The financial accounts of a decedent, such as bank and investment accounts, can be difficult to manage. Since the property is in her name, obtaining control of the decedent’s assets so you can settle her debts and distribute what remains to her beneficiaries can be difficult. The deceased might have granted someone a power of attorney, or the ability to legally act on her behalf with regard to her property. However, most powers of attorney terminate upon the death of the person who empowered the agent. How you can close a deceased person’s account depends on the characteristics of the account.
Review the probate code of the state where the decedent’s estate is located. Probate is the court-managed process used to distribute a decedent’s assets. Since probate can be a time-consuming and expensive process, people often prepare their estates so that certain assets are excluded from the process. Generally, property that goes through probate consists of assets that are in the sole name of the decedent, such as real estate or financial accounts. Check the appropriate state’s probate code to ensure the account you want to close is included in the probate estate.
Selection of Executor
Determine the identity of the executor of the estate. During probate, the court will appoint an executor or personal representative to oversee the day-to-day process of managing the estate and distributing its assets. This person will have the authority to close a decedent’s accounts. If the decedent left a valid will that is approved by the probate court, the document will generally identify the person the decedent wanted to oversee the estate and she will have the authority to close the account. If there is no valid will or an executor is not named, the court will appoint a person to oversee the estate. Generally, the court will choose a close relative. If no executor has been named, apply to the court to be chosen. Each court has a different procedure for the application process, so consider consulting the clerk of court to determine what you need to do to apply.
Read More: Can an Executor of a Will Close a Bank Account?
Closing Account as Executor
Call ahead to the financial institution that has the account and ask what materials you need to close the decedent’s account as an executor. Financial institutions have their own procedures for closing a decedent’s account so calling ahead will minimize time spent and confusion during the process. Go to the financial institution with a copy of the decedent’s death certificate, documents demonstrating you are the executor, personal identification and any other materials required. Follow the process defined by the bank.
A joint account is one that allows multiple people to have access to the funds and assets. Since it is co-owned, a joint account is generally exempt from the probate estate. With a joint account, all named individuals with access have the right to withdraw the funds without the other owner’s permission. As a result, if you have access to the account, all you need to do to close it and simply withdraw the funds.
A payable-on-death, or transferable-on-death account for non-bank accounts, automatically terminates when the account holder dies. Per the guidelines established by the decedent prior to her death, the contents of the account transfer to a named beneficiary and once the transfer takes place, the account closes. The process is automatic, so you do not have to take any additional steps.
John Cromwell specializes in financial, legal and small business issues. Cromwell holds a bachelor's and master's degree in accounting, as well as a Juris Doctor. He is currently a co-founder of two businesses.