What Happens to Someone’s Bank Account When They Die?

When a person dies, the personal representative (PR) takes responsibility for the management of the deceased person’s estate which includes money, possessions and property and will also be responsible for the closure of bank accounts. If the PR has been named in a will they take on the role of the executor.

How to find the bank account information of a deceased person

When a person dies, the PR can make a start by sieving through the paperwork left by the deceased to see if bank statements can be located. This might not be an easy task particularly if the deceased wasn’t well organised and had moved to online banking like most people today which means bank statements may be guarded by passwords embedded somewhere online.

If the PR has not been told what financial assets the deceased owned then it may be necessary to embark on a search for this information.

How to close a deceased person’s bank account

As soon as the bank account details have been accessed the next stage is for the PR to let the bank know that the person has died. This will mean providing the death certificate as proof of death.  There are two ways of notifying banks. The first is the PR contacting each bank individually and the second is signing up to the Death Notification Service which is free and it will notify all financial institutions. To access this service it will be necessary to provide the deceased’s full name, date of birth and usual address at the time of death. Bank numbers don’t need to be provided.

Depending on the value of the amounts involved, it is possible to close down an account without having to wait for probate. All financial institutions have their own limits so the PR will have to contact the ones the deceased had accounts with to find out their individual requirements.  The PR is sent an appropriate form to sign which will depend whether probate is necessary.

Can somebody withdraw money from a deceased’s bank account?

It is illegal to withdraw money from any bank account that belongs to somebody who has died. This is even the case for the person who holds power of attorney and who has been able to withdraw money for the deceased when he or she was still alive. The power of attorney comes to an end when the person dies.

As soon as the bank has been informed about the death, all accounts will be frozen. If any direct debits or standing orders are being paid out of the account such as rates and utility bills the PR should tell the companies as soon  as possible so that they know the reason why the payments have ceased.

If probate is needed to close the account, funds can still be used from the account to pay the funeral costs and pay any inheritance tax (IHT), if applicable, before probate is granted.

To pay the funeral costs you will need to provide the bank with a copy of the funeral invoice so that they can pay the undertaker direct.

If IHT needs to be paid, the majority of banks and building societies use the HMRC’s Direct Payment Scheme.

What normally happens to a joint bank account when one holder has died?

Bank & building society accounts are normally held by the joint holders of the account as ‘joint tenants.’ This means that when one of the account holders dies, the amount of money still remaining in any account will pass automatically to the account holder because of survivorship. All the surviving spouse needs to do is to take the death certificate to the bank or building society and the account will be immediately transferred into the person’s name.

If a loved one, or your spouse, has died and you are unsure about what will happen to their individual or joint bank accounts, you should seek advice from a probate solicitor.