What happens to a Bank Account if Someone Dies?

Losing a loved one brings grief and challenges. One of these challenges is likely to involve finances, especially if you hold any joint accounts. We take a look at how a deceased person’s estate is handled.

It can be heartbreaking when a loved one dies, and the added burden of arranging their affairs can add considerable weight to the emotional load. When it comes to the financial aspect of this, there are certain steps that need to be taken, such as notifying financial institutions of the news. If you have joint banking accounts with the person who has passed away, this can complicate matters, especially if you are not the primary account holder.

So let’s take a close look at what happens next.

When someone dies, what happens to their finances?

When someone dies, their affairs are usually dealt with by those appointed as an executor of their will – assuming they have left a legally valid will. The executor will contact any relevant bodies involved with winding up a person’s estate. This involves any banks where the late person had accounts, loans or credit cards.

If there’s no will in place then the person is said to have died ‘intestate’. If you were married to the person or in a de facto relationship, the process could be fairly straight forward, but if things are a little more complicated then you might need some help. You might want to check with your local public trustee office or seek some help from a solicitor.

You’ll have to take steps to show any bank that you’re entitled to deal with the dead person’s affairs. In the absence of a will, that means you will usually have to obtain letters of administration.

When do you need to notify a bank when someone dies?

The advice from a number of banks is that it’s a good idea to call the deceased person’s financial institution as soon as you can. This could be you notifying the bank, or the person handling the deceased estate. Many financial institutions have specialist departments that help people through this period.

If you are notifying the bank, you may need the deceased person’s death certificate, and other identity documents to show your relationship with that person. You will also likely need to have on hand the details of who is managing the estate, whether that be the executor of their will, a legal representative who is managing the estate or details of the public trustee.

However, keep in mind that notifying the bank will likely change the way some banking accounts can be accessed and operated. If you have joint bank accounts or credit cards, make sure you understand what happens and if you will be able to access the funds that you need.

How do banks handle a deceased estate?

Check with each bank where a person had accounts to see what information they require, such as certified copies of the death certificate. If the information isn’t readily available on a bank’s website, you can call and ask for help, or drop into a local branch, if the bank has one.

All debts will need to be settled before a bank can release any remaining money to a legal representative, though they may be able to release some money early to help cover any funeral costs.

While any debits from an account will be stopped, it should still be able to accept any credit payments, so it’s a good idea to keep the account open while their financial affairs are being finalised. It is possible that payments will need to be made to the deceased’s accounts in the months following their passing. That could cause issues if you had any regular payments from the credit card, such as for bills, insurance payments or other essentials. You’ll need to talk to the bank to see what options are available to you to maintain any payments.

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What if I had joint bank accounts with the person who died?

If you’re a joint account holder with the person who died, your bank will usually change the account’s ownership into your name.

Changing the ownership means that you can keep any money in the account and can keep using the account. If there are regular payments coming out of the account, these won’t change.

If you’re an additional cardholder with the deceased, you typically won’t be able to use the credit/debit card attached to that account. However, once the account’s ownership has been transferred to your name, you’ll be able to apply for a new card.

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Make things easier: why it’s important to plan ahead

While banks and other financial institutions aim to do all they can to help you deal with the financial affairs of a person who’s died, there are things that can be done beforehand that can make the whole process much easier.

The process is usually much more straightforward if the person puts clear instructions in place in advance, before they pass. That’s why it’s important to have an up-to-date will that details what you want to happen after you die. It’s a good idea to also include a list of all your financial affairs, bank accounts, savings and any other investments, and any relevant contacts.

You can use these checklists to know who to contact when someone has died.

  • Banks or credit unions
  • Financial advisor (if they used one)
  • Insurance companies (including life insurance)
  • Solicitor
  • Superannuation fund

Documents you might need

  • Certified copies of the death certificate
  • Certified copies of the Grant of Probate (if there is a will) or the Letters of Administration (if there is no will)
  • Deceased estates claim and closure form
  • Insurance policy documents
  • Proof of your identity and your relationship with the deceased person

What is myTrove and how can it help?

myTrove is a free service that works as a single place for people to be able to notify multiple organisations of a death and start the account closure process with each notified organisation. It’s intended to reduce the number of interactions and conversations you need to have with any relevant organisations. Through myTrove you are able to notify one or more organisations, including:

  • Government – finalise tax affairs, cancel a passport, end superannuation payments
  • Banks – close bank accounts with major banks
  • Insurance – let life insurers know you’ve got a claim
  • Utilities – advise utilities to disconnect or transfer the account

You will need some details and documentation about the person about the person who died before you can use the services, such as:

  • A death certificate
  • A list of organisations you want to notify
  • Full name of the deceased
  • Their date of birth
  • Their date of death
  • Address information
  • Where the person died

About the reviewer of this page

This report was reviewed by Canstar Content Producer, Caitlin Bingham. Caitlin is an experienced writer whose passion for creativity led her to study communication and journalism. She began her career freelancing as a content writer, before joining the Canstar team.

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