After a person dies, their bank account does not simply freeze in place while the estate waits to be settled by the courts.
Standing orders tied to cellphone bills, utilities, rent, and mortgage payments can continue drawing from the account until the bank receives an official death certificate.
Streaming subscriptions from services such as Apple TV and Netflix also keep billing until the financial institution is formally notified and moves to freeze the account.
The speed at which this happens depends almost entirely on the efficiency of the estate’s executor, which can vary considerably from case to case.
Beyond recurring bills, other costs pile on quickly, including credit card debts, overdraft fees, loan interest, funeral expenses, unpaid taxes, and estate administration fees.
A few hundred dollars here and there in ongoing charges can accumulate into thousands of dollars within just weeks of a person’s passing.
A decline of $7,000 over a six-week period is not something that should be ignored by an executor or administrator of an estate.
As an executor or administrator, you are legally entitled to a full accounting of the assets that pass through probate, and banks are obligated to cooperate.
If a bank refuses to comply, the appropriate steps include consulting the attorney handling the estate or petitioning the probate court directly for assistance.
The Social Security Administration typically moves quickly to notify financial institutions when a benefits recipient dies, prompting the agency to claw back any funds already deposited.
If the deceased had someone carrying out power of attorney duties, those powers expire immediately at the moment of death, and any withdrawals made after that point are illegal.
To access the deceased’s accounts, the executor or administrator must present court-ordered letters testamentary or letters of administration to the financial institution.
“If there’s no co-owner, the next question is whether there is a beneficiary or payable-on-death designation,” according to guidance cited in the matter.
“If there is a beneficiary, that person would take a death certificate to the bank and fill out some paperwork,” allowing the transfer to occur outside of probate entirely.
“If these do not apply, then the bank will require a probate court order to access the account,” at which point letters testamentary become necessary.
Anyone suspecting financial impropriety should speak directly with a branch manager and request a written accounting of the account balance and all recent transactions.
Complaints can also be filed with the Consumer Financial Protection Bureau or a state banking regulator if the bank fails to provide satisfactory answers.
Executors may also consider filing a small-estate affidavit or pursuing summary probate, which is typically faster and less expensive than the full probate process.
Many states allow estates valued between $50,000 and $150,000 to qualify for small-estate probate, making it an accessible option for many families navigating this difficult process.
