What Happens to Your Bank Account After Death?
What Happens to Your Bank Account After Death?
Investopedia Tue, June 13, 2023 By RAE HARTLEY BECK
After you die, several things can happen to your bank account, depending on your account type, how you’ve set up your account before your passing, and whether you’ve set up a will or trust.
Learn the common ways you can set up your account to make things as simple as possible after your passing and what will happen if you don’t set up anything beforehand.
Name Bank Account Beneficiaries
The easiest way to pass your bank account on to your heirs after your passing is to make sure you name payable-on-death (POD) or transfer-on-death (TOD) beneficiaries on your accounts. This ensures that they will not have to go through probate, which can take months. If you want money to go to your survivors in the simplest, quickest, and least stressful way possible, then you want to avoid probate as much as possible.
Once you have named a payable-on-death beneficiary, they will not have direct access to your money until you pass. You retain the ability to change the named payable-on-death beneficiary at any time. This option is frequently referred to as a “poor man’s trust” since it essentially acts as a trust that easily transfers money to the person you designate.
Additionally, you don’t have to set up a costly trust through a lawyer and potentially pay fees anytime you want to make changes.
If you have listed someone as a POD beneficiary on your account, then after your passing, all they will need to do to access the funds in the accounts is show a valid government ID and a copy of your death certificate.
It is common practice for a bank to freeze an account upon notification of the account holder's death to prevent fraud. Therefore, it's important to have a payable on death (POD) beneficiary designated to ensure your money can be accessed by your loved ones if you pass away.
Have a Will
To continue reading, please go to the original article here: