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Banking and Estate Details
Banking and Estate Details
Banking and Estate Details You Don't Want to Ignore
By Alison Dasso | June 27, 2024
When a loved one becomes incapacitated or passes away, it can be a very emotional time for the family members dealing with the financial aftermath. Decisions have to be made quickly and it doesn't help if there are obstacles that could have been prevented. As a personal banker, I have witnessed many unfortunate situations that could have been avoided if the account holder had done some advance planning. No one likes to think about what will happen if they get ill or pass away but doing work now will give your family peace of mind later.
When Everything Is Going Well:
No one likes to think about their mortality but the time to think about financial planning is when you don't need it. Take some time to think about the following:
Account Titling:
Make sure all your bank accounts have a joint owner or at least a beneficiary. A joint owner will be able to pay bills and transact on the account, even if you are not able to. A beneficiary becomes the owner of the funds only after you pass and they present your death certificate to the bank; they can't transact on the account when you are alive. Make sure you have joint owners on safe deposit boxes and that the other owner is aware of where to find the keys.
Financial Power of Attorney:
This is separate from a health care Power of Attorney/Living Will. If you don't already have joint owners on an account or if you want your beneficiary to be able to step in when you are incapacitated, this type of document will allow someone to do financial transactions on your behalf. You can find a basic template online for free that you can use. You can specify if they can access your safe deposit box, sell your home, pay your bills and more. If your power of attorney agent wants to use it to open or close an account, your bank will review the document and have them fill out an Affidavit of Trustee form before they can act.
Talk to a Lawyer About a Trust:
Unlike a will, which goes to probate, a trust avoids probate and names who becomes trustee once you pass. Talk to a lawyer about if you should have a trust and if you should retitle assets such as bank accounts or your home in the name of a trust.
Take Inventory of Passwords:
List out all of your passwords for banking and any other important sites. There are many free programs that will allow you to store passwords in a secure environment. Make sure you include any financial passwords, as well as ones for insurance, pensions, photos, etc. It will help surviving family members make sure they are not missing any details. Make sure your family does not cancel your phone right after you pass. They may need it for two factor authentication in order to get into your accounts and websites. Also keep an up to date list with all of your account numbers and locations and what things are paid automatically from each account.
Once Someone is Deceased:
Get a Copy of the Death Certificate:
The funeral home will work with you to get multiple copies of the death certificate. You will need these to claim funds at a bank or to cancel services.
Small Estate Affidavit vs Letters of Office:
These documents only come into play if you do not have joint owners or beneficiaries on your account or if an account is not titled in the name of a trust.
Small Estate Affidavit:
A small estate affidavit is used in conjunction with a death certificate when a deceased person’s estate is under $100,000. The document can only be used to close an existing account and must be reviewed by the bank before the account can be closed.
Letters of Office:
If the will names you as executor or administrator of the deceased’s estate, your lawyer will file the will with the county and be issued Letters of Office. This document and the death certificate will be used if you need to open an estate account.
Continuing the Banking After Someone is Deceased
Estate Account:
If the deceased gets funds after they pass, the check will be made payable to their estate. The check can't be deposited into an account unless it’s titled in the name of the estate. The bank can open this type of account using a copy of the Letters of Office, the death certificate and a tax ID number that you can get for free on the IRS website.
Trusts Change After Death:
If a deceased person has a trust and they are the only trustee, that trust becomes irrevocable after they die. The successor trustee will need to bring in a copy of the trust, the death certificate and a tax ID number. The bank will need to open a separate account under the new tax ID number.
Talk to Professional:
It’s always a good idea to speak to a lawyer or accountant when you are preparing your financial documents, as this could affect your taxes. Your banker can't give you legal or tax advice but they can tell you more about how you may need to change or retitle your accounts to accomplish your financial planning.
Contact Alison:
I would love to talk to you about how my writing skills can contribute to your business.