Banking and Assets

When someone dies, handling everyday bank accounts and personal property can be among the most frustrating aspects of managing a loved one’s affairs. How can you make this process more streamlined for your family? Here’s an overview:

My Life & Wishes - Finances After Death

An asset is anything owned by you that has value. Examples of assets include:

  • Cash or cash equivalents: certificates of deposit, banking  accounts, money market accounts, physical cash, Treasury bills
  • Real property: land and any structure that is permanently attached to it such as a house
  • Personal property: everything that you own that is not real property such as boats, collectibles, household furnishings, jewelry, and vehicles.
  • Investments: annuities, bonds, cash value of life insurance policies, mutual funds, pensions, retirement plans 401(k), 403(b), IRA), stocks, and other investments

How Can You Help Your Family Distribute Your Financial Assets?

How assets are handled after death depends on whether or not there is a will or trust.

A trust is an agreement between the person who creates and transfers assets into the trust, called a “Grantor,” and the person who holds the assets and administers it for the beneficiaries, called a “Trustee.” After death occurs, the trustee must distribute the assets according to the instructions in the trust.

If there is no trust, but a will was created, the assets of the estate must be administered through “probate.” Probate is the court process for settling the estate of someone who died. A family member must petition to have the will admitted to the court and ask for an executor to be appointed. The executor must fulfill the legal duties set forth under state law and distribute the assets according to the instructions in the will and under the supervision of the court.

If there is no trust and no will, this is called “intestate,” which means the assets are subject to probate. Under intestacy, assets must be given to whoever is entitled to receive them under state law. Typically, a surviving spouse and descendants are the first in line. If there is no surviving spouse and no living descendants, then parents, siblings, and their descendants are typically next in line. The specific rules vary by state.

Settling Banking Accounts After Your Death

Most people have a combination of banking accounts, often at multiple financial institutions that may be out-of-state or even online. Unless the accounts are set up as joint accounts or a power of attorney has been named, family members will have a difficult time accessing the financial assets in these accounts after death occurs.

With a joint account, all control over the account goes to the remaining account holder who can continue to make payments, deposits, and changes. However, in order to remove the deceased from the account, proof of death through a valid death certificate is required.

With a traditional bank account, a single individual has sole control over the money and how it is used. When death occurs, the first consideration is that the money goes to the individual(s) indicated in the will. If no will has been made, the money in an individual bank account goes to the closest living relative or next of kin (usually a spouse, parent, or child). In order to access the account, proof of death with a valid death certificate, and proof of your relationship to the deceased through a birth certificate, a copy of the will, or an executor’s testament is required.

In a trust account, considerations have already been made for the settlement of the money following death. The trust states who will be the beneficiary of the account’s contents following the death of the primary holder. This beneficiary may be a person, a group of people, or even an organization. Proof of death through a valid death certificate is required to access the funds.

Safe deposit boxes operate in much the same way as traditional bank accounts, in that they cannot be accessed without proof of death and proof that you are the next of kin or beneficiary of the account. In some states, individuals are required to fill out a rental agreement before they can get a safety deposit box, and they will be asked to provide a list of relatives who may access the box in the event of their death. In these cases, you must comply with the rental agreement.

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