How to Avoid Frozen Bank Accounts after a Loved One’s Death
By Daniel A. Perry, Esq.
As an Estate Planning and Probate attorney practicing in Ohio, one of the most common questions surrounding bank accounts is whether they are frozen when a person dies.
Unfortunately, the answer depends upon the circ*mstances.
Many families find out about this problem after the death of a loved one. When the family attempts to access their loved one’s bank account, they discover that the bank needs the proper probate court paperwork before they can access the account.
This can cause many families frustration and results in families having to use their own funds to pay for their loved one’s final expenses.
Generally, whether bank accounts are frozen at death will depend upon how the bank account is titled.
Bank account owners can designate a beneficiary with a Transfer-on-Death (TOD) designation. These designations state that the ownership of the bank account passes immediately to the beneficiaries named on the TOD designation. Further, these assets pass immediately outside of the probate court system. Generally, you will need to present a valid death certificate to complete these transfers.
This can be a very powerful strategy for families.
However, it is important to be careful. Your TOD designations should align with your general estate planning strategies. There have been many cases where an estate has ended up contested and in court because TOD designations on bank accounts and other financial accounts conflict with the person’s will or trust.
Is there an instance where a bank account can be frozen?
Yes.
If the bank account is solely titled in the name of the person who died, then the bank account will be frozen. The family will be unable to access the account until an executor has been appointed by the probate court.
For more information
If you have questions about estate planning or the probate process in Ohio, please contact our office at (513) 241-0400 or use the contact form available on this website to schedule a time to speak with one of our Aronoff, Rosen & Hunt Estate Planning and Probate attorneys. We look forward to hearing from you!
FAQs
It is settled during probate, wherein the court oversees the distribution of assets according to the deceased's will or special laws in the absence of a will. The bank account will be frozen until the probate process is complete.
What happens if no beneficiary is named on bank account? ›
If the owner of the account didn't name a beneficiary, the process can be more complicated. The executor, who administers the dead person's estate, becomes responsible for using the money to repay creditors and dividing the remaining funds according to the deceased's will.
What happens to frozen bank accounts? ›
When your Savings Account is frozen, it means that you are unable to withdraw funds from your account via the ATM or chequebook. You will be unable to transfer funds from or into your account. You will also be unable to leverage your Debit Card to make purchases from your account.
How long does it take for a bank to release money after death? ›
How long do banks take to release money after probate? Each bank has its own policy but most will release funds held in the deceased's account within two weeks of being provided with the documentation they require.
Can I withdraw money from a deceased person's bank account? ›
If you're the joint owner of the deceased person's bank account, you should be able to withdraw money right away. Otherwise, you typically must supply documents showing that you legally have access to the account. Documents a bank might request include: Government-issued ID, such as your driver's license or passport.
What happens if you don't close a deceased person's bank account? ›
The beneficiary is not entitled to money in the account while the owner is alive, but automatically becomes the owner of the account upon the original owner's death. In these cases, simply visit the bank with a valid ID and a certified copy of the death certificate.
What happens if you withdraw money from a deceased person's account? ›
Once a Grant of Probate has been awarded, the executor or administrator will be able to take this document to any banks where the person who has died held an account. They will then be given permission to withdraw any money from the accounts and distribute it as per instructions in the Will.
Who gets money if no beneficiary? ›
Without a named beneficiary, your life insurance proceeds become part of your estate. The life insurance proceeds get distributed accordingly, along with the rest of your assets. Your estate may need to go through probate, which often charges substantial fees and could take a long time before reaching your heirs.
How do you get money out of a frozen bank account? ›
To unfreeze your bank account, you must contact your bank to figure out the issue and resolve the underlying problem, such as paying off debts or providing evidence of innocence. Unfreezing an account is at the bank's discretion and is not always guaranteed. You don't want a frozen account; nobody does.
Can money enter a frozen bank account? ›
Frozen accounts do not permit any debit transactions. When an account is frozen, account holders cannot make any withdrawals, purchases, or transfers. However, they may be able to continue to make deposits and transfer money into it. There is no set amount of time that an account may be frozen.
Key Takeaways. You can still receive deposits into frozen bank accounts, but withdrawals and transfers are not permitted. Banks may freeze bank accounts if they suspect illegal activity such as money laundering, terrorist financing, or writing bad checks.
How do I unlock my bank account after death? ›
If the deceased has named a payable-on-death (POD) beneficiary for the account, the person named will get access to it immediately. They will simply need to show a death certificate and identification to the bank.
How do I withdraw money from a frozen account? ›
How to withdraw money from a frozen account?
- Contact your bank and find out the reason for the freeze. To address a frozen account, your initial step should involve contacting your bank's customer service or visiting a branch in person. ...
- Seek legal advice. ...
- Resolve the issue. ...
- Look for alternatives.
