Here’s What Happens to Your Bank Account When You Pass Away

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Does your state get to claim your bank account when you pass away or do your heirs? Read on to find out. 

You need money in a checking account so you can pay your bills on an ongoing basis. And you need money in a savings account for emergency expenses, such as when your roof springs a leak or your car gives you trouble.

But what if you pass away and there’s money left in your bank account? What happens to that money will hinge on whether you have a joint account. And if you don’t have a joint account, what happens to your money will depend on whether you have a beneficiary designated for your account.

When you pass away and leave money in the bank

People who are married commonly open joint bank accounts. And sometimes non-married family members open accounts jointly for different purposes.

If you have an account with a spouse or another person, and you pass away, that account will generally become the property of that joint holder. Similarly, if you designate a beneficiary on your bank account, that person will generally be entitled to receive the money in it. This is true even if you don’t have a will, according to King Law Offices.

Now, even with a designated beneficiary on your bank account, the account will still likely have to go through probate. Probate is a legal process where a deceased person’s assets are analyzed and divided up accordingly. In some cases, having a will could make it so you’re able to avoid probate. But even if not, it will be clear who the money in your bank account is supposed to be given to.

When you have no surviving heirs

You may be someone who doesn’t have a spouse, children, or other relatives. If that’s the case and you pass away without having designated a beneficiary for your bank account, following the probate process, the money in that account will likely become the property of your state. But this will generally only happen if you don’t have a will or a beneficiary on your account, and you don’t have any clear beneficiaries that can be identified through the probate process.

It may be that you have no family but have an old colleague you’d want to leave your money to in the event of your passing. If you want such wishes carried out, you’ll need a will.

In fact, it’s a good idea to put a will in place even if you don’t have much in the way of assets. Having a will on file will make it more likely that your wishes are carried out upon your passing. And if you’re certain you want a specific person to receive the funds from your bank account after your passing, make them your account’s beneficiary.

If you’re not sure how to do that, contact your bank and ask what paperwork you need to submit. Taking a little time to designate a beneficiary could make it so a person you care about gets your money after you pass, as opposed to it becoming state property.

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