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From the Bankrate.com What happens to a bank account when someone dies?
Written by Karen Bennet

Published Sept 16, 2020

This article addresses questions relating to…

1. What if you’re a signer on a joint account?
2. What if the decedent account holder did not name a Payable on Death or Transferable on Death designee?
3. What happens in the event of a joint account?
4. What happens if there is no will?

Article Summary

After a person dies, bank accounts must be managed carefully, and the process depends on how the accounts were set up. For accounts with named beneficiaries, the executor may not need to get involved, as the funds transfer directly to the beneficiary with a death certificate and ID. Joint accounts with rights of survivorship pass automatically to the surviving owner, although the executor should confirm the account structure and verify FDIC insurance coverage adjustments.

Accounts without beneficiaries or joint owners go through probate, where the executor or court-appointed administrator is responsible for managing and distributing the funds. The executor collects payments due to the estate, pays any outstanding debts, and ensures that remaining money is distributed according to the decedent’s will or state inheritance laws. This process can take months, depending on creditor claims, the size of the estate, and any court requirements.

Executors may also need to provide the bank with official documentation, such as letters testamentary, before they can access funds. Banks usually learn of a death from family members or government notifications, but this is not automatic, so the executor must initiate contact and provide necessary verification.

Executors must keep careful records of all accounts, manage any income or interest received after death, and coordinate with the probate court as required. In the case of minor beneficiaries or trusts, the executor or trustee may need to oversee the temporary management of funds until legal conditions are met.

Overall, executors play a critical role in ensuring that all bank accounts are properly collected, debts are paid, and remaining funds are distributed according to legal requirements, while maintaining accurate records and complying with court supervision.