What Happens to Bank Account Funds After You Die?

What Happens to Bank Account Funds After You Die?

No matter how well you plan for the future, it is a near certainty that there will be money left in your bank account(s) after you pass away. What happens to those funds? This primarily depends on the type of account you had and how it was owned.

Solely owned account

If you were the sole owner of a bank account and the account does not have a payable-on-death beneficiary, the account will most likely to through probate. However, if it’s a relatively small amount of money, your inheritors may be able to use a simplified probate process to claim it.

Otherwise, if the account does have a payable-on-death beneficiary, then the process is simple. That beneficiary inherits the money in the account and merely needs to go to the bank with an ID and death certificate to claim the funds.

Jointly owned account

There are several types of jointly owned accounts. In most situations, the surviving co-owner automatically becomes the owner of the funds in the account, and so there is no need for those assets to be transferred through probate.

There are some exceptions to this so-called “right of survivorship.” If an elderly person adds someone’s name to his or her bank account, there may not be the same assumption of survivorship rights as there would be with a married couple starting an account together. Often, an older person adds someone else to his or her account for convenience purposes and for assistance in managing finances.

The person added to the account does become the outright owner unless there is something in writing stating otherwise. This could be subject to challenge based on the intent of the original account owner. If you do end up needing assistance with your finances, the better route would be to grant someone financial power of attorney, rather than adding that person’s name to your account.

To learn more about what happens to money in bank accounts after your death, meet with a knowledgeable Tampa estate planning lawyer at BaumannKangas Estate Law.