December 8, 2017
How a deceased person’s bank account will be treated after they pass will depend on how they owned the account. Several different questions need to be answered in order to determine who gets the bank account funds, including:
- Was the deceased person the sole owner of the account?
- Is there a named beneficiary?
- Did the decedent have a will?
As with most estate planning matters, you can have full control over who will get your bank account funds when you pass by creating an estate plan. However, individuals who pass without an estate plan may have their assets distributed in unintended ways.
Account Ownership and Beneficiary Designations
If you owned the account jointly with another person or named a beneficiary, the account will pass to that person. This is true even if you did not have a will.
Bank accounts and certain other assets with joint owners or designated beneficiaries are transferred outside of the probate process. If your total probate assets are under North Carolina’s threshold for small estates, your estate may qualify for a simplified probate procedure as well.
Naming a beneficiary for your bank accounts and retirement accounts is a simple way to keep assets out of probate and clearly designated you should receive the accounts. However, you should still have a will to control other types of property.
Accounts That Go Through Probate
If a bank account has no joint owner or designated beneficiary, it will likely have to go through probate. The account funds will then be distributed—after all creditors of the estate are paid off—according to the terms of the will.
When a person passes without a will, North Carolina’s intestacy laws control who receives their property. Assets typically pass to a surviving spouse and the decedent’s children first. If a decedent is unmarried and childless, assets with go to the next of kin, beginning with parents, then siblings, and finally more distant relatives. This situation is not ideal because the decedent does not have any control over who receives their property.
To control who will get your assets, have an estate planning attorney draft your will and review your situation to determine if any further estate planning strategies are needed.
King Law handles estate planning matters in North and South Carolina, including wills, trusts, and estate administration. Follow us on Facebook for more information and updates on legal issues.