An estate checking account serves two important purposes: it holds liquidated financial assets during the probate process and provides the funds necessary to pay the estate’s debts. Opening an estate checking account is one of the first things to do after receiving an official appointment as the estate executor or administrator, and closing it is one of the last tasks to carry out after asset distribution and probate is complete.
Get an Employer Identification Number
To open a bank account and file estate taxes, you need a tax identification number for the estate. Apply online at irs.gov from Monday through Friday 7:00 a.m. to 10:00 p.m., Eastern time, to get the number immediately, or fill out and submit IRS Form SS-4. The IRS requires the deceased person’s full legal name, address, telephone number and Social Security number and your name, address, telephone number and the fiduciary title stated on the Letters of Administration document that identifies you as the appointed executor or administrator of the estate.
Basic vs. Investment Account
Choose an account type based on the size of the estate and length of time the account will remain open. According to Mary J. Randolph, J.D., a basic checking account is the right choice for an estate that will close within one year. However, for large or complex estates, a brokerage account with check-writing privileges may be a better choice. To avoid having to file a state tax return in more than one state, which could happen if you open an interest-bearing checking account and the estate earns income, make sure you open the account in the state in which the deceased person lived, even if you live in a different state.
Fill Out the Account Application
Financial institutions commonly provide the option to open an estate checking account in-person or online. Regardless, you must supply the EIN number, a certified copy of the death certificate and the court documents designating you as the estate executor. If you open the account online, you need to either mail or send the information by fax before the account can officially open.
Fund the Account
Close the deceased person's checking and savings accounts and add these funds to the estate account. Also, add funds from liquidated investment accounts, refunds, final paychecks and any miscellaneous cash or checks found at the estate. Do not liquidate and add funds with a named beneficiary to the account. Keep meticulous records, and do not mix your personal funds with those from the estate. If you ever pay an estate bill using your own funds, get a receipt, file it with the checking account paperwork and include a detailed explanation in account register to explain the reimbursement.