There are different ways to solve it but it depends a lot on the bank where the account is held.
Dying is, without a doubt, the most painful situation that a human being can face. Losses leave sadness, but if we see it in a cold way, they can also leave many problems, especially if the person who died did not leave certain procedures in order.
One of these abysses is found in the state of the bank accounts of the deceased. This obviously will not affect them, but it will affect their relatives and close ones, who will have to deal with the way they have left their balances configured in financial institutions.
What happens when the person who is the sole owner dies depends a lot on the bank where the account is held, many financial institutions in the United States allow their clients to name a beneficiary or establish the account as Payable on Death (POD), for or Transferable on Death (TOD) to another person.
If this is the case, the bank will give the money that the deceased holder has to the person who has received this appointment, what has to be done is to give notice of death so that the documents that release the cash are requested.
Once all the resources are withdrawn, the bank will de-register the account. Let’s just say this would be the easiest way to get out of trouble.
Now the way things will get complicated is when there is no appointment in the bank account. In this situation, an executor takes over, who will be in charge of managing the estate of the person who died.
This figure will also be responsible for paying the debts that the deceased has left pending and for dividing the will, if it exists.
If there is no beneficiary and no will, then things can be a real headache. Even in the event that an executor has not been appointed either, the state will determine it according to the law.
If what we are talking about is joint accounts, the picture changes, since there are generally automatic protection mechanisms. That is, if one of the people who make up this society dies, the rights pass mechanically to the other person or people who make up the group.
What it can affect is the constitution of the insurance that is protecting the account.
Generally, and this is not the case with all insurance companies, some institutions will continue to insure the account for the next six months after the death of one of the holders, however, after this time, the coverage ends. And the sum is divided according to the parts in which the account is formed.
“Always have a will drawn up by a probate attorney and establish beneficiary designations or TODs, but the easiest way to handle bank accounts is to simply have an authorized signer on the account so they don’t have to wait,” explained accountant Eric Nisall in an interview with the Fidelity site