Bank Accounts and Succession
How a person owned a bank account, the type of account, and how it was set up all dictate how that account is dealt with after they die. Our CA attorneys discuss how common accounts are handled.
Individual Bank Accounts
If the decedent owned a bank account and did not name a beneficiary, the account will probably have to pass through probate—the rigorous and time-consuming process whereby the court oversees the dissolution of an estate.
Jointly Owned Accounts
In general, if the co-owner of a jointly owned account passes away, the proceeds will automatically pass to the surviving owner.
Since payable-on-death accounts must designate a beneficiary, they are not subject to probate. Typically, a beneficiary can claim the proceeds from a payable-on-death account—sometimes called a “POD” account—by going to the bank with a death certificate and proof of identification.
Transfer on Death Accounts
Transfer on death accounts (TODs), disburse much like payable-on-death accounts. They do not need to be probated and can be claimed by the beneficiary upon presentation of a death certificate and identification.
Bank Accounts Owned by a Trust
Any assets held by a trust are not subject to probate. However, since trusts are established and conditioned by a benefactor, a trust-owned account must be operated in accordance with the terms of the trust. For example, a grantor might leave a certain sum of money for their grandchild, on the condition that the funds not be disbursed until the child turns 18.
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