How to Close Bank Accounts After a Death

A family member or legal representative needs to contact the bank as soon as possible about the account holder's death. The bank also needs a copy of the official death certificate, which you can send in person or by fax. The bank will keep a copy of the certificate on file in case beneficiaries come calling for the funds.

The beneficiary needs to show the bank a filed Letter of Appointment for the executor of the estate, or an Affidavit of Distribution of Property. They can ask the bank for the inheritance or to close the account, but the bank won't budge without seeing one of those official papers. If the deceased shared the account with another person, like a spouse or sibling, no paperwork is required. Once all the funds are gone, the account is officially closed.

Withdrawals are frozen as soon as the bank knows of the death. There is no such hold on deposits. No one but the account holder or his legally appointed executor or trustee can get the money, so it's safe there until the account is closed. In some cases, the deceased may have received regular electronic deposits such as government benefits like disability or social security. The family should inform the agency in question to stop the payments, or they will continue until the account is officially closed. This can result in payments that must be returned and a lot of unnecessary red tape.

Banks won't close checking accounts set up to deliver automated payments. If they did, the debtor would default on her debt and the creditor wouldn't get the payments due. However, these automated payments can reanimate a closed account. The payments will keep going out, which can leave the surviving family with even more financial issues to clean up. Check the deceased's past account statements and look for automatic monthly payments. If you see any, you'll have to notify the creditor and make new arrangements for payment.