When the unthinkable happens and a loved one passes, there are a number of challenging decisions to be made. From funeral arrangements, choosing a final resting place, informing friends and family and to settling the deceased’s estate, there are many tasks to organise.
One thing you may not have considered is what will happen to your loved one’s bank accounts. To help remove some of the confusion that comes with this difficult time, we run through what happens and how to close a bank account of a deceased person.
How happens to my bank account after I die?
Once a person has died, their bank accounts are typically cancelled by a next of kin, or executor of the will. Dependant on what the individual outlined in their will, any remaining money will be paid out according to their wishes. An individual’s last will and testament is a legally binding document and determines who receives the deceased’s assets upon their death.
If your loved one has no will, then ownership of their bank account is transferred to an estate administrator or next of kin. It’s important to note that before this process takes place, any outstanding personal loan or credit card debts held by the deceased will be paid by their remaining savings.
How to access the bank accounts the deceased
Accessing a deceased estate bank account begins with notifying the respective financial institution to get the process started. Before they settle a deceased estate bank account or a deceased spouse bank account, they will require proof of death and any next of kin will need to supply identification proving they are the ones to inherit the deceased’s bank accounts.
If you’re wondering how to claim money from the bank after a death, you will need to provide a death certificate for the deceased, and possibly a letter of administration if required. If you don’t have the death certificate, some banks may accept a combination of the below as proof of death:
- Solicitor or coroner letter
- Funeral bill
- Medical certificate
- Probate bond
- Grant of probate
How to close a bank account of a deceased person
If your loved one didn’t leave behind a will; you might be wondering how to close their bank account. In this situation, the Supreme Court will typically appoint an estate administrator to oversee this process. This individual will be provided with a Probate/Letter of Administration by the courts which in turn needs to be shown to the relevant financial institution along with the death certificate.
Once the financial institution has all the require documentation, account access is restricted until a certificate of balance is issued and the account closed for good. In the event that you have a joint bank account with the deceased, you will have to go through this same process to gain complete ownership of the account.
Some bank accounts offer ‘rights of survivorship’ – which allows the next of kin to simply present their loved one’s death certificate to claim ownership of the previously joint account. Not all financial institutions offer automatic rights of survivorship, however, so make sure to check this with your banking institution.
Other accounts to consider
Usually it falls to the next of kin or the executor of the will to notify any relevant organisations, service providers and other groups of the deceased’s passing. This includes notifying:
- The post office to redirect all mail
- Superannuation provider
- Centrelink
- Religious organisations
- Local governments
- Any home delivery services
- In-home services such as nurses or trainers
FAQs
They generally will have to present to the bank with a certified copy of the decedent's death certificate, their own government-issued ID, and the trust instrument in order for the asset to be released to them, though the documentation needed may vary from bank to bank, so it is best to call in advance to find out what ...
Can an executor withdraw money from deceased bank account? ›
A court must grant you the power to withdraw money from the account if you're neither a joint owner or an account beneficiary. For example, an executor must produce proof of executor status and a certified copy of the death certificate to collect funds and place them in an estate account.
How do you handle finances after death? ›
9 Financial Steps to Take After the Death of a Spouse
- Obtain Certified Copies of the Death Certificate. ...
- Gather Essential Documents. ...
- Contact Social Security. ...
- Notify Insurance Companies. ...
- Address Financial Accounts. ...
- Review Bills and Payment Due Dates. ...
- Plan for Short-Term Expenses. ...
- Avoid Identity Theft.
Most joint bank accounts include automatic rights of survivorship, which means that after one account signer dies, the remaining signer (or signers) retain ownership of the money in the account. The surviving primary account owner can continue using the account, and the money in it, without any interruptions.
Can you use a deceased person's debit card to pay their bills? ›
The most important thing for family members and other heirs to know is that they should never forge the signature of the deceased to pay bills or use the person's ATM or debit card to get cash. That's fraud.
Who has access to bank accounts when someone dies? ›
Accounts owned solely by the deceased
All accounts held solely by the deceased will be stopped to debit transactions, preventing any unauthorised access. This includes transactional and savings accounts, credit cards and loans of any type. Direct access to the deceased's accounts will not be provided to any party.
Can an executor override a beneficiary on a bank account? ›
Generally, a will does not override banking beneficiary designations listed on the bank account. This is because most bank accounts are considered non-probate assets, meaning they pass directly to the designated beneficiary without being subject to the terms of a will.
What happens if an executor of a will steals the money? ›
If the wrong actions of the executor are extremely severe, such as theft or fraud, they may face criminal charges as well as possible fines, probation or jail time.
Can an executor withhold money from a beneficiary? ›
Executors are legally empowered to withhold money from a beneficiary if there's a legitimate and lawful reason, such as unsettled debts, taxation issues, or ongoing estate litigation.
Why you shouldn't always tell your bank when someone dies? ›
Amy explains that waiting to inform the bank allows a family member time to gather all relevant information, including details on life insurance policies and electricity and utility bills. After notifying the bank, the account will be frozen, meaning nothing can be taken out or deposited.
If the deceased has named a payable-on-death (POD) beneficiary for the account, the person named will get access to it immediately. They will simply need to show a death certificate and identification to the bank.
What debts are forgiven at death? ›
Unsecured debts are the most common types of debt forgiven at death. Examples of unsecured debt include federal student loans and medical bills.
How long should a bank account remain open after death? ›
One important thing to note about a joint bank account after death, as well as a regular individual account, is that FDIC insurance only applies for six months. Typically the FDIC provides coverage up to $250,000 per account, per category, per bank.
How long can a bank account remain open after death? ›
Banks generally cannot close a deceased account until after the person's estate has gone through probate or has otherwise settled. Joint accounts that are held together with a surviving owner are not considered deceased accounts. Ownership of these accounts reverts to the surviving owner.
How do banks know when someone dies? ›
Not automatically, no. Typically, someone (usually your executor, next of kin, or so) needs to notify the bank that you've died and provide a copy of the death certificate.
Can family withdraw money from deceased bank account? ›
If you're the joint owner of the deceased person's bank account, you should be able to withdraw money right away. Otherwise, you typically must supply documents showing that you legally have access to the account. Documents a bank might request include: Government-issued ID, such as your driver's license or passport.
What happens if no beneficiary is named on bank account and no will? ›
If the decedent owned a bank account and did not name a beneficiary, the account will probably have to pass through probate—the rigorous and time-consuming process whereby the court oversees the dissolution of an estate.
Why does Social Security withdraw direct deposits from a deceased person's bank account? ›
For starters, a person is due no Social Security benefits for the month of their death. “Any benefit that's paid after the month of the person's death needs to be refunded,” Sherman said. With Social Security, each payment received represents the previous month's benefits.
