What happens to your bank account when you die

How assets are divided up depends on whether there's a will.

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When someone passes away, their estate will be divided up according to their will. But if there is no will, how everything will be divided up depends on what state you’re in.

What happens if the sole owner of an account dies?

When someone dies, their bank accounts are closed. If they have a named beneficiary on a bank account, the money will go to that person. If not, the executor of the estate will be in charge of dividing it up according to the will, which is a legally binding document that outlines who gets the deceased’s assets following their death.

If there is no will, the estate’s administrator will divide up the assets according to the intestate succession laws in the state the deceased lived. In most cases, a majority or even all of the money will go to their spouse, and the remainder will be divided up among their children.

Any credit card debt or personal loan debt will be paid from the deceased’s bank accounts before the account administrator takes control of any assets.

Required documents

Before the deceased’s estate can be settled and their bank accounts closed, the financial institution needs documents showing proof of death and who is responsible for handling the state. In most cases that will include a death certificate and a letter from the probate court naming the estate’s executor or administrator.

Contact the financial institution to start the process of settling the deceased’s bank accounts. The financial institution will provide a letter advising of the next steps once they have received notice of death.

Bottom line

If someone has a named beneficiary on their account, that person will be able to withdraw money after the account owner dies. If not, the bank account will be closed and its balance will be divided up according to the deceased’s will or the intestate succession laws of the state.

If you’re putting together a plan for your assets after you pass, use our estate planning checklist to help make sure you haven’t missed anything important.

Frequently asked questions

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