What happens to a bank account when someone dies?

Who has access to a deceased’s bank account when they die? And what happens to joint bank accounts after death? Rachel Collett of Wright Hassall explains what happens to someone’s bank account when they die.

Who has access to a deceased’s bank account?

When someone dies, a personal representative (PR) is responsible for managing the deceased’s estate (money, property and possessions) and will be responsible for closing any bank accounts. If the PR is named in the will, they are called the executor.

How do you find a deceased’s bank account details?

When someone dies, the PR should start by looking through the deceased’s paperwork to see if they can find any bank statements. This may not be an easy task if the deceased was not organised and the move towards online banking means that often there are no bank statements to be found.

If the PR is not aware of the assets held by the deceased, then they should carry out a financial assets search. There are various companies who can help with this.

How do you close a bank account after someone has died?

Once any details have been found, the next step is for the PR to notify the bank that the person has died. The bank will need to see a death certificate. You can either:

contact each bank individually
sign up to the Death Notification Service, a free service which notifies all the financial institutions at the same time

In order to use the Death Notification Service, you need to know details of the person that has died including their full name, usual address, date of birth and date of death. You need to know which organisations that they held assets with, but you do not need to know the account numbers.

Depending on the amounts involved, it’s possible to close an account without probate (the legal right to deal with someone’s estate when they die). Each financial institution has its own limit and so you need to contact them to see what their process is. They will send you the appropriate form to sign depending on whether probate is required.

Can someone take money out of a deceased’s bank account?

It’s illegal to take money from a bank account belonging to someone who has died. This is the case even if you hold power of attorney for them and had been able to access the accounts when they were alive. The power of attorney comes to an end when a person dies.

Once the bank has been notified of the death, the account will be frozen. If there are any direct debits or standing orders being paid from the account – for example, utility bills – then you should notify the companies first so that they are aware of why the payments have stopped.

If probate is required to close the account, you can still use funds from the account to pay the funeral invoice and to pay any inheritance tax (IHT) prior to probate being granted:

To pay for the funeral you need to give the bank a copy of the funeral invoice and they will pay the undertaker direct.
To pay any IHT most banks and building societies, including National Savings & Investments (NS&I), use HMRC’s Direct Payment Scheme.

What happens to a joint bank account after death?

In the UK bank and building society accounts are generally held by the joint account holders as ‘joint tenants.’ This means that when one account holder dies, the funds in the account automatically pass to the surviving account holder by the principles of survivorship.

This happens automatically, regardless of the terms of the deceased’s will or the rules of intestacy (when someone dies without a will) and probate is not required. The surviving account holder can simply provide the bank or building society with the death certificate and the account will be transferred into the survivor’s name.

If joint holders have signed a declaration of trust stating that the account is held as ‘tenants in common’, then on the death of one of the account holders their shares passes under the terms of their will or intestacy.

What happens to premium bonds when someone dies?

If the value of all savings with NS&I is less than £5,000, then normally they will close the accounts without probate. Again, the PR will need to contact NS&I so see what their requirements are.

With premium bonds the PR can either cash them immediately or keep them in the draw for 12 months after the date of death in case they win any prizes.

What happens to a pension when someone dies?

If the deceased was receiving a state pension, then you should notify the pension service that they have died. You can use the Tell Us Once service to do this and the registrar should give details about this when you register the death. The Department for Work and Pensions will then calculate whether there is anything due to the estate or a refund due to them.

If the deceased had a personal or workplace pension, then you should contact the provider to see what the next steps are.

Depending on the type of pension the deceased held it may provide benefits to financial dependents or to the estate if there are no financial dependents. Often the pension trustees will decide where the funds are paid, and the deceased may have completed a nomination form to give details of their wishes. In some circumstances a reduced pension will continue to be paid to the surviving spouse or civil partner.

About the author

Rachel Collett is a Chartered Legal Executive specialising in probate at Wright Hassall.

Find out more

The Death Notification Service

Pay your Inheritance Tax bill (GOV.UK)

Tell Us Once (GOV.UK)

Image

Getty Images

Publication updated

11 September 2023

Any opinion expressed in this article is that of the author and the author alone, and does not necessarily represent that of The Gazette.