Whenever someone dies leaving an open account at a bank, the bank wants to be made aware of the death as soon as possible. While banks will not automatically freeze the assets of a deceased person, under certain conditions when a person dies without a will, banks can freeze the account. In order for that to happen, the bank representative would need to see a death certificate to prove the customer had passed. Every decision bank officials make to freeze the assets of a deceased person depends on having an official death certificate for that customer with the state seal on it.
Individual bank accounts are accounts with only one name. Only the executor of a will can authorize a bank to freeze the assets of a deceased person with an individual bank account, if that action is necessary. The executor of a will has a legal duty to handle the affairs of a deceased person according to her will. After the executor has disbursed the money from the account to pay for the deceased person's final expenses and paid whatever was willed to heirs, the executor must close the bank account.
A joint bank account is one that has more than one name on it. Banks do not freeze the assets of a joint account when one of the account owners dies. If a husband and wife owned an account together and one of them dies, the assets would pass to the surviving spouse. The surviving spouse should take a copy of the deceased spouse's death certificate to the bank as soon as possible so the bank can remove the decedent's name and personal information from the account and reissue debit or credit cards related to the account in the surviving spouse's name only. For this reason, elderly people often have joint accounts with a son or daughter to make it easier for their child to access the bank account after their death.
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Banks can and do freeze the assets of a deceased person if it receives an order from either civil court or probate in the event the person died without a will. The law states that the closest living relative or next of kin would receive the money. However, if there is a legal challenge concerning who is entitled to the account, it could complicate the process by which the deceased person's loved ones gain access to the assets while the details are hashed out in court.
There are some instances in which a bank will freeze the assets of a deceased person at the request of the Social Security Administration. That could happen if the funeral home notifies the Social Security Administration on behalf of the family of a person's passing. The Social Security Administration may want to immediately terminate Social Security payments sent electronically to the bank account. Payments that have already been direct deposited to the account also can be reversed by the U.S. Treasury.