Who Gets the Funds in a Bank Account If There is No Will?

With proper planning, you will retain full control over how your assets are distributed when you pass away. However, estate planning is something that many believe they will still have time for. This can lead to a lot of stress when a loved one passes away unexpectedly.

If a loved one has passed away, you may immediately wonder who is going to retain control over the bank account. As a general matter, the deceased person’s assets are first used to pay off their creditors.  So, any money held in a bank account will be used to pay those creditors, and any remainder after paying the creditors will be available to distribute to the heirs. 

One exception to the general rule is for accounts that have joint owners or persons who are listed as “payable on death” beneficiary of the account.  In those cases, where a spouse, child, friend, or other person is named as the joint owner or beneficiary, then the account does not pass through the probate process and will not be used to pay the deceased person’s creditors.  It’s important to note that the accounts with joint owners or beneficiaries do not pass through the Will and do not necessarily pass in the same manner as the terms of the person’s Will. 

Assigning a joint owner can be a good option for those that are married or only have one child. Unfortunately, if you have multiple heirs, assigning a joint owner to a bank account can create problems with the distribution of wealth from your estate if your bank account had a significant sum inside of it because many people assume that the one child they have named with “do the right thing” and divide it with their siblings.  However, by law, as the joint owner or beneficiary of the account, they are not required to split the account with their siblings. 

Are you starting the estate planning process or have an estate that is going through a problematic probate? Contact us today to see what Ford + Bergner LLP can do to help you navigate the difficult process that is estate and probate law to make sure that things go as smoothly as possible.