trial.
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