What Happens to Your Bank Accounts When You Pass Away?
The way you pass on the assets in your bank accounts depends mostly on how these accounts were owned. This is important information to understand as you plan for the future of your estate.
Accounts you owned by yourself may or may not have a pay on death (POD) beneficiary. If your account does not have a POD beneficiary, it will likely have to go through the probate process before any of its cash is distributed to the people who will inherit it. An exception exists if your assets are few enough to be classified as a “small estate,” at which point your beneficiaries will have less expensive options than going through the standard probate process.
Accounts that have a POD beneficiary are more simple to resolve. As soon as you pass away, the money from your account is transferred to your chosen beneficiaries, bypassing the probate process. The beneficiary simply needs to go to the bank after your death with their identification and your death certificate.
Jointly owned accounts
In the vast majority of cases, the surviving co-owner of an account automatically becomes the sole owner after the other owner’s death. The probate process is not necessary, as there is still a legal owner of the account. This is what’s known as the “right of survivorship.”
Complications may arise if you are the sole owner of an account and have added someone other than your spouse as a co-owner. Some people simply add the other name to an account for convenience, such as having a grown child write checks on your behalf. You might also want your chosen family member to have significantly easier access to your money upon your death.
Unless otherwise specified, this person will become the sole owner of your account after your death, so if you want your spouse to inherit the account, you must put it in writing in your estate plan and be careful about how you title the account.
To learn more about how you might best transfer bank account assets upon your passing, work with the experienced Tampa estate planning lawyers at BaumannKangas Estate Law.