Haven Life Plus
- Get a will included
- Buy up to $3 million
- Customize with riders
When someone dies, their estate is divided up according to the will. But without a will, dividing up assets depends on the state you’re in.
When someone dies, their bank accounts are closed. Any money left in the account is granted to the beneficiary they named on the account. If no beneficiary is named, the executor of the estate is in charge of dividing it up according to the will — the legally binding document that outlines who gets the deceased’s assets after they die.
Any credit card debt or personal loan debt is paid from the deceased’s bank accounts before the account administrator takes control of any assets.
If someone dies without a will, assets and property are passed by intestate succession to their heirs. Intestate succession laws depend on the state the deceased lived, and a court appoints an administrator who divides up the assets. In most cases, a majority, or even all of the money, goes to their spouse, and the remainder is divided among their children.
To give your family plenty of support, think about taking out a life insurance policy that covers your family’s current and future financial needs. For example, a term life policy from Haven Life protects you for a set time like 10 to 30 years, and you could get a will included if you add the Haven Life Plus rider.
Most joint bank accounts come with automatic rights of survivorship, which means ownership of the account is transferred to the surviving account holder and the account will continue to function as normal. But it’s a good idea to check with your bank to make sure — some joint accounts will be frozen if one of the account owners dies.
Unless someone notifies the bank, it has no way of knowing someone has died. When the account lies dormant for too long, the bank closes it and turns the money over to the state.
You can see if the deceased had other bank accounts by searching state databases and running a search with their name. If an account comes up, you can claim it by submitting a form through the website. If they had money in a bank that no longer exists, you can contact the FDIC to find where the money went.
But you’ll need to show proof of who you are and that you’re entitled to the money.
Before the deceased’s estate is settled and their bank accounts closed, the financial institution needs documents showing proof of death and the person responsible for handling the state. In most cases that includes a death certificate, copy of the will 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 provides a letter with next steps once they receive notice of death.
Any bank account with a named beneficiary is a payable on death account. When an account owner dies, the beneficiary collects the money. There’s no probate process or lengthy waiting period. The beneficiary needs to show the financial institution a photo ID and the deceased’s death certificate.
If the beneficiary dies before the account owner, the bank releases the money to the executor of the estate who distributes it either according to the deceased’s will or state law.
Talk to a professional that specializes in estate planning to minimize issues that can arise if you become unable to care for yourself. Consider the following when you meet with a professional:
Both payable on death accounts and trusts are designed to help you avoid the probate process. But they both have notable differences.
Payable on death accounts typically list one or more primary beneficiaries. When the account holder dies, the money is split evenly between the beneficiaries. All beneficiaries have equal control over the money, so they must unanimously decide how to use the funds. If there isn’t a living beneficiary, the money automatically goes to probate.
Trusts offer more flexibility than payable on death accounts. With trusts, the account owner can list as many primary and secondary beneficiaries as they wish. Plus, they decide how and when the account is split up between heirs. To simplify the process, they can appoint a trustee who distributes the assets according to the plan.
The process should go smoothly if you’re the payable on death beneficiary. But if there are disagreements or no beneficiaries, have patience since this process could take weeks or sometimes years.
No, if you try to withdraw money from a deceased person’s account before the bank is able to close it, you could be convicted of fraud.
If you inherit a CD, there are three ways you can handle it:
If someone has a named beneficiary on their account, that person can withdraw money after the account owner dies. If not, the bank account is closed and its balance will be divided up according to the deceased’s will or the intestate succession laws of the state.
While you’re planning ahead, make sure that you’re leaving loved ones plenty of support with a life insurance policy to cover financial needs.
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