The disposition of cash accounts held by someone who has died depends on the manner in which those accounts were held. As with other types of assets owned by a deceased person, dealing with bank accounts depends on how they were owned. Read on for information on the disposition of a deceased person’s bank accounts.
If the decedent owned an account only in their name and failed to designate a POD (payable on death) beneficiary, the account will likely go to probate court. If the asset’s total value is low enough for it to be classed as a small estate, the heir and attorney Raoul J. LeClerc will use an affidavit or a simplified method to lay claim to the funds. In the mean time, the money should be transferred to an estate account.
Payable on death accounts are easy to handle, as the funds are not part of the probate estate and the executor has no jurisdiction over them. The named beneficiary can claim the funds by presenting the death certificate and their ID. Banks typically have documents on file that designate a POD beneficiary.
If the decedent and another person jointly owned a bank account, the funds go to the surviving owner in most cases. The bank account does not have to go to probate court before transfer to the survivor.
Rights of Survivorship
There are limited exceptions to the rule. Most accounts held jointly carry survivorship rights. After the death of a co-owner, the survivor automatically takes ownership of the funds. In most cases, survivorship rights are clear. However, if the registration documents only list two names and don’t mention survivorship rights or joint tenancy, the matter can become unclear. An estate attorney in Paradise, CA can help clients learn more about state laws on joint tenancy and survivorship rights.
If two people open an account jointly, no one disputes that the survivor gets the funds upon one owner’s death. However, the situation can be different if a person’s name is added to the account at a later date. It’s commonly done to keep funds out of probate, but it can create problems within families. It’s best to consult an estate attorney in Paradise, CA when settling such a dispute.