Bank accounts at death

10 Nov 2023 · 1 min

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In this concise explanatory video, the speaker outlines what happens to a bank account after the account holder dies, covering four main ownership scenarios. First, a sole‑owner account with no designated beneficiary typically goes through probate and may be frozen by the bank. Second, a sole‑owner account with a payable‑on‑death (POD) beneficiary bypasses probate, unless the named beneficiary predeceases the owner and the designation does not include contingent heirs, in which case the account reverts to probate. Third, a jointly held account usually passes automatically to the surviving co‑owner, who then becomes the sole owner; if that survivor later dies without a POD beneficiary, the account will again be subject to probate. Fourth, an account held in a trust is managed by a successor trustee who distributes the funds according to the trust terms, avoiding probate. The speaker concludes with practical advice: use POD beneficiaries on non‑trust accounts, keep beneficiary designations current, and consider trusts for smoother asset transfer.

Chapters

What is going to happen to your bank account when you exit the planet? I thought you'd never ask. Okay, to start off, let's say you own it in your own name with no beneficiary. That account is most likely going to have to go through probate, and more than likely the bank will freeze it. Next, let's say it's an account in your name alone and you have a beneficiary on it. They will get the money, no probate. But what if that beneficiary that you named on the account is not alive? Unless that designation was set up to include their descendants, that account is back in probate court. If you have an account jointly with somebody else, most likely the entire account will be theirs, but that person will now own it in their name alone. So if they do not add a payable-on-death beneficiary, when they die, the account will go to probate court. If your account is held in the name of your trust, your successor trustee comes in and distributes that money to your beneficiaries. So if you don't have a trust bank account, make sure your account has a payable-on-death beneficiary to it. If that person dies before you do, update the account.