Whether you are a relative, beneficiary, or executor of an estate, you may need to know how to claim deceased bank accounts without probate. Generally, the process to claim a deceased person’s bank account is straightforward if there are clearly defined payable-on-death beneficiaries or a joint account owner, but occasionally, there may be no beneficiaries listed, or contradictory documents may contest them.
Bank Accounts and Beneficiaries
Most checking and savings accounts offer a transfer-on-death or payable-on-death option. When the account owner dies, the beneficiary receives the money in the bank account. Direct transfers of money from an account owner to a beneficiary bypass the probate process. The bank handles the transfer.
In California, an account holder should complete a Totten trust document. A Totten Trust is a payable-on-death account with a named beneficiary. When the account owner dies, the contents of the Totten Trust automatically pass to the beneficiary.
If the bank account lacks a joint owner or named beneficiaries, it becomes part of the deceased person’s estate and goes through probate. The probate court will oversee the distribution of assets, either following the instructions in the deceased person’s will or intestate succession laws if there is no will.
Update your beneficiaries on your accounts regularly; a death, birth, marriage, or divorce in the family is an excellent trigger to go through these accounts and ensure they are current. In most cases, a beneficiary designation on a bank account will supersede a will.
Joint Ownership of a Bank Account
Joint owners of a bank account have an equal claim to the money. When one joint owner dies, the other joint owner typically retains ownership of the account and can withdraw funds from it pursuant to the right of survivorship.
The surviving owner of a joint bank account retains ownership over the entire account balance, no matter how much money they contribute to it. The account does not go through probate and is not considered to be part of the deceased person’s estate. This means that the funds in a joint account are not used to satisfy a deceased person’s debts.
To confirm that they are now the sole owners of a joint account, the surviving owner must provide the bank with a death certificate or other documentation. After this, the account owner may remove the deceased person’s name from the account or open a new individual account.
When all the joint owners of a bank account are deceased, the account funds will pass to the beneficiaries.
Check with your bank to see if they will allow immediate access to the account after the account owner’s death.
Claiming a Bank Account
A bank account is only accessible to the beneficiaries or the joint owner of the account. If the account lacks named beneficiaries and is not jointly owned, it will become part of the deceased person’s estate; only the executor or estate administrator will be able to access it. The court will require proof from the executor and a certified copy of the death certificate before it will grant access to the bank account.
To claim a bank account, you will need documentation to inform the bank of the account holder’s death and confirm your identity. To verify the account holder’s death, bring a copy of the death certificate, the account holder’s social security number, and any documents provided by the court. Bring a government-issued ID, such as a driver’s license, to prove your identity.
Depending on your relationship to the account holder, the bank may require additional legal documents.
Finding Unclaimed Bank Accounts
Over their lifetime, many people open multiple bank accounts, sometimes in different cities and banks. The bank may charge inactive account fees if the funds in a bank account remain unclaimed. State law requires the banks to turn over unused accounts to the state after a specified period. The state lists these accounts in an unclaimed account database. Eventually, the state will receive the unclaimed funds through escheatment.
Contesting a Beneficiary
If you believe that an account beneficiary is not who the account holder intended and you have a financial interest in the account, you may contest the beneficiary.
Potential grounds for contesting a beneficiary may include:
- Lack of capacity due to dementia, brain injury, or impairment
- Exposure to or vulnerability to undue influence
- A paperwork error occurred during the beneficiary designation process
- Fraudulent behavior or forgery
If you need assistance contesting the beneficiaries on an account or accessing a loved one’s accounts, contact your attorney.
A comprehensive estate plan can help ensure that your loved ones will receive the funds in your accounts as you intended. Work with your estate attorney to verify that your will, trust documents, and beneficiaries are up to date.
You can schedule a call with us or reach us directly at 855.631.3457 to learn more about how to best plan today to protect those most important to you.