Losing a loved one is never easy, and handling their financial matters can feel like a heavy burden on top of your grief.
At Brady Cobin Law Group, PLLC, we understand how overwhelming this time can be.
Our firm is here to help families in North Carolina handle the legal and financial responsibilities that come with the passing of a loved one, including closing their bank accounts.
To make this process easier for you, we’ve put together a straightforward guide on closing a bank account after a loved one’s death.
Step 1: Determine Your Legal Authority
The first step in closing a bank account is establishing your authority. This authority depends on your relationship with the account holder and your role in their estate.
Joint Account Holder
If the account was jointly owned with rights of survivorship, the surviving account holder automatically assumes complete control of the funds.
To update the account, you’ll typically need to provide the bank with a certified copy of the death certificate and request to remove the deceased’s name.
Executor or Administrator
If you’ve been named the executor in the will or appointed administrator by the court when there is no will, you’ll need proof of your role. This comes in the form of Letters of Testamentary (for executors) or Letters of Administration (for administrators), issued by the probate court.
Trustee
The successor trustee named in the trust document takes responsibility for trust accounts. You’ll need to provide the bank with trust documentation and a certified death certificate to manage or close the account.
Beneficiary
The named beneficiary can claim the funds if the account has a Payable-on-Death (POD) designation. Presenting a certified death certificate and valid identification is usually all that’s required to access the account.
Step 2: Gather Necessary Documents
To streamline the process, make sure you have all the required documents ready before contacting the bank:
Certified death certificate: Obtain several copies, as banks and other institutions will require them.
Will (if applicable): This document identifies the executor and outlines the deceased’s wishes.
Proof of identification: Ensure you have a valid ID, such as a driver’s license or passport.
Bank statements or account information: While not always mandatory, these can help locate accounts.
Letters Testamentary or Letters of Administration (if applicable): These confirm your legal authority to act on behalf of the estate.
Trust documents (if applicable): These outline the successor trustee’s authority and the trust’s terms.
Step 3: Contact the Bank
Once you’ve gathered the necessary documents, it’s time to reach out to the bank.
Initial contact: Call the bank’s estate department or a customer service representative to explain the situation and schedule an appointment, if required.
Clarify procedures: Banks often have specific requirements for closing accounts after a death. Ask for detailed instructions.
Discuss account details: Identify outstanding checks, recurring deposits, or automatic payments tied to the account.
Settle outstanding debts: Resolve any overdrafts, fees, or linked credit accounts.
Transfer remaining funds: Depending on the situation, you may need to transfer funds to beneficiaries or an estate account.
Request formal closure: Once everything is settled, ask the bank to close the account.
Step 4: Understand Probate Considerations
Probate is the legal process of managing a deceased person’s estate in North Carolina, including validating a will, paying debts, and distributing assets. However, not all accounts require probate.
Accounts held in joint ownership with rights of survivorship generally bypass probate, as do Payable-on-Death (POD) accounts and assets in trusts. These arrangements allow funds to transfer directly to beneficiaries, simplifying the process.
North Carolina also offers a simplified probate procedure for estates below a certain asset threshold, making it easier to handle smaller estates. Understanding which accounts require probate can save time and reduce complications for families.
Step 5: Distribute the Funds
After the account is closed, the next step is distributing the remaining funds. If there is a will, the executor must follow its instructions to ensure the funds go to the named beneficiaries.
Without a will, North Carolina’s intestacy laws determine how the assets are divided among the deceased’s heirs, prioritizing close family members such as spouses and children.
The executor must identify all beneficiaries, settle outstanding debts or taxes, and meet all legal obligations. Once this is done, the remaining funds can be distributed, often requiring legal releases to finalize the process.
Important Considerations Regarding Bank Closure
Closing a loved one’s bank account isn’t always an immediate step. Certain considerations can make the process smoother and help avoid complications.
Don’t Close Accounts Immediately
It’s often best to keep the account open temporarily to manage outstanding bills, accept direct deposits (like Social Security payments), and resolve other ongoing matters.
Power of Attorney
Remember, a power of attorney becomes invalid upon the account holder’s death. Attempting to use it afterward could lead to legal complications.
Safety Deposit Boxes
If your loved one had a safety deposit box, accessing it may require a court order or the presence of a bank official. Contact the bank to understand their specific policies.
Handling Estate Administration in North Carolina? We Can Help
At Brady Cobin Law Group, PLLC, we’re committed to helping families handle the practical and legal aspects of losing a loved one.
Whether you’re dealing with probate, closing accounts, or other estate administration matters, our firm offers compassionate guidance every step of the way.
Call us at (919) 782-3500 to schedule a consultation today. Let us help you find peace of mind during this challenging time.
