A party opens an estate checking account by contacting a bank or credit union and providing several documents relating to the passing of the deceased person, including a letter of administration. This letter states that an estate checking account is granted by the probate court that appointed the executor or administrator of the estate. The party will also need to complete an estate account application.
Getting a Tax Identification Number
A party needs to get a Tax Identification Number, or TIN, from the Internal Revenue Service for the estate. A TIN is also called an Employer Identification Number. In order to be issued the TIN, he must complete Form SS-4, Application for Employer Identification Number. The party can download the form from the IRS’s website, get a paper form from a Social Security office or post office, or call the IRS to get the number immediately. A party who calls must complete the form later.
What Other Information Do I Need?
A party may be asked for the deceased person’s Social Security number, his identifying information and relationship to the deceased person, the deceased person’s date of death, the death certificate and the contact information (name, address and phone number) of the executor or administrator of the estate. She may also be asked for the contact information of the attorney for the estate. In addition, the party may be asked to provide the account numbers for the deceased person’s other accounts.
When an Estate Is Small
When an estate is less than a certain amount, a bank may request a properly executed small estate affidavit or court order to open an estate checking account. Each state has different laws as to what constitutes a small amount. In California, an estate is small if it is $150,000, or less, and the value of the property is based on what it was worth on the date of death.
Why Open an Estate Checking Account?
A party opens an estate checking account after the death of a loved one to write checks that will pay the deceased person’s final bills and court costs. The remainder of the money goes to beneficiaries. The process of probate, the official proving of a will to be valid, usually takes a year to complete.
The party should look for an estate checking account that allows her to write an appropriate number of checks to pay debts and expenses. If the account will hold a substantial amount of money, she should look for an account that pays interest.
What About Investment Accounts?
If the estate will remain open for a long time, it's a good idea to apply for an account that contains investments and cash. The party should look for a company that combines brokerage and cash accounts and lets him write checks. Such an account simplifies record keeping since transactions appear on one statement.
Accounts That Earn Money Pay Taxes
Estate checking accounts that earn money must pay state taxes. If a party opens an account in a state in which she does not live, she has to file a state tax return for the estate there.
Read More: How to Close an Estate Account
What Is a Payable-On-Death Account?
Balances in payable-on-death accounts and joint tenancy accounts are not included in the estate checking account. A payable-on-death account, or POD, is also called an In Trust For account, and goes directly to the named beneficiary on the account. It is not part of the estate. A joint tenancy account goes to the surviving joint owner of the account.
- Navy Federal Credit Union: Estate Accounts
- Chase Bank: Estate Services
- Wells Fargo: Estate Care Center
- Bank of America: How to Notify Bank of America When a Customer Passes Away
- Key Bank: Do I Need an Estate Account?
- California Courts: Simplified Procedures to Transfer an Estate
- Wells Fargo: What to Do When a Loved One Passes Away
- IRS: Apply For an Employer Identification Number (EIN) Online
Jessica Zimmer is a journalist and attorney based in northern California. She has practiced in a wide variety of fields, including criminal defense, property law, immigration, employment law, and family law.