Have you ever faced the frustrating challenge of accessing a loved one’s bank account after their passing? You’re not alone. In this episode of Absolute Trust Talk, Kirsten Howe and associate attorney Jessica Colbert break down the complexities of this process into simple, actionable steps. They explain the different types of account ownership—whether joint, trust-held, or individual—and guide you through the specific steps required to gain access to each. Plus, they debunk the common misconception that a Power of Attorney can be used after death, highlighting why it’s not only ineffective but illegal. Whether you’re managing a joint account, a trust, or an individually owned account, this episode provides the practical advice you need to navigate these tasks smoothly and avoid costly complications.
Time-stamped Show Notes:
0:00 Introduction
0:40 What happens to a decedent’s bank account after they die? The process depends on how the account was held.
2:25 In this segment, we dive into the steps you can take to legally access a loved one’s joint bank account after they pass away.
3:08 Accessing a Pay on Death (POD) account follows a process similar to joint accounts. Here’s what you need to know.
3:40 Is the bank account titled in the decedent’s trust? If so, there’s a different process you need to follow.
4:35 Now for the complicated one: The decedent owned their bank account outright. Here’s what to do.
6:00 Did you know that if the total value of the decedent’s bank account is less than $184,500, you might be able to avoid probate?
Transcript:
Hello and welcome to Absolute Trust Talk. This is our video podcast here at Absolute Trust Counsel. I’m Kirsten Howe. With me is Jessica Colbert, one of our associate attorneys. Today, we will talk about how we access a decedent’s bank account after their death. This is a very popular question. We get it a lot. Usually, it’s in the form of, “I tried to access the bank account and failed. The bank won’t let me. What do I need to do?” We get a lot of clients in that situation.
Jessica, let’s start by discussing how we access a decedent’s bank account. What happens to the bank account after the owner dies?
Well, that depends on how the owner held that account. There are many different ways an owner can hold a bank account, such as a Pay on Death account, also known as POD. The owner can own it outright alone, jointly with another person, or in a trust.
Those are very common ways for people to own bank accounts. What you can do after the decedent dies will depend on which form of ownership.
I want to get one more thing out of the way. Many of our clients assisted the decedent with this account while the decedent was alive but not very healthy because they had a Power of Attorney. That’s not going to work once our decedent has died.
Right. After the owner of the account dies, the Power of Attorney is no longer valid, and the agent under that Power of Attorney may not access those accounts anymore, and that is actually illegal. That means the agent can’t use the ATM card. They can’t write a check. They may not be able to access the account online anymore. Not only is that illegal, but it’s also a breach of their fiduciary duty as an agent. At that point, the agent has a duty to turn over all the assets to either the executor of the estate or the successor trustee if the decedent has a trust.
What you’re saying is that maybe the agent can do those things. They still have the ATM card. They could still be using it, but it’s not legal, so don’t do it.
Let’s go back to the beginning. We had several different ways that our decedent could own this account, and let’s talk about how we access each of those accounts.
First, I’ll talk about joint ownership. That’s the easiest case. In that case, there is now one joint owner who is deceased, and then the asset just belongs to the surviving owner. So, the surviving owner will go to the bank with a death certificate, and then the bank will remove the decedent’s name from the account.
That is very simple and pretty straightforward. The surviving owner continues on, and now it’s their account.
A Pay on Death account is similar. The person designated as the beneficiary of that account will go to the bank with a death certificate, and the money will be released to them. It is the same process. Just go to the bank with your death certificate. You’re going to have to show some ID. The bank’s not just going to take your word for it that you are the person named in that beneficiary designation, but that’s pretty logical. I think we all would have anticipated that you’ve got to show up with your driver’s license.
Another form of ownership is trust ownership. The decedent’s bank account is titled in the name of the decedent’s trust. This one’s another easy one. The successor trustee goes to the bank with a new certification of trust. That’s just a document where he says, “I am now the trustee of this trust, and I am the one, and here’s my taxpayer ID number.” They will get a new taxpayer ID number for this trust because we can’t use the decedent’s Social Security number anymore; that gets retired when you die. Our successor trustee shows up with certification of trust and a new taxpayer ID number, and the bank will take the money from the decedent’s account and put it into a new account for the trustee of the trust with his new taxpayer ID number. Then he goes on, and he can write checks and make deposits—all the things. So that’s another pretty straightforward one.
We got one more to tackle, Jessica.
Yes. And this last one is where it gets a little bit more complicated. This is when the owner owns the asset outright in their name alone. This means that they did not own it in a trust or have a beneficiary designation on it. If all the assets the decedent owned in its name alone total $184,500, the person named as the executor in the decedent’s will have to open a probate. They’re going to have to get the court to issue letters testamentary. The executor will then take those letters to the bank. They’ll have to get a new taxpayer identification number for the estate. They’ll take that number to the bank as well, and then they will open an account in the name of the executor as the signer on the account. This is the worst process. It takes the longest, it costs the most, and it’s a probate, and we want to try and avoid that.
Right, we don’t want probates.
Just a little embellishment: If the decedent didn’t have a will, and the same facts apply, somebody else has to open a probate. The court would appoint them as the administrator of the estate. They would be issued letters of administration, and they would do the same process. It’s just a question of did the decedent have a will. Then, they’re an executor. Didn’t have a will? Then they’re the administrator. But it’s the same process. You’ve got to get letters from the probate court. It takes a long time.
You did say, Jessica, that $184,500 is our threshold for a probate. If our decedent didn’t have $184,500 in his name, and all he had was this one bank account that we’ve been talking about, and it’s only worth $20,000, now that changes the procedure. Let’s talk about that.
Yes, then it becomes a much easier procedure. The person who is entitled to that account would either be the beneficiaries under the decedent’s will, or if the decedent didn’t have a will, the heirs entitled to it under the probate code—those people, or that person would go to the bank with what’s called a small estate affidavit. That is a document that the beneficiary or heir is signing under penalty of perjury. They claim there is no probate or need for a probate because the assets are under the $184,500 threshold. They’re declaring that they are the people entitled to that asset and that 45 days have passed since the decedent died.
That’s less burdensome than doing a probate, but you must wait 45 days. And you do have to—if there are multiple beneficiaries—you’ve got to gather them all up. Everybody has to sign it, and probably everybody has to go to the bank together. I’m not really clear on that, but I think that’s true. It’s not ideal, but it’s certainly better than a probate.
I think that we can’t always know because sometimes all you know is the decedent had a bank account, and you don’t know if there’s a Pay on Death beneficiary. But if you can figure that out—what form of ownership did we have—it’s best to know that before you go to the bank. Yes. When you go to the bank, bring whatever you need to get access to that account.
Sometimes, the person showing up wants to access the account, but they’re not the right person. They’re not equipped. They didn’t bring whatever they were supposed to bring, and the bank freezes the account. It’s a whole other fiasco trying to unwind that. So be prepared. Show up with whatever you need.
Thanks, Jessica. This was very informative. I’m sure it will be helpful to a lot of our listeners. I hope you got a lot out of it, everyone listening there, and we look forward to connecting with you next time.
Resources Related to This Episode:
- Absolute Trust Talk Episode 131: Drafting a Comprehensive Power of Attorney: What You Don’t Know CAN Hurt You https://absolutetrustcounsel.com/131-drafting-a-comprehensive-power-of-attorney-what-you-dont-know-can-hurt-you/
- Absolute Trust Talk Episode 069: What We Can (and Can’t) Do With Bank Accounts After Death https://absolutetrustcounsel.com/069-what-we-can-and-cant-do-with-bank-accounts-after-death/
- A Will is Not Enough – Securing Your Legacy with Estate Planning Life can change in an instant. A will is not enough to be prepared. Get free access to our actionable E-book Guidebook #1 and start protecting your legacy today. https://absolutetrustcounsel.com/guidebooks/
- Learn how to comfortably define gray areas and assess your own unique needs to effortlessly build a secure future now. Check out Guidebook #2, Estate Planning Beyond the Basics, here > https://absolutetrustcounsel.com/guidebooks/
- Get our free introductory guide to the most used estate planning tool, family trusts, and understand how we plan to help protect your family. Guidebook #3: https://absolutetrustcounsel.com/guidebooks/
- Absolute Trust Counsel would love to offer access to our Incapacity Planning resource page: https://AbsoluteTrustCounsel.com/Incapacity-Planning/. We’ve collected our top planning information all in one place so listeners can find videos, guidebooks, blog posts, and a host of information with tips and strategies on implementing, planning, and protecting themselves and their loved ones.
- We’re pleased to provide a library of e-books to address common estate planning questions and concerns in practical, easy-to-understand language. https://AbsoluteTrustCounsel.com/Resources/.
- ASK KIRSTEN: If you’d like Kirsten to answer your question on the air, please email her at Info@AbsoluteTrustCounsel.com.
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