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What happens to your bank account if you die and are single?

posted 2 years ago by enriquesingh (1812)
21 replies | jump to latest

Let suppose I'm 35 years old, single, my parents are in their 60s, I have siblings... and I also have $50,000 in savings.

If I were to die tomorrow what would happen to my savings if I have no will?

Can my parents or siblings claim that money or does the bank keep it?

Also if I have lets say a credit card with a balance that month what happens to it if you die? The bank is stuck with the balance I guess... can they collect from the dead person's savings account?

Just curious.

I had a friend who passed away due to an allergic reaction (he wasn't even aware that he was allergic), on one of our last conversations he mentioned that he wanted to save money for when he was older... this happened to him in his mid 30s and I wonder what happened to his savings and debts.

[–] [deleted] 2 years ago

an executor would be appointed by the court if you have no will. they would pay off any debts like a credit card. your heirs would get the remainder after the debts and legal fees are paid.

[–] OnanTheBarbarian (12589) 2 years ago

What if the bank and the creditors don't know the account holder has died?

[–] Keelai (35401) 2 years ago

Computers. They know. Everything is frozen asap.

[–] Ken12602 (499) 2 years ago

You get a death certificate to prove it.

[–] [deleted] 2 years ago

the executor has to publicize it. it used to be via newspaper. i would imagine it is online today

[–] DarthAckbar (2181) 2 years ago

this is incorrect, at least here in the US

and yes, i know this from actual experience

the bank accounts are inaccessible, and the debts go unpaid

[–] [deleted] 2 years ago

the bank accounts are frozen and are changed to the estate of john smith

the creditors make a a claim and if they are valid they will be paid from assets of the estate. not all creditors are the same. there are secured creditors and unsecured creditors.

the executor must assure that all outstanding tax returns are filed and outstanding amounts paid - if there is money to pay the balance.

[–] DarthAckbar (2181) 2 years ago

wrong, and again i know this from real life experience

[–] OnanTheBarbarian (12589) 2 years ago

Hahaha. Darth, you're great!!!

[–] DarthAckbar (2181) 2 years ago

haha, thanks!

[–] [deleted] 2 years ago

i have been an executor twice. the debts have to be paid if there are assets. secured creditors like mortgages come first and then unsecured creditors. the irs goes after estates all the time for unpaid taxes.

[–] nyctc7 (43948) 2 years ago

I've been an executor once. Don't know about Canada, but in the US, when there is a no will, the person is known as the administrator. Typically the closest relative becomes the administrator.

[–] OnanTheBarbarian (12589) 2 years ago

Hownos, you give good advice. But you're in Canada, we're in the U.S. And reality doesn't always jibe with the letter of the law, especially when money and financial bureaucracy are involved. I'm guessing in Darth's case there was much obstruction and delay involved.

[–] Keelai (35401) 2 years ago

Hownos is correct. Debts are paid when there are assets. Different claims take precedence like funeral expenses, taxes and executor/administrator fees if there is one. A claimant may decide not to go after the assets if they believe there are little to none left.

After the money is distributed, the executor/administrator files an accounting with the court.

[–] nyctc7 (43948) 2 years ago

The legal term is dying intestate (without a will). All States have laws of intestacy that spell out who inherits. Example: https://nycourts.gov/courthelp/WhenSomeoneDies/intestacy.shtml

[–] enriquesingh (1812) 2 years ago

Interesting, thanks.

[–] Keelai (35401) 2 years ago

Bank accounts, insurance policies and retirement accounts are left to the beneficiary who you name on the account. I suggest you do that if you have any of those accounts. This allows the money to be transferred without court involvement and their fee. These type of accounts fall outside of intestate statutes unless no beneficiary is named.

BTW, money is transferred to the state by the bank if there are no relatives. Unclaimed funds are held until someone comes forward. I suggest you go on your state's website and run your name and those of family members for Unclaimed Funds which include many different types of forgotten funds.

[–] nyctc7 (43948) 2 years ago

With the bank account, you must make your account a payable on death (POD) account, otherwise it will have to go through probate. You do not have to create a new account---you can make an existing account POD by filling out paperwork.

[–] [deleted] 2 years ago

here's how it is in canada.

After a person dies, the bank will close their account, and the estate administrator will be responsible for paying debts and distributing assets from the estate (including bank account funds).

[–] Keelai (35401) 2 years ago

It's the same as in the U.S.. A joint bank account or POD survivorship allows the money to be transferred without court involvement. If no beneficiary, then it goes through Probate if there's a will or Administration if there isn't.

They don't close the account. They place a temporary hold until the money is claimed.

[–] Keelai (35401) 2 years ago

POD beneficiary. Probate or Administration. Public Administrator if no fiduciary.