What happens to bank accounts when someone dies?
Posted on 11th May 2021
When someone dies, a personal representative (PR) is appointed to manage their estate (money, property, and possessions). If the PR is named in their Will, they are known as the executor. Part of a PR’s role is to close any bank accounts, but sometimes this isn’t straightforward and there can be several challenges.
Finding bank account details
When someone dies, their PR will often have to look through their paperwork for bank statements. This might be straightforward if the person was organised but if not, this could be a confusing and time-consuming job. As more people use online banking paper bank statements simply might not exist.
Without a clear picture of the assets held by someone who has died, a financial assets search might be needed.
How to close bank accounts
Assuming the information can be found, the next step is for the PR to contact banks where accounts are held to notify them of the death. The bank will need to see a death certificate. A PR can:
contact each bank individually
sign up to the Death Notification Service, which is a free service to notify all the financial institutions at the same time.
To use the Death Notification Service the full details of the person who has died will be needed, including their full name, usual address, date of birth and date of death. The organisations where they have assets will need to be known but account numbers aren’t needed.
Even before probate is granted it is possible to close accounts, depending on their balance. Each organisation will have its own limit so the PR will need to contact each of them to find out what’s needed and to obtain a form to sign in most cases.
Accessing bank accounts
Money cannot be taken from a bank account belonging to someone who has died, even if you have powers of attorney and could access the accounts when they were alive.
Once the bank is notified of the death, the account will be frozen, including direct debits or standing orders for regular utility bills, for example. Organisations that receive these payments will need to be contacted so that they know why the payments have stopped.
Where probate is needed to close an account, it can be used for certain payments:
for the funeral, the bank will pay the undertaker directly when you provide a copy of the invoice
Joint bank accounts
Normally, when one account holder dies, the funds in a joint account will automatically pass to the surviving account holder.
The surviving account holder must provide the bank or building society with the death certificate and the account will be transferred into their name.
However, if joint account holders have signed a declaration of trust stating that the account is held as ‘tenants in common’, then when one account holder dies their share will pass under the terms of their Will or rules of intestacy.
Having a clear and valid Will in place at the time of your death can simplify everything for your executors.
If you don’t yet have a Will in place or are considering changing your Will please get in touch.
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