Whether you're worried about what will happen to your money, or someone close to you has passed away, it is important to know what happens to bank accounts when someone dies. There are processes in place to help make this difficult time run a little easier, regardless of whether there is a will involved or not.
In the event of death, the deceased's bank accounts are closed by the bank. Before that, any remaining money will be paid out in line with what was requested in their will, which is a legally binding document outlining who gets the deceased's assets following death.
If there is no will, ownership of the account and its assets will be transferred to the next of kin or estate administrator. It's important to note that any credit card debt or personal loan debt will be paid from the deceased's bank and savings accounts before the account administrator takes control of any assets.
If you don't yet have a will created, you can get started making a will on the Service NSW website online.
If someone you know has passed away, one person will need to be nominated as the executor of the will. They will need to contact the bank to start the process of settling the deceased's bank accounts.
The bank will then send a letter advising of next steps. But before the deceased's estate can be settled and their bank accounts closed, the financial institution needs documents showing proof of death, and identification from the next of kin proving their authority over the deceased's estate.
The following documents must be provided before the financial institution can close or transfer ownership of the account(s):
Some financial institutions will accept the following, or a combination of the following documents as proof of death:
If the deceased has not left a will, a spouse or next of kind can apply for a Probate/Letter of Administration from the state or territory's Supreme Court. As an estate administrator, this person will be responsible for collecting all the assets, paying any debts, and then distributing assets to the beneficiaries.
The Probate/Letter of Administration needs to be provided to the financial institution along with the death certificate.
Once the financial institution has all the information it needs to satisfy its requirements, if the account is held solely in the name of the deceased, account access is restricted, a certificate of balance is issued, the money will be paid out, and the account is closed.
What happens to joint bank accounts?
If the bank account is held jointly, ownership of the account will be transferred to the other primary account holder. The account will continue to function as normal.
What happens to credit card debt?
If the deceased has credit card debt or personal loan debt, the balance of these debts will be paid from the deceased’s transaction and savings accounts before the funds are released.
What happens to term deposits?
A term deposit investment can be released before the date of maturity once the financial institution gets all the necessary paperwork, declaring the person has passed away. Fees and charges are waived and any interest owed on the investment is paid.
What happens to my home loan if I die?
To find out what happens to your home loan in the event of your death, we suggest you read our guide on this topic.
How long does it take for an account to be settled and closed?
Financial institutions advise that each case is different. We suggest you contact your financial institution for further information.
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How do I find out if my deceased father has a Swiss bank account? I have no paper reference.
Hi Ralph,
Thanks for reaching out to us. I’m sorry for your loss. The article above contains some useful information to your situation.
Yes, it could be hard to find out if you do not have pertinent documents to show to prove your relationship with your father as well as a will that states you can access his account after his death (if ever he had an account with Swiss Bank). Although you may try contacting the bank directly and confirm, just in case. In indeed your father has an account with them, the bank would however transfer your father’s account to his next of kin or estate administrator if he doesn’t have a will.
Best regards,
Rench
What is “point of death” in reference to accounts and estate planning? How do I instruct my bank to make sure my accounts transfer at point of death?
Hello Mary,
Thank you for your inquiry.
You may be likely referring to the date in which your assets will proceed through probate process.
This is initiated at the time they receive the notice of death. Generally, we cannot instruct the bank as this is patterned after on the type of bank account you have. Usually for “in-trust” accounts, the ownership automatically gets assigned to who it was designated for, while joint account gets owned entirely by the surviving person. Now for single accounts, they become part of the deceased estate, together with other assets. This is where the deceased administrator or probate attorney would step in.
You can refer to your Product Terms and Conditions given during account opening or talk to a bank officer if you need further clarification. Alternatively, you can also discuss this with a financial adviser or a legal expert.
Hope this helps.
Cheers,
Jonathan
My wife and I have several joint bank accounts. If one of us should die how do we handle the account. Does the remaining partner have access to all of the joint accounts immediately.
We have heard from friends that if one partner dies, the account is frozen until probate is finalised.
Hi Gary,
Thanks for your question.
If one of the joint account holders passes away, the ownership of the account will be transferred to the surviving account holder. The account will continue to function as normal. The bank will not freeze the funds in a joint account because they belong to both account holders equally, except for exceptional cases. You may refer to the article I sent to your email for more information on this.
Cheers,
Liezl
What happens to a joint account when one party dies?
Hello Karen,
Thank you for your comment.
The bank will not freeze the funds in a joint account since they belong to both account holders equally. Ownership of the funds in a joint account will usually revert to the surviving account holder on the death of the other.
If the account requires the signature of both parties, then upon the death of one party, the other will not be able to withdraw money from the account until a death certificate is provided to the bank. If the account requires the signature of just one party, the surviving party will be able to access the account as normal. In either case, once the death certificate is provided to the bank the account will become a single account in the name of the surviving party alone.
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Regards,
Jhezelyn