How to handle the bank account after someone dies

bank imageAfter someone dies, do not rush out to close their bank account right away. As the person, winding up their affairs, it will make your life much easier. Many financial transactions are auto deposited into a bank account and it will be easier if the account is open to receive these funds. In addition, some companies will want a refund for monies given and will debit (take back) the money automatically, making your job easier. You WILL need to notify the bank by bringing in an original death certificate, which they usually only photocopy for their records. Wait a few weeks if you can until you are clear who needs what money.

Especially if the person who passed away was elderly, you could have the following issues for transactions that are auto deposited:

  • If a person’s monthly social security was already auto deposited before their death, social security will automatically take back the amount the person received that month. This can take up to 30 days.
  • There might be outstanding long term care benefits or health insurance reimbursements due and the estate will certainly want that money. Make it easy for them to give it you.
  • Sometimes pensions are paid at the beginning of the month for the previous month and the estate will receive the prorated amount based on the number of days a person was alive in the month.

Dealing with the bank is probably one of the touchiest issues of closing down an estate. We can certainly understand it shouldn’t be easy as no one wants financial fraud to occur. But it also shouldn’t be a nightmare.

So what should you do? While the person whose estate you will  be overseeing is still alive and has capacity, take them into the bank and have a conversation with the banker. Understand how the account in question is legally titled and ask what will happen upon death. Having this knowledge, and making any changes while the person is alive, could save you time and aggravation later.

Let us know your experience!

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