What Happens to Bank Accounts When You Die?

The last thing we feel like doing if we have just recently suffered a bereavement is complicated admin. Unfortunately, when someone dies, it generates a mountain of paperwork and other concerns. You may be asking yourself questions like “What happens to bank accounts when you die?” or “Can I close a bank account without a will?”. In this article, we are going to answer this question, and more.

We’d also just like to take a moment to say that, if you’ve come here looking for answers to such questions, then you may be facing a difficult time. Aura is here to help. We are the UK’s top-rated ‘Cremation Services’ provider on Trustpilot, with 4.9/5 stars. We offer our funeral services to those seeking a direct cremation for a loved one in the short-term, or for themselves in the future through one of our prepaid funeral plans.

What happens to bank accounts after someone dies?

When someone dies, and we are their next of kin, we may have a responsibility to wind down all of their previously active financial affairs. This includes closing their bank accounts. This responsibility is especially important if we are the named executor of that person’s estate in their will. It’s important to contact the bank as soon as possible to notify them of their former client’s death, as they will need to block any future scheduled payments from needlessly clearing, and also protect any remaining funds from fraud.

Once you notify the bank, they will likely freeze the account immediately, before they go through some more elaborate steps with you which will lead to the account being closed permanently.

How to notify the bank about a death

Each bank has a different procedure for handling queries relating to recently deceased customers; many have specific departments for this type of query. Today, banks are constantly trying to reduce the amount of administration and delays that result from dealing with them, so, with any luck, if you need to close a loved one’s bank account, their bank will make it easy for you.

You may or may not need to have applied for probate before the bank will entertain your request, but, it will depend on the bank itself. You will almost certainly already need to have registered the death. That’s because the bank will most likely ask you to provide a copy of the Death Certificate of the person who has died. It’s a very important legal document which officially certifies that a death has occurred, detailing the person’s cause of death, as well as other pieces of personal information, such as their name, age, and date of death. 

You will also likely need to provide the bank with proof of who you are, and how you relate to their customer, just to confirm that you’re the right person to handle these matters.

Closing a bank account after death

In order to close the account of a loved one after death, you will likely need to move out any funds, and potentially settle any outstanding debts (although, if there is no money in the estate, the debt will not transfer onto the next of kin). If you are the executor of the estate, and there are debts on the account, depending on their significance, the bank may look to claim the cost of settling them out of any remaining value in the estate. 

Conversely, if there are any funds remaining in the account, and the bank is satisfied as to the authenticity of the situation, they will begin the process of transferring any remaining funds to the next of kin. This is usually done with a simple bank transfer, once they’ve taken some details from you about where to send the money. This step is something that many families rely on in order to pay for the funeral of the person who has died, so it is important that it is done properly and quickly.

In general, the bank may need some or all of the following before being able to close the bank account, settle any debts, or transfer any remaining funds:

• The death certificate of the person who has died
• Details of your relationship with them, and proof of your identity
• A grant of probate (if your loved one died with a will and you are its executor)
• Letters of administration (if they died without a will, and you are their next of kin)
• Bank details for the purpose of sending any remaining funds onwards

Once any remaining funds have been transferred, what happens next will depend on what is contained within the will. It will be up to the executor to administer the estate of their loved one properly, and in accordance with the wishes of the person who has died. The executor can collectively decide with other family members how much, if any, of the remaining estate can be used on paying for a funeral.

What happens to joint bank accounts?

The matter of joint bank accounts is potentially simpler, especially if you yourself are one of the parties to the joint account. Any money or debt on the account is considered to be jointly owned by both parties to the account; if one of those parties dies, then full responsibility of the account will pass to the surviving holder. With that said, depending on the situation, the bank may simply allow the debt to die with the other party to the account.

However, it’s still important to notify the bank of a death, even if you are the other owner of the account. That’s because many banks will not allow the account to remain open if it is only owned by one person. In this situation, they may allow you to convert the account into a standard current account in your name, or they will simply have you close it, transferring any monies onwards to another account in your name, or having you settle any debts there from your own resources.

This solution of allowing you to simply keep any funds remaining whilst closing the account itself is a good compromise. It allows you to exercise your survivorship rights (your right to inherit fully the value of property which was co-owned and for which one of the owners has passed away) whilst at the same time allowing the bank to protect its obligations to remain a compliant and safe financial institution.

How to close a bank account without a will

Closing a bank account without a will is potentially a little bit more complicated; if a bank asks you to supply proof that you’ve been granted probate (the right to execute the estate of someone who has died), you will not be able give it, as you can’t be granted probate unless you are the named executor in a will.

However, if your loved one has died ‘intestate’, that is to say, without a will, you will still be able to apply to oversee their estate. Instead of applying for probate, you will apply for something called a ‘Grant of Letters of Administration’. It will allow you the same rights over the estate of the person who has died as probate.

Special considerations for parents’ bank accounts

When we are trying to cope with the death of a parent, facing the prospect of dealing with their administrative affairs can be very hard. The only extra thing you might want to bear in mind with closing a parent’s bank account is that it can be especially important to keep a sure record of the assets that you find, including cash reserves in their account, or any investments or bonds they may have in association with their bank. If you are the executor of their estate, you will have to provide an official ‘final account’ of their assets for inheritance-tax purposes, so it will need to be precise and carefully done.

Common issues and how to resolve them

Depending on how the funeral of the person who has died is to be paid for, delays with accessing the cash within their bank account could potentially be quite damaging. You could experience delays with receiving the rights of probate from the court, which, depending on whether any other kin or executors dispute your application, could take up to a year. And, of course, you may experience slower customer service from the bank, which could cause things to take longer than necessary.

In order to head-off delays as much as possible, make sure to have all of the paperwork that they would ask for from your side prepared in advance. You may want to start a funeral checklist in order to keep note of timeframes, and of the different pieces of paperwork you have and which you still need to acquire. It may also be a good idea to prepare as far as possible to pay for the funeral of your loved one yourself before eventually reimbursing yourself out of their estate. It’s unlikely that you will be able to pay directly out of the estate itself, as the required admin will almost certainly take longer than the time it takes for the day of their funeral to come around.

Aura in your time of need

We hope you have found this article useful, and that it has answered the question “What happens to bank accounts when you die?”. We know that the admin which relates to funeral arranging can be daunting, which is why we offer you our support. Our wonderful, compassionate Aura Angel team can act as your dedicated, personal funeral arrangers, giving you a cremation forms guide, someone well versed in funeral arranging, and able to offer you a caring ear if you’d simply like to talk about what you may be feeling. You can call us whenever you’re ready, and we’ll be able to help.