When a person dies, there are a lot of loose ends that will need to be tied up. One of those loose ends is closing the deceased person’s bank accounts (e.g., checking accounts, savings accounts, retirement accounts).
The complexity of this process will depend on a range of factors, including the nature of the account (e.g., Is it a pay-on-death bank account or transfer-on-death bank account?) and whether or not you’ve been granted the legal authority to manage the account, among other things.
While getting access to a deceased person’s bank account can be straightforward (especially if the account owner had designated a pay-upon-death beneficiary), we recommend working closely with a probate attorney after a loved one dies to ensure your beneficiary rights are upheld during the trust and estate administration process, and to promptly resolve any trust and will disputes that may arise.
In the following sections, we review what a bank account beneficiary is and how to find out if you’ve been designated as one.
If you are interested in learning about how non-cash assets are transferred after death, read our article: What Happens to Property When Someone Dies?
Bank Beneficiary: Meaning
A bank beneficiary is a person or entity the owner of a bank account designates to inherit the contents of their account upon their death.
To designate a beneficiary on their bank account, the account owner must sign a beneficiary designation form, sometimes referred to as a Totten trust, which converts their bank account into a payable-on-death (POD) account.
Do Bank Accounts Have Beneficiaries?
Some bank accounts will have beneficiaries, while others won’t. It’s important to remember that while most checking and savings accounts can be transfer-on-death or pay-on-death bank accounts (which make withdrawing money from the bank account after death immediately possible for the beneficiary designated on the account), it is generally not required for account owners to designate a beneficiary, nor are account owners necessarily aware of their right to do so.
How to Find Out if You Are a Beneficiary on a Bank Account
To find out whether you are a beneficiary on a deceased person’s bank account, you generally will need to present a certified copy of the account owner’s death certificate and your government-issued ID to their bank. If you are indeed designated as a beneficiary on the account, the bank will release the contents of the account to you.
If you are unsure where the decedent banked, you may consider asking the decedent’s family members, the executor/administrator of their estate or the trustee of their trust. You also could try visiting banks in the vicinity of where the decedent had resided to ask them about your beneficiary status in person.
What Happens to a Bank Account When Someone Dies?
What happens to a bank account when someone dies depends on whether the decedent designated beneficiary on the bank account, jointly owned the account with another person (e.g., a spouse) or died with a will or trust that disposes of the account.
- We’ll go into the implications of each of these scenarios in the following sections.
Do Bank Accounts Have to Go Through Probate?
In general, a decedent’s bank account only needs to go through probate if the bank account is being disposed of by the decedent’s will or the decedent dies intestate (i.e., without a will) while holding title to the account in their name.
Probate is a court-supervised process used to authenticate a decedent’s will, appoint an executor or administrator of the estate, locate and value estate assets, pay the decedent’s creditors and distribute their assets to beneficiaries, among other things. While probate does have its benefits, it can be challenging to navigate, expensive, time-consuming and difficult for the decedent’s loved ones, who often are still grieving their loss when the probate process begins. Another downside to probate is that it can delay when beneficiaries and/or heirs receive their inheritances.
As a result of these pitfalls, many people attempt to avoid probate through various means, including by executing trusts, utilizing expedited probate proceedings (e.g., small estate affidavits, Spousal Property Petitions), and designating beneficiaries on transfer-on-death and payable-on-death assets, such as bank accounts, life insurance policies, retirement accounts and annuities.
It is unfortunate that banks often fail to inform account owners of their right to designate a beneficiary on their account. When this happens, and given that the account wasn’t owned jointly with someone else, the account may become a part of the decedent’s estate, resulting in it having to pass through probate. The account will also fall under the authority of the executor or administrator, who can use its funds to pay valid creditor claims before distributing the funds that remain to the appropriate beneficiaries and/or heirs.
Do Bank Accounts With Beneficiaries Have to Go Through Probate?
If there is a payable-on-death beneficiary for a bank account, it generally means that the account won’t have to go through probate.
Bank account beneficiary rules usually allow payable-on-death beneficiaries to withdraw the entirety of a decedent’s bank account immediately following their death, so long as they present the bank with the proper documentation to prove the account owner died and to confirm their own identity.
Of course, there are specific instances where a designated beneficiary may not work out, resulting in the bank account having to pass through probate. For instance, when a designated beneficiary on an account cannot be located or dies before the account owner, it could cause the account to have to pass through probate. Similarly, there could be a dispute around a designated beneficiary’s right to the account. For example, there may be evidence to suggest the beneficiary unduly influenced the decedent to add them to the account, which, if successfully proven, could disqualify the beneficiary from receiving any of the funds in the account and cause the account to have to pass through probate.
When a bank account has a pay-upon-death beneficiary, the executor and administrator generally cannot directly access its funds to pay the decedent’s debts and/or estate administration expenses; however, if you are a debtor-beneficiary, you should keep in mind that once you claim the deceased person’s bank account, your own creditors can access your newly acquired funds to satisfy your debts. Likewise, you could be responsible for paying taxes on the money you’ve received.
What Happens to a Bank Account When Someone Dies Without a Beneficiary?
When there is no beneficiary on a bank account, the first thing you should do is find out whether the decedent shared ownership of the account with someone else. If they did, that person will be presumed to gain full ownership of the account. If there is no joint owner on the account and the decedent’s trust does not dispose of the account, then the account may be subject to probate.
For certain estates, there may be ways to settle the estate without a formal probate. However, not all estates will be eligible to utilize these procedures, as they are generally intended for small, simple estates or to complete transfers of property from the deceased spouse to the surviving spouse. A probate attorney can help you determine whether the estate at issue is eligible for an expedited procedure.
What Happens to a Bank Account When Someone Dies With a Will?
When a decedent dies with a will, it may or may not affect the disposition of their bank account.
People create wills to provide instructions around how their assets should be distributed after they die. As a result, the creator of a will (called a testator) may include a provision in the document relating to their bank accounts to ensure there is no confusion about who is to inherit the accounts.
If a decedent dies with a will and their bank account does not have a beneficiary designation or joint owner and is not being disposed of by the decedent’s trust then the bank account will become a part of the decedent’s probate estate. This means the funds in the account will transfer to the court-appointed executor or administrator for deposit into an account in the name of the decedent’s estate. The executor or administrator may be able to use the funds from the decedent’s bank account to satisfy the decedent’s debts and pay probate costs. Any remaining funds will be distributed to the estate beneficiaries and/or heirs in accordance with the provisions of the decedent’s will once the probate process completes.
If a decedent dies with a trust as their primary estate planning document, and they have a bank account in their name that does not have a beneficiary designation, probate potentially could be avoided by filing a Heggstad Petition, which is a type of 850 Petition, to have the bank account transferred to the decedent’s trust.
While Heggstad Petitions can greatly expedite the process of transferring assets into and out of a trust, the court will only grant the petition if there is sufficient written evidence to indicate that the settlor intended to hold the asset as a trust asset. Until the court grants the petition, the decedent’s bank account would be subject to probate.
What Happens to a Bank Account When Someone Dies Without a Will?
What happens to a bank account after death without a will is not that different from what happens to a bank account after death when there is a will. In other words, if a bank account is jointly owned or has a beneficiary designation, it generally can bypass the probate process. A joint owner would be presumed to have full ownership of the account, whereas a designated beneficiary could claim its contents directly from the bank. A decedent’s bank account could also bypass probate if it is being disposed of by their trust.
On the other hand, if the decedent dies without a will, and their bank account is not jointly owned, does not have a beneficiary designation, and is not being disposed of by their trust, it will become a part of the decedent’s intestate estate, resulting in the account passing through probate, and the administrator of the estate distributing whatever funds remain in the account after probate in accordance with California’s intestate succession laws.
What Happens When a Trust Is Named as the Beneficiary of a Bank Account?
Naming a trust as the beneficiary of a bank account is something trust creators (called settlors, grantors or trustors) commonly do so that the asset can bypass probate and be distributed in accordance with the terms of their trust.
The primary advantage of naming a trust as beneficiary of a bank account is that it help keeps assets consolidated so the decedent’s survivors don’t have to track them down.
Plus, since a trust generally bypasses probate, an expensive and time-consuming process, designating it as a beneficiary can help the decedent’s loved ones save significant time and money.
If a decedent designated their trust as the beneficiary on their bank account, it will have to be the trustee who goes to claim the contents of the account. They generally will need to present to the bank with a certified copy of the decedent’s death certificate, their own government-issued ID, and the trust instrument (or a certification of trust) in order for the asset to be released to them, although the documentation needed can vary from bank to bank, so it is best to call in advance to find out what you need to bring.
How to Claim Money From a Bank After Death
Keep in mind that claiming money from a decedent’s bank account will not be possible for most people, even the decedent’s own family members, unless they are a designated beneficiary or joint owner of the account or they have been appointed as executor or administrator of the decedent’s estate.
For example, our probate attorneys frequently receive inquiries from adult children about how to access the bank account of a deceased parent, and we often have to inform them that they do not have a right to access it at all, since they were not a joint owner of the account or designated as a beneficiary.
How to Claim Deceased Bank Accounts With Probate
If a deceased person’s bank account must pass through probate because it does not have a designated beneficiary or joint owner and is not being disposed of by the decedent’s trust, you will not be entitled to claim the account directly from the bank. Rather, you will have to wait for the executor/administrator to distribute the account to you at the close of the probate process.
Keep in mind that you will only be entitled to inherit the account if the decedent specifically indicated in their will that they wished for you to inherit it, or if you are an heir who is entitled to receive it by way of intestate succession. In addition, even if you are entitled to a bank account, there’s no guarantee you’ll receive its full contents, as the executor/administrator may need to use its funds to pay administration expenses and the decedent’s debts.
hout probate is only possible if the decedent had designated you as a beneficiary on the account or you are a joint owner of the account.
It may also be possible to claim a deceased person’s bank account without probate if the decedent’s trust disposes of the bank account. However, unlike designated beneficiaries and joint owners, you will not to be able to claim the contents of the account directly from the bank if you are trust beneficiary. Rather, you will have to wait for the trustee to distribute its contents to you in accordance with the terms of the decedent’s trust. Keep in mind that you’ll only be entitled to inherit the account if the decedent specifically indicated in the terms of their trust that they wish for you to inherit it.
How to Access a Bank Account After Death
Accessing a bank account after death tends to be a straightforward process, so long as you are entitled to access the account and bring the necessary documentation to confirm the account owner’s death and your identity.
In the following sections, we go over the parties that may have access to a deceased person’s bank account after death and the circumstances under which they may be able to withdraw money from it.
Can I Withdraw Money From a Deceased Person’s Bank Account as the Executor/Administrator?
An executor/administrator of an estate can only withdraw money from a deceased person’s bank account if the account does not have a designated beneficiary or joint owner and is not being disposed of by the deceased person’s trust.
Once the executor/administrator withdraws money from a deceased person’s bank account, they must account for the money by adding it to the estate inventory and listing its value. They also should place the money in a separate estate account that will be used solely to pay estate-related expenses and the deceased person’s outstanding debts. An executor/administrator can never use the money from a deceased person’s bank account for any other purpose, as doing so would be considered executor misconduct.
The documents an executor/administrator generally will be required to present to the bank include:
- A valid government-issued ID
- The death certificate of the account holder
- The account owner’s social security number
- A copy of Letters of Administration or Letters Testamentary (these documents become available once the executor/administrator is officially appointed to their role at the initial probate proceeding)
The executor/administrator should obtain multiple copies of the deceased person’s death certificate and the Letters of Administration or Letters Testamentary, as these documents will be required for many of the tasks they’ll need to complete over the course of estate administration.
Can I Withdraw Money From a Deceased Person’s Bank Account as a Designated Beneficiary?
If you are the designated beneficiary on a deceased person’s bank account, you typically can go to the bank immediately following their death to claim the asset. In general, there is no waiting period for beneficiaries to access the money; however, keep in mind that laws can vary by state and by bank.
The documents a designated beneficiary generally will be required to present to the bank include:
- A valid government-issued ID
- A certified copy of the death certificate of the account holder
Once the money in a decedent’s bank account has been released to you, it is more difficult for another party to contest your entitlement to the funds, as recovering money that has already been distributed is an uphill battle.
How to Find the Bank Accounts of a Deceased Person
How simple it is to find a deceased person’s bank accounts usually hinges on whether the decedent left behind instructions. Regardless, whether you are a designated beneficiary or an executor/administrator, it is crucial to act quickly to locate a deceased person’s bank accounts, because assets that are unclaimed for a prolonged period of time could be sent to your state’s unclaimed property division. While it is possible to reclaim assets that were appropriated by the unclaimed property division, it is ideal to locate them before it gets to this point.
In the following subsections, we go over the different ways you may be able to find a deceased person’s bank accounts.
Refer to Their Will
Ideally, the decedent will have included information about their bank accounts in their will or their estate planning file, but this is not always the case, nor do all decedents die with a will.
However, chances are that if a decedent died with a will and the will was prepared by an experienced estate planner, the decedent’s estate planning file will contain information about their bank accounts. If the decedent died without a will, it may be necessary for you to do some detective work to track down their bank accounts.
Search Their Home and Mail
Considering that banks frequently send communication and billing statements via the postal service, you may be able to locate their bank accounts by simply perusing their mail. Likewise, you may be able to locate their bank accounts by searching their home for other types of documents, such as tax returns, ATM receipts and checkbooks. You could even try logging onto their computer to see if you can find any information on there.
Visit Banks in Their Area
While physically stopping by banks close to the decedent’s home or place of work is generally a great way to find out where they kept their money, banks, for obvious reasons, will not release an account holder’s information and funds to just anyone. You will need to provide documentation to prove both that the account holder died and you have the legal authority (as a designated beneficiary, joint account holder or executor/administrator) to access the account.
Call Their Employer
If the decedent had been working for an employer, chances are the employer has their bank account information from making direct deposits to their account. Similar to banks, the human resources department is unlikely to provide you with the information you are seeking unless you can provide proof that their employee has died and that you have the authority to manage their bank accounts.
Search Online Databases
As previously mentioned, there is a risk of assets that remain unclaimed for a prolonged period of time being sent to the state; however, it is rare for this to happen. Still, if you are not having any luck locating a decedent’s bank accounts and have tried all the options mentioned above, it may be worth searching online databases that were created specifically for the purpose of tracking down missing money and/or property.
A few online databases to search include:
Consult With an Experienced Probate Attorney
Figuring out the probate process and what to do with bank accounts after death can be a lot to handle when you are grieving the loss of a loved one. Luckily, you can pawn off most of these cumbersome tasks on your probate attorney.
While an attorney can certainly help with locating a decedent’s bank accounts, they are an excellent resource to have by your side for the entirety of administration, regardless of your legal needs and whether you are a beneficiary, heir, executor/administrator or trustee.
Can You Contest a Beneficiary on a Bank Account?
There are many reasons why you may wish to contest a bank account beneficiary. For example, if you believe the beneficiary on an account is someone other than whom the decedent had intended to name as a beneficiary, you may wish to pursue legal action.
Before moving forward with contesting the designated beneficiary on a bank account, it’s important to ensure you have standing (i.e., a financial stake in the outcome of the matter) and a valid reason for disputing the beneficiary designation. Whether the decedent was unduly influenced or there were mistakes within the beneficiary designation form, it’s generally the contesting party’s responsibility to provide proof.
Remember, contesting a bank account beneficiary after the beneficiary has already claimed the contents of an account can be challenging. Therefore, if you plan to contest a bank account beneficiary, taking swift action and working with an experienced attorney are crucial for the best chances of success.
FAQs: Bank Account Beneficiary Rules
Bank account beneficiary rules aren’t always easy to navigate. If you have questions around bank account beneficiary rules that haven’t been answered, we recommend checking out our FAQs section below. You can also fill out Keystone’s contact us form to request a consultation.
How do I add a beneficiary to my bank account?
To add a beneficiary to a bank account, you will need to fill out a type of document known as a beneficiary designation form or a Totten trust, which you generally can obtain from your bank directly or online from the website for your bank. Once you’ve completed the paperwork, you must submit it to your bank.
How do I find deceased parents’ bank accounts?
The process for finding deceased parents’ bank accounts is identical to the process we described earlier in the article for finding bank accounts. You’ll want to start by checking your parents’ estate planning documents, and their home and mail. Next, you may wish to visit banks in their area or call their employers. Online databases can be used as a last resort if the other methods yield no results.
Remember that you are not entitled to claim your deceased parents’ bank accounts solely on the basis of being their child. You must be a designated beneficiary or joint account owner on the accounts, or your parents should have specifically devised the accounts to go to you in their will or trust. You may also be entitled to inherit them by way of intestate succession if your parents died without a will.
Does a will override a beneficiary on a bank account?
No, a will doesn’t usually override a beneficiary on a bank account, since beneficiary designations almost always supersede wills.
This means that if a will provides for an account to go to the decedent’s brother, but the decedent’s spouse is designated as a beneficiary on the same account, the asset generally will go to the spouse, unless the spouse’s beneficiary designation is successfully contested or they waive their right to the account.
Does a trust override a beneficiary on a bank account?
No, a trust usually doesn’t override a beneficiary on a bank account.
This means that if a trust provides for a decedent’s bank account to be divided equally among the beneficiaries, but the designated beneficiary on the bank account is an adult child of the decedent, that child will be entitled to the account, not the trust.
That said, if the decedent’s child had unduly influenced the decedent to be designated as the bank account beneficiary, and this can be proven, the trustee or trust beneficiaries could contest the beneficiary designation to try to have it overturned so the account can be transferred to the trust and distributed according to the trust’s terms.
At the same time, if a trust or trust amendment was executed after a disputed beneficiary designation and specifically references the disputed account as a trust asset to be directed elsewhere, it may be possible to argue that the language in the trust agreement supersedes the beneficiary designation.
What is the punishment for taking money from a deceased bank account?
Given the strict rules banks must abide by when releasing a deceased person’s money, it is difficult to wrongfully take money from a deceased person’s bank account. That said, if you manage to and get caught, you could be forced to return the stolen funds, pay damages and possibly even the opposing party’s attorney fees and costs. You may even be disinherited from the deceased person’s will or trust.
Can an executor use a deceased person’s bank account?
An executor can only use the funds from a deceased person’s bank account for estate-related expenses and to pay off the deceased person’s debts. If any funds remain, they must distribute them to the estate beneficiaries in accordance with the terms of the deceased person’s will.
It’s important to remember that an executor can only access a deceased person’s bank account if there is no designated beneficiary or joint owner on the account, and the account is not being disposed of by the deceased person’s trust.
Can a power of attorney change beneficiaries on bank accounts?
Whether a power of attorney can change beneficiaries on bank accounts depends on a number of factors. If the power of attorney is general (i.e., it is a financial power of attorney), then the attorney-in-fact usually will have the authority to change beneficiaries on a bank account.
That said, attorneys-in-fact have a fiduciary responsibility to only act in the principal’s best interest. If their actions benefit themselves or those close to them more than they do the principal (e.g., they designate themselves or their spouse as a beneficiary on the account), the attorney-in-fact could be held liable for power of attorney abuse.
If you’re an attorney-in-fact, it’s recommended that you consult with an experienced attorney prior to changing beneficiaries on a bank account to confirm such an action is permitted and isn’t in violation of your fiduciary duties.
Can a power of attorney access bank account after death
No, a power of attorney cannot access a bank account after death, since powers of attorney expire by default when a principal dies.
If a power of attorney has taken funds from a deceased principal’s bank account after death, it’s crucial the executor/administrator of the principal’s estate or the principal’s loved ones consult with an experienced fiduciary misconduct attorney to find out whether legal action can be taken to recover the misappropriated funds.
Can a minor be a beneficiary on a bank account?
While a minor can be the designated beneficiary on a bank account, they generally will not be able to claim the asset until they reach the age of majority, which is 18 in California.
When a minor is left an inheritance or earns a substantial income, it may require that a guardian of the estate be appointed to manage their finances. Their parent or another responsible adult will have to obtain guardianship by filing a guardianship petition and attending a court hearing.
If the guardianship is granted, the guardian will be able to access the bank account, but they will only be able to use its funds for purposes that benefit the minor, such as their education and health care. Once the minor turns 18, the remaining funds will be released to them.
Can a spouse override a beneficiary on a bank account
While a spouse doesn’t override a designated beneficiary on a bank account, they may be entitled to a portion of the assets in a payable-on-death bank account if those assets are community property. In community property states, such as California, assets acquired during marriage by either spouse are presumed to belong equally to the spouses.
The exception to this rule is property that was inherited by or gifted to a spouse during marriage or acquired by a spouse before marriage. If property falls under one of these categories, it may presumptively be considered that spouse’s separate property, which they can leave to whomever they please in their will or trust.
In terms of bank accounts, if a spouse had opened a bank account prior to marriage and only had deposited funds into that account prior to marriage, then that account may be considered their separate property, and their spouse may not have a right to it.
On the other hand, if the account was opened by a spouse prior to marriage, but the spouse continued to use it throughout marriage and deposited community funds into it, then it’s possible the spouse could have a financial interest in the account, even if they were never designated as a beneficiary on the account or added as a joint owner.
Can my spouse access my bank account if I die?
Your spouse can only access your bank account after you die if you designate them as a beneficiary on the account, if they are a joint owner of the account, or if they are appointed as executor or administrator of your estate.
If you do not designate them as a beneficiary or share ownership of the account with them, they could access your account as the executor or administrator of your estate, but that would require them to be appointed to the role. Similarly, they could access your account as the trustee of your trust if they’ve been appointed to the role.
That said, just because your spouse is unable to access your account, it doesn’t mean they won’t be entitled to any of its funds. If the funds in your account are community property (i.e., they were obtained during marriage and were not a gift or inheritance specifically provided to just you), your spouse may be entitled to half regardless of whether you devise the funds to go to your spouse or not.
What happens to a joint bank account when someone dies?
Joint bank account rules on death typically allow the joint account owner to assume ownership of the deceased account owner’s share of the account once they die.
This means that while joint account owners are alive, they share ownership of the account, but once an account holder dies, the surviving account owner assumes full ownership of the account and can continue accessing its funds as they used to.
Similar to payable-on-death beneficiary rules, joint bank account rules on death do not permit executors and administrators to directly access a decedent’s joint accounts to pay the decedent’s debts and/or administration expenses. Joint account owners, however, could be liable for paying taxes on any income earned by the account.
How do I cash a deceased person’s check?
You generally will not be able to cash a deceased person’s check unless you are the executor/administrator of their estate. However, even if you are, you typically won’t be cashing the check per se; most likely, you’ll be depositing it into an estate account that you can only withdraw funds from for estate-related expenses, to pay the decedent’s debts and make distributions to beneficiaries.
If you receive a deceased person’s check, it is a good idea to immediately turn it over to the executor/administrator of their estate. It is not recommended that you cash it, as doing so may be considered fraud.
How do you close a bank account after death?
To close a bank account after death, you must completely liquidate its funds.
If you are a designated beneficiary on an account, the bank will release the funds in the account to you once you present it with a certified copy of the account owner’s death certificate and your government-issued ID.
If you are an executor/administrator, the bank will release the funds in the account to you once you present it with the account owner’s death certificate, their social security number, your government-issued ID and Letters of Administration or Letters Testamentary.
If you are a joint account owner, there is no need for you to close out an account, since you are entitled to stay using the account as you normally would.
How long after probate is granted will I get my money
There is no way to say for certain how long it will take for you to get your money after probate is granted, as many variables are at play.
After probate is granted, a time-consuming process ensues to inventory the decedent’s assets, pay the decedent’s creditors, and distribute assets to beneficiaries, among other things. This process can take as little as a few months to upwards of a year, depending on the size and complexity of the estate, and on whether there are any disputes surrounding the estate.
California requires the executor/administrator to complete probate within one year of their appointment; however, this deadline can be extended for many reasons, including if a federal estate tax is filed.
If you have waited an extended period of time for your distribution from a deceased person’s estate, you may wish to consider speaking with the executor/administrator to find out what is causing the delay. If the executor is not communicating with beneficiaries, it is crucial you consult with a skilled probate attorney about taking legal action
Need help navigating bank account beneficiary rules? Our attorneys are equipped to help.
What are some bank account beneficiary rules to be mindful of? What happens if no beneficiary is named on a bank account? Can you contest a bank account beneficiary? While it is common for such questions to arise following a loved one’s death, the answers aren’t always so simple.
With a probate attorney in your corner, you will not just be able to leave the heavy lifting up to them, but you can rest assured that if any issues arise or your rights as a beneficiary are violated, they will be able to resolve them.
Call us today to request a consultation. We are eager to connect with you.
