Helotes Estate Planning And Asset Distribution Assistance
When someone passes away, managing their finances becomes a priority for the loved ones left behind. One common question that arises is whether banks freeze accounts after death. In most cases, banks freeze accounts when they are notified of a person’s death. Understanding how this process works will help families prepare for the steps in estate planning.
Bineham & Gillen understands the complexities that come with Texas estate management. From navigating asset distribution through probate to understanding the power of attorney capabilities, our team is here to assist in this process once a loved one passes.
Why Do Banks Freeze Accounts After Death?
Banks often freeze accounts once they’re notified of the account holder’s passing to protect the estate. Doing so ensures that the funds are distributed according to the deceased person’s will or state laws. It also prevents unauthorized transactions while the estate is in probate or until legal documentation is provided.
The account typically remains frozen until the executor or administrator of the estate presents legal authority to manage the funds. It’s important to note that if the account is joint or set up with a payable-on-death (POD) beneficiary, freezing may not occur. The funds may automatically transfer to the co-owner or designated beneficiary if this is the case.
Can A Power Of Attorney Use A Bank Account After Death?
A common misconception is that a power of attorney (POA) can continue to access a bank account after someone’s death. However, the power of attorney only has authority while the person who granted it is alive. Once the individual passes away, the POA’s legal authority ceases.
After death, the executor named in the will or appointed by the court takes over financial responsibilities, not the power of attorney. Attempting to access funds using a POA after the account holder has passed away can result in penalties.
Can A Power Of Attorney Close A Bank Account?
The short answer is no — a power of attorney can’t close a bank account after the account holder’s death. Once the account holder passes, the POA is no longer authorized to make decisions regarding the deceased person’s finances.
Only the appointed executor or court-approved administrator of the estate has the legal authority to close bank accounts, pay debts and distribute assets outlined in the will.
If you hold power of attorney for someone, it’s essential to understand your responsibilities and limitations before and after the person’s death. Acting beyond your authority can complicate the probate process and result in legal consequences.
What Happens To Joint Accounts Or Payable-On-Death (POD) Accounts?
In some cases, a bank account may not be frozen. If the deceased person shared a joint account with another person, the surviving co-owner typically retains access to the funds.
Similarly, if an account is designated with a POD beneficiary, the funds transfer directly to the named beneficiary without the need for probate. This process helps streamline asset distribution and avoid complications relating to frozen accounts.
Steps To Access Bank Accounts Frozen After Death
If you’re an executor or the beneficiary of an estate, navigating the process of unfreezing a bank account can be challenging. Here’s a basic overview of the steps involved:
- Obtain the death certificate — The bank will need to see official proof of death.
- Gather estate documentation — This includes the will and any court-appointed executor documentation.
- Present documentation to the bank — Once the bank verifies your legal authority, the account may be released for appropriate distribution.
- Follow probate rules — Depending on the complexity of the estate, probate may still be necessary. The bank may require additional steps to ensure legal compliance.
Work With Bineham & Gillen For Estate Planning Assistance
Managing bank accounts after the death of a loved one can be stress-inducing, especially if you’re unsure of your legal rights and obligations. Bineham & Gillen understands the importance of proper estate planning and how crucial it is to prevent complications during this difficult time.
By setting up a clear plan, you can help your family avoid complications with asset distribution. Contact us today for compassionate legal guidance that ensures your peace of mind.
