What happens to bank checking and deposit accounts when a loved one passes away? Is it a big concern for heirs? Certified Financial Planner Paul Fain joins us again to talk about your Sunday Money and 4 steps to get your accounts in order before your final day.
THIS IS POTENTIALLY A BIG DEAL – YOU HEAR ABOUT BANK ACCOUNTS BEING FROZEN AFTER A DEATH IN THE FAMILY…
Survivors who believe they can access an account often find they cannot do so because of its ownership structure.
- Individual Owner: the account is off limits until the estate is settled in court. A judge may issue a letter that grants an executor or estate administrator access.
- Payable On Death (POD). After the death (and not before), the beneficiary can claim the money by going to the bank with a death certificate and identification.
- Power of Attorney ends at the time of death.
- Joint Tenants With Rights Of Survivorship (JTWROS): a Joint Owner can still write checks because the account is held in a way that either party can sign.
WHEN SHOULD YOU NOTIFY A BANK AFTER A DEATH?
- Notify promptly, especially if other people are authorized to write checks or use an ATM.
- Fraud: Family members should never forge the signature of the deceased to pay bills or use the person’s ATM or debit card to get cash.
- Funeral Home may notify Social Security. Payments after death can’t be kept.
WHAT ARE SOME PROACTIVE STEPS TO PREVENT A FAMILY FINANCIAL CRISIS?
- Talk: understand how many accounts a person holds and where they are located.
- Simplify accounts whenever possible by consolidating them.
- Determine exactly how the account is titled while the person is still alive.
- Pre-plan your funeral, if you can. One of the main reasons people need quick access to cash is to cover the final