Bank Account Post Death

Introduction

Death is a painful moment for anybody, and it is vital to take care of legal and financial responsibilities as quickly as possible post their death.

Bank accounts are one of the most important areas that require treatment. When someone dies, their bank accounts are included in their estate. One must understand the rules and regulations while dealing with bank accounts after death.

What does bank account post death mean?

A person's bank account is included in the estate after they are deceased. This indicates that the funds in the account are vulnerable to probate. When a person is deceased, some legal procedures are followed to determine the settlement of the estate, known as the probate process. During this process, the estate executor will access the assets, pay debts, and transfer the remaining assets to the beneficiaries.

Bank account beneficiaries

There can be single or multiple beneficiaries to a bank account. The person nominated to get the funds after the owner dies is known as the beneficiary. A nominee can only receive the money if their name is mentioned. The money will be passed to the deceased person's lawful heir if no nominee is named.

If it's a self-owned bank account

In a self-owned bank account, the money is distributed to those mentioned in the deceased person's will or trust. The money will be distributed according to the state's probate laws if there is no will or trust. During the probate process, the estate executor will control the bank account.

If it's jointly-owned bank account

If the bank account is jointly owned, the money will automatically go to the account's other owner(s). This is because joint accounts come with a right of survivorship. When the account owner(s) die, then the surviving owner(s) automatically become the account owner(s). The account will not go through the probate process.

List of documents to be furnished by a nominee

If a nominee is mentioned in the bank account, the nominee must provide certain documents to claim the money. The documents required may vary depending on the bank's policies but typically include the following −

• A death certificate of the account holder

• A copy of the nominee's identity proof

• A copy of the bank account statement

• A letter of indemnity

• A copy of the nominee's PAN card (if applicable)

If they have a trust set up

The trust would own the bank account if the deceased person created one during their lifetime. The trust document will determine how the trust assets, including bank accounts, will be allocated. The trustee named in the trust document will manage and distribute the trust assets under the instructions. A trust does not require going through the probate process, so it is recommended instead of a will as it saves time and money.

If there's no will or trust set up

When a person dies without a will or trust, the state's probate rules control how their assets, including bank accounts, are distributed. These laws specify who is entitled to the assets and in what figures. The assets will be distributed first to the dead person's spouse and children. The assets may be transferred to the state if there are no living relatives.

The bank account must go through the probate process in this case. The court will appoint an administrator to handle the estate and distribute the assets following the law. Before dispersing the remaining assets to the heirs, the administrator will pay all outstanding bills and taxes.

If there's no nominee

The legal heir of the deceased account owner can receive the funds if no nominee is mentioned in the bank account. The legal heir must provide certain documents to claim the money in the account. The documents required may vary depending on the bank's policies but typically include the following:

• A death certificate of the account holder

• A copy of the legal heir's identity proof

• A copy of the will or trust (if applicable)

• A copy of the probate certificate (if applicable)

• A copy of the legal heir's PAN card (if applicable)

Conclusion

Dealing with bank accounts after their owners' deaths can be difficult. It is critical to understand the rules and regulations fully and have the appropriate documentation. If you are a nominee, be sure you have all the necessary documentation to claim the funds in the account. If you are the legal heir, be sure you have all the proper paperwork.

FAQs

Q1. What happens to a joint bank account when one of the account holders dies?

Ans. In most cases, the surviving account holder becomes the sole owner of the account. Although there might be restrictions, it's better to hire an attorney to ensure the case.

Q2. Can a beneficiary access the deceased person's bank account before probate?

Ans. No, the beneficiary is not allowed access to the deceased person's bank account. The access can be given after the probation process is complete and the assets are distributed to the beneficiaries.

Q3. Can a bank freeze a deceased person's bank account?

Ans. A bank can freeze a deceased person's bank account until the proper legal documents are presented to the bank. This is done to prevent unauthorized access to the account.