Executors can access estate funds to do their job, but not without limits. Learn when withdrawals are lawful and when they threaten your inheritance.
Deceased persons’ bank accounts do not always become part of their estates after death, but when they do, the funds may only be used for legitimate estate administration purposes. This typically includes paying valid debts and taxes and distributing assets to beneficiaries in accordance with the will.
Unfortunately, some executors misunderstand the scope of their authority and treat access to estate funds as permission to use them outside those limited purposes, creating serious problems for the estate and its beneficiaries.
For example, an executor may properly use estate funds to pay a realtor for services related to the sale of estate property, so long as the expense is reasonable and well-documented. However, it would not be appropriate for the executor to unilaterally take a fee for arranging the sale. While they may be entitled to compensation for their work, any extraordinary fees must be approved by the court before they can be taken.
When an executor misuses or misappropriates estate funds, they not only risk reducing beneficiaries’ inheritances, but they also expose themselves to personal liability. If found responsible for misconduct, an executor can be required to repay the estate out of their own pockets.
For this reason, it is essential for beneficiaries, heirs, and executors alike to understand when estate funds may be used and when they may not. If there are warning signs of misuse, such as lack of transparency or incomplete accountings, prompt action can help prevent further harm and improve the chances of recovering misused funds.
A probate attorney can help beneficiaries evaluate whether an executor’s actions were proper and, if necessary, pursue legal remedies to restore the estate. Attorneys can also guide executors through their fiduciary duties and help ensure they comply with the law when handling estate assets.
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Key Definitions
Executors: Executors are typically nominated in a decedent’s will and later formally appointed by the probate court. They are responsible for managing the estate throughout the probate process.
Administrators: Administrators are typically appointed by the court when a decedent dies without a valid will or the court appoints someone other than the named executor as personal representative of the estate. They manage the estate during probate in accordance with state intestacy laws.
Deceased person’s bank accounts: A deceased person’s bank account may be claimed by the executor or administrator on behalf of the estate. Such accounts generally become estate assets only if they were solely owned by the decedent at the time of death and did not name a beneficiary or joint owner.
Estate accounts: Also called probate accounts. Funds recovered from a deceased person’s bank account are typically transferred into a separate court-supervised estate account opened for estate administration. Executors and administrators may use estate account funds only for legitimate estate-related expenses and distributions.
How Does an Estate Account Work in California?
Estate accounts are typically opened by an executor or administrator to hold and manage estate funds during probate. While those funds may come from a deceased person’s bank account, they may also come from other estate sources, such as proceeds from the sale of estate property.
The below illustrates how funds are transferred from a deceased person’s bank account into an estate account, and how those funds must be handled throughout the probate process.
- Account owner dies →
- Executor claims account after appointment →
- Executor opens separate estate account →
- Executor transfers funds to separate account →
- Executor uses estate account for legitimate estate expenses and distributions →
- Executor documents every transaction made using estate funds
When Can an Executor Access Bank Accounts?
An executor may access a deceased person’s bank accounts only if those accounts qualify as estate assets, and only after the executor has been formally appointed by the probate court.
Once appointed, the executor may transfer bank account funds into a separate estate account and use those funds solely for legitimate estate expenses and distributions to beneficiaries.
How Does the Executor of a Will Access Bank Accounts?
To access bank accounts, the executor generally will need to show the bank a certified copy of the account holder’s death certificate, verification of their own identity, and documentation establishing their authority to act on behalf of the estate.
The document establishing authority is called Letters Testamentary for executors or Letters of Administration for administrators.
Because estate bank account rules can vary, it is always best for executors to contact the institution in advance to confirm exactly what documentation is needed to claim the account on behalf of the estate.
Note: A deceased person’s bank account does not always pass to their estate. If the account is jointly owned, the surviving account holder will typically assume full ownership automatically upon the other account holder’s death. Similarly, if the account has a designated beneficiary, that person can usually claim the funds directly from the bank without the account going through probate.
When Can an Executor Withdraw Money From an Estate Account?
An executor may withdraw money from an estate account only for purposes related to administering the estate, such as paying the decedent’s valid debts and taxes, hiring necessary professionals like CPAs and realtors, and making distributions to beneficiaries.
Importantly, an executor has a fiduciary duty to act in the best interests of the estate and its beneficiaries. Any withdrawals that benefit the executor personally, or others close to them, at the expense of the estate may be considered improper, become subject to legal challenge, or result in personal liability.
How Can an Administrator Open an Estate Bank Account?
An estate account may only be used for expenses that benefit the estate and its beneficiaries. In most cases, beneficiaries cannot receive their inheritances until the decedent’s debts, taxes, and administration costs have been properly addressed.
Below is a breakdown of common expenses that may be paid from an estate account:
- Legal and professional fees. May include probate attorney fees for administration assistance or necessary litigation, accounting fees for the preparation of financial reports, and appraisal fees for valuing estate assets.
- Probate court and administration costs. May include California probate fees (including executor pay and filing fees for opening probate), fees for certified copies of court orders and Letters Testamentary or Letters of Administration, and publication fees for required legal notices (such as notices to creditors).
- Executor expenses. May include out-of-pocket costs the executor personally pays while administering the estate.
- Debts and taxes. May include credit card balances, medical bills incurred before death, personal loans, utility bills, final personal income tax returns, and any court judgments against the decedent.
- Costs related to preservation and management of estate property. May include property taxes, mortgage payments, cleaning fees, security services, and repairs and routine maintenance.
Can an Executor Withdraw Cash for Personal Use?
Executors are strictly prohibited from withdrawing estate funds for personal use. Estate account withdrawals may only be made for legitimate purposes related to estate administration and making distributions to beneficiaries in accordance with the will.
An executor who uses estate funds for personal benefit is engaging in self-dealing, a serious breach of fiduciary duty that can result in personal liability and other financial and legal consequences.
Even when an executor is also a beneficiary, they are not entitled to take their inheritance in advance. Any distribution to themselves must occur only after court approval of final distribution and in the same manner and timing as the other beneficiaries.
Can the Executor of an Estate Take Everything?
An executor of an estate cannot simply “take everything.” They are legally required to follow the terms of the will and distribute assets exactly as directed. This obligation applies even when the executor is also a beneficiary.
There is one limited exception. An executor may effectively receive the entire estate only if they are the sole beneficiary under the will. Even then, they cannot take distributions immediately; they must first complete their fiduciary duties, including paying estate administration expenses, settling valid debts and taxes, and ensuring all probate requirements are satisfied.
Can an Administrator Withdraw Money From an Estate Account?
An administrator may withdraw funds from an estate account only to cover legitimate costs associated with administering the intestate estate. This includes paying valid debts and taxes owed by the decedent, compensating necessary professionals such as CPAs or realtors, and distributing assets to heirs in accordance with California’s intestate succession statute.
An administrator is never permitted to use estate funds for personal benefit or to advantage others at the expense of the heirs. Although they may be entitled to reasonable compensation for their services, that compensation is generally governed by statute and must be approved by the court.
Can an Administrator of an Estate Take Everything?
An administrator cannot simply “take everything.” They are legally required to distribute property to the decedent’s heirs according to intestacy laws.
While there are rare scenarios where an administrator may ultimately receive the entire estate — for example, if they are the decedent’s only surviving heir — they must still first pay all outstanding debts, taxes, and administration expenses before receiving any distribution.
Can Beneficiaries Demand to See Deceased Bank Statements?
Beneficiaries have the right to request and review bank statements and other financial records. Doing so is often essential when there are concerns about improper withdrawals or executor misconduct.
Reviewing bank statements, supporting documentation, and estate accountings can help identify whether estate funds are being properly managed. However, improper activity is not always immediately obvious, which can make it difficult to detect without careful review. An attorney can assist in analyzing financial records and spotting suspicious transactions.
If an executor refuses to show accounting to beneficiaries, this may be a warning sign of potential misconduct. In such cases, a lawyer can demand disclosure or petition the court to compel production of the records. Likewise, beneficiaries have the right to challenge incomplete or inaccurate accountings through the probate court.
How to Handle an Executor Misusing Estate Funds
Prompt legal action is essential if you suspect an executor is misusing estate funds. The most effective way to protect the estate is to stay engaged in the administration process by maintaining clear communication with the executor, reviewing all available documentation, and working closely with an experienced probate attorney.
Here are five key steps to take if you believe improper withdrawals are occurring:
1. Request financial documents.
Ask the executor for relevant financial records, including estate account statements, receipts, and any formal or informal accountings. Whenever possible, submit your request in writing so you have documentation if court intervention becomes necessary.
2. Consult a probate attorney.
An experienced attorney can review the available records, help identify potential misconduct, and determine whether further investigation or additional document requests are warranted.
3. File a petition with the probate court.
If evidence suggests wrongdoing, your attorney can file a petition outlining the executor’s conduct, the harm to the estate, and the legal remedies being sought, such as damages, a surcharge, or removal of the executor.
4. Consider settlement.
Litigation can be time-consuming and costly. In some cases, disputes can be resolved through negotiation or mediation, which may preserve estate assets and reduce delay — though it often requires some compromise.
5. Attend court hearings.
If the matter proceeds to litigation, attend all hearings with your attorney. Your attorney will convincingly present the evidence and argue the case on your behalf before the court.
*If you prevail, the court may request attorney’s fees and costs, but such awards are not guaranteed. For that reason, it is important to plan for the possibility of bearing some or all litigation expenses.
FAQs on Withdrawing Cash From an Estate Account as the Executor
Still confused when estate funds can be used after death and when they can’t? Explore the frequently asked questions below for additional guidance.
How long can an executor hold funds in California?
An executor may hold estate funds throughout the probate process as needed to complete administration of the estate. However, once all duties are finished and the court approves final distribution, the executor must promptly distribute the remaining assets to beneficiaries.
In California, most estates are administered and closed within approximately 12 to 18 months after probate begins. However, more complex estates, or those involving disputes or litigation, may take longer to resolve. Whenever possible, probate should be completed within about one year of the decedent’s death.
While some delay in distributions can be justified by administrative or legal requirements, an executor may not hold funds indefinitely or without a valid reason tied to estate administration.
How long after someone dies can you access their bank account?
How soon a bank account can be accessed after someone dies depends on how the account is titled.
If the account has a joint owner, they may continue using the account as they normally would without any interruption to their access. On the other hand, if it has a designated beneficiary, they often can access the funds shortly after providing the bank with a certified death certificate and proof of identity.
If the account belongs solely to the decedent and has no beneficiary designation, the executor may access it after they are formally appointed by the probate court. In California, this process can take several weeks or longer.
Who can withdraw money from a deceased person’s bank account?
Who can withdraw money from a deceased person’s bank account depends on how the account is titled.
If the account is jointly owned, the surviving account holder typically assumes full ownership automatically upon the other owner’s death and may continue using the account as usual.
If the account has a designated beneficiary, that person can generally claim the funds directly from the bank by providing a certified copy of the death certificate and proof of identity. In most cases, the beneficiary transfers the funds into their own account rather than continuing to use the decedent’s account.
If the account becomes part of the estate, the executor generally does not continue using the account directly. Instead, the executor, after being appointed, claims the funds on behalf of the estate and transfers them into a separate estate account used to manage estate assets during probate.
Do bank accounts with beneficiaries go through probate?
No. Bank accounts with beneficiaries generally do not go through probate. These accounts typically pass directly to the named beneficiary upon the account holder’s death, often before the probate process even begins.
To claim a bank account, beneficiaries usually must provide the bank with a certified copy of the death certificate and valid proof of identity.
Although beneficiary designations are usually straightforward, they can occasionally be challenged. In rare cases where a designation is successfully disputed, the account may be required to pass through probate as part of the estate.
How much does an executor get paid in California?
An executor is entitled to reasonable compensation under the statutory structure for executor fees in the California Probate Code. This framework establishes the calculation of “ordinary” compensation for both the personal representative and their legal counsel based on the value of the estate.
Under this system, executor and attorney fees are tied to the appraised value of the estate’s assets, meaning compensation increases as the estate’s value increases, subject to statutory limits.
In addition to ordinary fees, California law allows for “extraordinary fees” in certain circumstances. These may be awarded when the personal representative or their attorney performs services beyond the scope of standard probate administration, such as complex litigation or unusual administrative tasks, but they must be justified and are subject to court approval.
Can I deposit an estate check in my account as executor?
No. An executor cannot deposit an estate check into their personal bank account. Doing so constitutes commingling of funds, which is a breach of the executor’s fiduciary duties.
Any check made payable to the estate should be deposited promptly into a dedicated estate account. This ensures that estate assets remain properly segregated and used only for legitimate administration purposes.
Maintaining a separate estate account also helps preserve accurate financial records and creates a clear trail of all transactions. This transparency is essential for both efficient estate administration and beneficiary oversight.
If an executor is commingling estate funds with personal assets, beneficiaries should consult a probate attorney as soon as possible. An attorney can investigate the conduct, request accountings, and take legal action if necessary to protect the estate and preserve the beneficiaries’ inheritance.
Can an executor use a deceased person’s credit card?
An executor should not use a deceased person’s credit card under any circumstances, even to pay legitimate estate-related expenses.
When a credit card holder dies, the authority to use that card generally terminates immediately. Any charges made after death may be treated as unauthorized and could potentially constitute fraud.
This rule applies even if the executor is the decedent’s spouse or was previously an authorized user on the account. Rather than using the deceased person’s credit card, estate-related expenses should be paid through a properly established estate account.
Can you get in trouble for using a deceased person’s bank account?
Yes. If you are not legally authorized to use a deceased person’s bank account, you could face legal claims for improperly withdrawing or using the funds. A court may order you to return the money to the estate and, in some cases, pay additional damages.
That said, using a deceased person’s bank account is not always improper. For example, a surviving joint owner generally assumes ownership of the account automatically after death, and a designated beneficiary may typically access the funds after properly claiming the account through the bank. In those situations, using the account or its funds is generally permitted.
Concerned an executor is misusing estate funds?
Navigating the rules surrounding deceased persons’ bank accounts and estate funds can quickly become complicated. Executors must comply with strict fiduciary obligations, while beneficiaries and heirs have the right to ensure estate assets are being handled properly.
Whether you are an executor seeking guidance on your duties and limitations, or a beneficiary concerned about improper withdrawals or misuse of estate funds, our experienced probate attorneys can help you understand your rights and protect your interests.
Contact Keystone Law Group today to speak with our team and discuss your situation.
