What Happens To A Bank Account When Someone Dies?

What Happens To A Bank Account When Someone Dies?

When a loved one dies, you’re left with all sorts of emotions to deal with. You may feel sad, but you also probably have things to attend to. If someone has passed away and you need to manage their finances, there are a few common steps. Here’s what happens to a bank account when someone dies, depending on the account type. We will discuss all these situations in detail.

When the Sole Bank Account Holder Dies:

If the deceased was the sole holder of the bank account, we need to check if there is any beneficiary named. It is important to check if someone’s name is to inherit the funds in the account or not. 

Many financial institutions allow their customers to mention the name of a beneficiary to which the funds can be transferred after the demise of the principal account holder. 

The bank releases the funds in the beneficiary’s account once they get to know about the death of the account holder. Generally, the bank closes such accounts after the transfer of funds. 

When a Joint Bank Account Holder Dies:

Typically, in joint accounts, banks include automatic rights of survivorship. It means that all the rights will be transferred to the living account holder or holders. However, the joint owner or owners must not be secondary account holders. In this case, the account needs to be closed. 

The funds from that account can be transferred before the final closure. Many instances have been witnessed where the joint account holder loses access to the account fund after the demise of another joint bank account holder. 

But most banks give the surviving account holder the right to survivorship. 

When an Account Holder Dies without a Will:

If a bank account holder dies without a will, the bank account still passes to the named beneficiary. However, the situation gets more complicated if the holder dies without a will and without naming an heir. 

Usually, the executor of the estate handles all the deceased’s assets, including the funds in the bank account. State also appoints executors based on the local laws if there is no will to name an executor. 

The executors prioritize using the funds to clear the deceased’s debt and then distribute the money as per the local law. The executor does this to free the dead from any kind of liability. 

How do Banks discover about the Death of a Person?

There are various sources for banks to discover about the death of their account holder. Banks need to keep their system updated, and that’s why they keep searching for information about their customers in various ways. 

Let us see the various sources through which a bank knows about the death of its customer.

  1. Family Member: Typically, it is the best way through which banks get the information about the death of a person. If any of your family members have passed away recently, take a copy of the death certificate and social security number to the bank and inform them about the incident. After this, the bank will direct you to further processes. 
  2. Social Security: The funeral director keeps informing the Social Security Administration of a recipient’s death on behalf of their family members. They take this action to ensure that no more social security cheques are issued. 

This is done because sometimes the payments for social security are sent even after the death, which must be returned. Social security contacts the banks, and eventually, banks come to know about the demise of one of their customers.


People get confused about what to do with a bank account when someone dies. This is a legit question asked by every responsible citizen. This blog post is dedicated to the entire group of people having this doubt.

Bank accounts are a crucial part of the life of every person. Any discrepancy with the funds in the account can be financially harmful. But when a person dies, it becomes our responsibility to inform the bank and get the funds directed to the actual heir of the dead person. 

I hope this blog was of some help to all its readers.