:max_bytes(150000):strip_icc()/checkingacctafterdeath-composed-b3938060e25849b885bba3e73b9ade05.jpg "What Happens to Your Checking Account When You Die?")
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Key Takeaways
- If you have a joint checking account, the joint account holder typically takes over the account and has immediate access to the funds after providing proof of your death to the bank.
- If you have an individual account, the funds may go to your beneficiary or the executor of your estate to distribute the funds.
- Without a joint account holder, beneficiary, or executor named in your will, the account goes to probate court, where the court may handle the distribution of the funds.
After you pass away, the ownership of your checking account may pass to the joint account holder if you listed one. If there’s no joint account holder, but you listed a beneficiary, they would receive the funds.
However, if you have no joint account holder or beneficiary, the account will likely get transferred to probate court or the executor of your estate, as outlined in your will. However, it can get more complicated, since there are various types of ownership. Read on to understand the scenarios that can determine what happens to the funds in your checking account after you pass away.
What Happens Immediately After Death
Ideally, family members should contact the bank to inform them of your death and provide a death certificate and your Social Security number. When the death is registered, the bank can confirm the death and freeze the account or transfer ownership to a joint beneficiary.
If the deceased was receiving Social Security benefits and a funeral home was involved in making the arrangements, the funeral director typically notifies the Social Security Administration (SSA) to stop the benefits.
Once notified, the bank may inform beneficiaries or family members of the next steps, depending on the type of checking account involved.
Individual Checking Account
If you’re the only one listed on a checking account and you die, several things could happen. If you’ve named a beneficiary, someone who will inherit the funds in the account, they can receive the money once they’ve provided proof of your death to the bank.
Without a joint account holder or beneficiary, the process can get more complicated. The executor of your estate named in your will may handle the account and access the funds once your estate has gone through probate.
However, if you didn’t list a beneficiary and don’t have a will, the account becomes part of your overall estate. During probate, the court will determine how to distribute your assets, including the money in your checking account.
Joint Checking Account
If you share a checking account with a joint account holder, they typically have the right of survivorship. This arrangement means that upon your death, the account automatically becomes the sole property of the joint account holder. Typically, they need to provide proof of death to the bank so that the bank can update the account records.
Establishing your account as a joint checking account can be an easy way to manage your finances after your passing, since it avoids the need to designate a beneficiary, someone who inherits the funds, for the account. Instead, the joint account holder has access to all the funds and can manage the account going forward.
Note
If you’ve listed your child as a joint account holder and they’re not yet an adult, they may be unable to access the funds until they legally become an adult, usually at age 18 or 21. Until that time, a legal guardian will likely manage the account.
When Someone Dies Without a Will
Things get tricky if someone dies without a joint account owner or beneficiary. Remember, if you select a beneficiary, they can submit a death certificate and receive a payout upon your death unless there’s a joint account holder. Without an account owner, beneficiary, or executor, the account moves to probate court, which decides the distribution of funds. During the probate process, the checking account is frozen.
Other Special Cases
If you die and have unresolved debts and have a joint checking account, creditors cannot go after the other joint account holder to pay the debt. Instead, the funds become theirs. If you didn’t have a joint account, your debts get paid using your assets during probate. Then, if you specified a beneficiary, they would receive the remaining funds.
If your checking account is overdrawn at the time of your death and you have a joint account holder, they’ll be responsible for paying the overdraft. If your account is overdrawn and you have listed a beneficiary, they would not be responsible for settling the account, as it has no funds.
Note
What happens to a business checking account after the owner passes away depends on the structure of the business. The account may become part of your estate, the property of the new owners, or your business partner may have the power to determine what happens to it.
The Bottom Line
Preparation and planning can help your heirs and loved ones handle your financial affairs more smoothly after you pass away. If you want to leave the account to someone, making them a joint account holder can provide them with easier access to the funds. Otherwise, designating a beneficiary can help distribute your money more smoothly while avoiding probate.
