How Long Can You Leave a Decedent's Bank Accounts Open?

In many cases, an account can't be closed until the estate is settled in probate court.

In many cases, an account can't be closed until the estate is settled in probate court.

While death is certain, the fate of a decedent's bank account is not. While certain bank accounts are closed immediately upon death, others must remain open for months or even years as the estate awaits settlement in probate court. Co-ownership of a bank account also affects the timing of how long the account can stay open.

Probate Process

Typically, the belongings -- including funds in a bank account -- of a person who dies pass to beneficiaries through the probate process. The estate must be settled in a court proceeding before the account can be closed. However, the executor might have the ability to access funds in the account to pay last expenses, like funeral costs. This is accomplished by the executor filing with the probate court letters testamentary proving her legal authority to pay bills, file tax returns, manage assets, open accounts and close accounts.

Bank Requirements

The bank might require a certain protocol to be followed before an account can be closed. For example, you might have to file a copy of a death certificate with the bank. Some banks might require an original death certificate. A personal representative can close an account after she receives a tax identification number, but doing so can trigger early withdrawal penalties with some accounts. To remedy this problem, a personal representative can change the name of the bank account to her own name without actually closing the account.

Joint Accounts

If the spouse or another person had a joint account with the decedent, she may be able to keep using the account after death. However, some states only allow the surviving spouse to take a certain portion of funds from the account. For example, Connecticut allows a joint account owner to withdraw up to 75 percent of the funds, and the amount withdrawn can still be included as part of the decedent's estate for estate tax purposes. Re-titling the joint account into a single account may require proof of death.

Small Estates

State probate codes might allow small estates to skip the longer probate process. In order to qualify, the estate must be under a certain value stipulated by the law of the state. In these circumstances, a spouse or next of kin might have to sign an affidavit stating that the funeral expenses and other debts have been paid. Then, the judge will confirm that no other probate proceedings have commenced and authorize a specified individual to transfer personal property, including funds in the bank account.

Payable-on-Death Accounts

If the decedent established a payable-on-death account, the money will transfer automatically. This type of account permits a person to use the funds in the account at his discretion during his lifetime, with the remaining balance to be transferred when he dies to his named beneficiary. Such accounts are not passed under a person's last will and testament and are, therefore, immune from probate court.

About the Author

Samantha Kemp is a lawyer for a general practice firm. She has been writing professionally since 2009. Her articles focus on legal issues, personal finance, business and education. Kemp acquired her JD from the University of Arkansas School of Law. She also has degrees in economics and business and teaching.

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