As an executor or authorized member of a loved one’s estate, you’ll be tasked with closing their bank accounts. If there’s no will or estate plan, a spouse or partner, close family member, or significant beneficiary of the estate will be designated as a court-appointed administrator. Before connecting with your loved one’s bank, you’ll need verifiable proof of your authority to manage the deceased’s assets.
Closing a Single Holder Account
Each bank has its own rules regarding the closure of an account. In most cases, you’ll need to provide a bank with a copy of the death certificate and proof of authorization.
- Bring a copy of the will, or documentation from the probate court, that appointed you as the executor to the bank.
- Typically, banks will not close an account until the estate has gone through probate.
In the event your loved one did not have a legally acceptable will, you’ll need to seek permission from the court to close a bank account. Upon granting your request, the court will issue a document called a “Letters of Administration.” This document, along with your valid ID, is sufficient proof of authorization for a bank to close an account.
Closing a Joint Account
Unlike the requirements to close a single-holder bank account, the surviving owner of a joint account has authorization to close the account. There’s no obligation to present a death certificate or special court drafted paperwork. A valid ID from the joint account owner is all that’s required.
- Joint accounts must have a zero balance in order to be closed. You will need to withdraw the funds as cash, or transfer the balance to another account before you can close the account.
- Prior to closing an account (checking or savings), you must cancel all automatic payments affiliated with the account.
- Banks may charge a fee if payments are posted after an account has been closed.
Opening a New Account
Once a bank has been notified of your loved one’s passing, the deceased’s account will be frozen. Next, you’ll need to open a new account in the name of the estate. Upon opening this account, you’ll transfer all funds from the old account to the new one.
- To open the new account, you’ll need a taxpayer ID number from the Internal Revenue Service (IRS).
- Use IRS Form SS-4, Application for Employer Identification Number. We understand you’re not an employer, but this is the correct form.
- Example account naming nomenclature:
- “Estate of ‘Loved One’, Deceased, by Your Name, Executor”
The new estate account will be used to collect cash, settle debts and outstanding bills, pay taxes, and finally transfer funds to any beneficiaries.
In some states a “small estate” provides beneficiaries with the option of using a simplified probate procedure. The definition of a small estate depends on state law (from a few thousand dollars in some states, to no more than $166,250 in California), but typically, a beneficiary can prepare a sworn statement asserting they’re entitled to funds in a bank account under the deceased’s will or state law. A bank should release applicable funds upon receipt of the out-of-court affidavit.
- If a small estate fits your situation, contact your local probate court to request details on its small estate qualifications.
- Many states require notarization of the small estate affidavit for it to be valid.
California Small Estate Example:
As stated by the California Courts, “It can be difficult to figure out whether you can use a simplified informal process to transfer property. In addition to assets that already have a designated beneficiary (like a life insurance or a bank account), estates with a value of $166,250 or less may qualify for a non-formal probate case. Also, if you were married to, or in a registered domestic partnership with, the decedent, you may be able to follow a simple process to have your property rights determined.”
- California’s small estate affidavit, also known as a “Petition to Determine Succession to Real Property,” is used by beneficiaries to an estate where a loved one (the “decedent”) did not make a will.
- If a minimum of 40 days have passed from your loved one’s death, and no one has opened up a probate proceeding, a small estate affidavit can be used to transfer personal property such as bank accounts.
HereToday suggests you connect with a probate attorney when considering a small estate option.
Disclaimer. HereToday is not a legal service. This content should not be taken as legal advice. Before drafting any legal document, please consult an attorney.