What Happens to a Bank Account When Someone Dies?

Taking proactive steps, such as naming beneficiaries or creating a joint account with the right of survivorship, can simplify the process for loved ones and prevent potential legal or financial hurdles.

When a person passes away, their financial affairs, including their bank accounts, are typically handled according to their estate plan or local laws.

What happens to the bank account depends on several factors, such as the type of account, its ownership structure, and whether the deceased left a will.

If the bank account is held jointly with the right of survivorship, the account usually transfers automatically to the surviving account holder(s). For instance, if a couple shares a joint checking account, the surviving spouse will generally retain full access to the account without going through legal proceedings.

For accounts designated with a payable-on-death (POD) or transfer-on-death (TOD) beneficiary, the named individual can claim the funds after presenting the appropriate documentation, such as a death certificate.

These designations bypass the probate process, making the transfer of funds quicker and more straightforward.

On the other hand, solely owned accounts without a named beneficiary usually become part of the deceased’s estate. The funds in these accounts may need to go through probate, a legal process where the court oversees the distribution of assets.

During probate, the account is frozen to prevent unauthorized access, and only the executor or administrator of the estate will have permission to manage the funds, provided the court grants them authority.

It’s important to notify the bank as soon as possible after someone’s death to avoid complications, like potentially fraudulent activity on the account. From there, the bank will provide guidance on what documents are needed to process the account, which typically includes a certified copy of the death certificate.

If you’re unsure how to plan or handle a deceased person’s account, consulting with an estate planning attorney or financial advisor can provide helpful guidance.