What Happens to a Bank Account When Someone Dies Without a Will?


dead persons bank account

People cringe at the mention of the word “death.” No one wants to talk about their death, forgetting that one day, everyone will close their eyes forever. Yet, as we know, death is inevitable, like taxes, and in preparation for death or incapacitation, individuals often create an estate plan. An estate plan usually comes with writing a will, setting up a trust, and other important estate planning documents to ensure that one’s assets are well shared and managed upon their death. But what if an individual fails to create a will? What do you think will happen to their bank account?

If an individual dies without writing a will, the money in their bank account will be passed to the designated beneficiary or POD for the account. Things get more complex if someone dies without a will and fails to name a beneficiary or POD.

When an individual dies, he leaves all that he owns behind. His luxurious cars, huge mansions, the megabuck he has stashed in different banks, investments, etc., will live on. Of course, these assets won’t lay fallow because their owner is dead. They will have to be transferred to someone else. If the decedent wrote a will, his cars, houses, and other assets would be shared based on the content of the will. However, if he doesn’t, what happens? What do you think will happen to his cars, houses, and most importantly, his bank account? You’ll have to read on to find out.

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What Happens to a Bank Account When Someone Dies Without a Will?

Like taxes, death is inevitable. Because of this, you must always be prepared, and what better way to do that than contact a competent estate planning attorney and plan your estate.

Creating an estate plan, which usually involves drafting a will, is the best way to ensure that your loved ones and yourself are well protected. For instance, if you become incapacitated, your estate plan will ensure that you are catered to base on your wishes. In addition, you’ll be provided with a power of attorney (the one you designated) who will make those critical health care and financial decisions on your behalf.

Also, should you kick the bucket along the way, your will is there to ensure that your loved ones are well taken care of based on your wishes.

Dying Without a Will:

Because a will plays an essential role in the sharing and managing of an individual’s assets, dying without a will could make things very difficult for one’s loved ones. If you have a loved one who passed on without a will, you might be eager to know what happens next.

What happens to his cars, houses, and even his bank account? Before I reveal what happens next, let us take a brief look at what a will is.

What Is a Will?

A will is an important estate planning documents. This legal document contains the wishes of an estate owner, the name of his beneficiaries, the assets he owns, including the name of his estate executor.

For instance, if the testator (owner of the will) wants his son to inherit his business, he’ll have to put it in his will for his wish to be valid. Whatever he wants to happen to his assets post his death has to be documented in his will.

That said, what do you think will happen to such an individual’s bank account if he dies without creating a will?

What Happens?

If an individual dies without a will, the money in their bank account will still be transferred to the designated beneficiary or Payable on death for the account. On the flip side, things get more complex if someone dies without creating a will and naming a beneficiary or POD.

The estate executor is generally charged with handling any assets the decedent owns, including money in bank accounts. If there is no will to designate an executor, the state will appoint an administrator according to the local law. The administrator has to use the funds in the account to settle any of the estate’s creditors and then share the remaining based on local inheritance laws.

In most states, a huge portion of the money, of entire funds, will be transferred to the decedent’s spouse and children.

What Happens to a Joint Account When Someone Dies?

Most joint bank accounts come with automatic rights of survivorship. In a nutshell, if one of the signers on the account dies, the remaining signer (or signers) keeps ownership of the money in the account. That means that the surviving account owner can keep using the account, including the funds, without any issues.

Worthy to note that the death of an account holder can affect the insurance on an account. The Federal Deposit Insurance Corp. will keep on insuring an account as if the deceased is alive for six months after their passing. Once that time passes, the FDIC coverage ends. Joint accounts can receive up to $500,000 in protection. But, that amount will return to the $250,000 in protection applicable to individual accounts if one of the joint account holders passes on.

Nevertheless, if you are a signer on a joint account, it makes sense to check with your bank to ensure that the account has automatic rights of survivorship. Some banks will freeze joint accounts if one of the signers passes, which could be an issue if you depend on the account for day-to-day spending.

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Can You Withdraw Money from a Deceased Person’s Bank Account?

Losing a loved one can be very sad and trying, while dealing with life after the individual’s demise is more complicated. People often find it hard to come to terms with the fact that they wouldn’t see the loved one again. The heartbreak of a loved one’s demise can leave a hole in a family, especially if they are the breadwinner. When a breadwinner dies, there is always the need to pass on their wealth to the right beneficiaries. There is also the need to have access to their personal belongings. But does this include their bank account? Can you access a deceased’s bank account?

You cannot withdraw money from a deceased account without due process. The only legal way to access money owned by a deceased individual is to administer their estate and apply for a Grant of Probate. This process is regarded as probate.

If you lost a loved one and wish to access their bank account, you must follow due process. You can as well speak to an attorney for more insights.

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