When someone dies leaving cash in a bank account, you might not have the legal right to claim the money right away. Often, the accounts become part of the deceased's estate so only the executor or administrator of the estate would be able to access them. It's much easier to claim a joint account when you are the surviving account holder, or when you are the beneficiary of a "payable on death" account.
What Happens to Bank Accounts When Someone Dies
When a person dies and has a will, the named person in the will is appointed the executor of the estate. Where there's no will, a family member typically has to file a petition with the probate court asking to be appointed as administrator. Despite the different job titles, the roles are much the same. The executor/administrator is responsible for gathering the deceased's assets, paying debts and taxes, and distributing the assets including bank accounts.
Opening an Estate Account
If you are appointed as executor/administrator, you are responsible for managing the deceased's bank accounts. Most people do this by opening a special bank account called an estate account, and transfer the balances of the deceased's accounts into it. The estate account will then be used to pay bills and expenses. To open an estate account, you'll first need to get a Federal Tax ID number, called an Employer Identification Number, from the Internal Revenue Service. Apply online through the IRS website. Take your EIN and proof of your appointment to the bank and fill out the required paperwork.
Streamlined Process for Low-Value Estates
Low-value estates can usually avoid comprehensive probate in most states. If the estate is small enough to qualify for simplified probate, close family members such as the deceased's spouse and children might be able to take money directly from the deceased's bank account. You likely will need to apply to the court using an affidavit. Speak to a local attorney or the court clerk's office about what is required in your state.
Joint and P.O.D. Accounts
If you held a joint account with the deceased, you automatically get access to all the cash in the account when the other owner dies. These accounts are specifically designed to bypass probate so you do not have to do anything special to remove the deceased's name from the account or withdraw the money. With a payable-on-death account, any money left in the account will automatically pass to the named beneficiary when the account holder dies. Again, there's no need to go through probate. The beneficiary can usually claim the cash by taking his ID and the death certificate to the bank where the account is held.
How to Claim Missing Money
Bank accounts sometimes get missed when someone dies. After a period of inactivity, the account is suspended and the money gets handed over to the state until someone comes forward to claim it. To see if any old accounts are owed to you, run a search at the Missing Money website using the name and state of the deceased person. If anything comes up, you can claim the funds by submitting a claim form through the website. You will need proof of your identity and paperwork showing your entitlement to the money such as the death certificate, probate paperwork or a copy of the deceased's will.