To either release all deposited cash or designate a new holder, a bank conducts an analysis, for which you may be charged a fee. Legally, the bank must always notify you of all the costs that will be levied before you agree to their proposal. Most importantly, you should never be forced to pay anything before all procedures are complete.
What to Do After an Account Holder Passes Away?
Many issues may need to be resolved once a close friend or family member passes away. Closing bank accounts can be one of them, particularly when a sizable amount is required to cover funeral costs or to pay off a deceased person’s outstanding debts.
In these situations, closing a bank account is not always simple, but it can be strategically accomplished with the proper paperwork. In this guide, you will find everything regarding what to do when a bank account holder dies.
What Are the Things You Need to Understand Regarding a Deceased Account?
As quickly as possible after an account holder's death, their legal heirs must inform the banks. To notify the bank of the death, they must give them the death certificate, identification documentation, and account specifications.
All accrued money from the deceased accounts will be given to the lawful heirs if there are no outstanding debts owed to creditors by the deceased. However, joint accounts held with a deceased individual will be transferred completely to the surviving owner upon receipt of the funds.
In the following sections, you may further develop an idea of what to do when the account holder passes away to ensure a seamless recovery of funds.
How to Close the Account When the Holder Passes Away?
You need to have legal permission to terminate a bank account on someone else's behalf after they pass away. If you are not a joint owner then you must possess all required documents to issue a valid death claim. All paperwork that you will need to terminate a bank account after a loved one passes away is summarised below.
- Photocopy of the original account holder’s death certificate
- A copy of the lawful heir’s succession certificate
- Your ID proof (Aadhaar card, PAN card, and Voter ID) provided you are the claimant
Joint account holders contemplating what to do when a bank account holder dies, need to follow a separate procedure. In those cases, a surviving account owner must submit a request to that bank giving all necessary proof. This requires producing the deceased person's death certificate in front of the designated officials. After verification is completed, the surviving holder can simply withdraw the sum to his individual account.
How to Transfer the Ownership of the Account?
The Banking Regulation Act allows due designation of depositors' funds for transfer when a bank account holder dies. The following regulations are in accordance with Sections 45-ZA and 45-ZB of the Banking Regulation Act of 1949:
When a joint deposit is held by a bank, the depositor, or if applicable, all concerned depositors together, may designate one person as a nominee. Then a bank will return the deposited amount to this individual if either the sole depositor or all the depositors pass away.
Although some banks do have units providing inheritance assistance, bank employees are often restricted from giving heirs much useful advice about what to do when a bank account holder dies. For better guidance, it is advised to seek legal counsel or to get in touch with any civil court.
FAQs ABout What Happens When a Bank Account Holder Passes Away
A deceased person’s assets at the time of death as well as any transactions that happened after their death are both disclosed to the heir or heirs. Furthermore, best banking practises state that you should know about any transactions made up to a year prior to the account holder's death, but always with the consent of the other account holders, if any.
Only accounts held in joint names will not have their funds frozen upon a person's passing. Joint accounts guarantee the transfer of funds to other named parties on an account, an advantage that individual accounts do not offer.
In these situations, a legal heir must get an affidavit from the local court. Next, they must present all identification documents of the person to whom they wish to transfer the account holder's deposits. Lastly, it is crucial to provide a copy of the death certificate of the account holder.
Other Important Articles about Death Support
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