What Happens to a Bank Account When Someone Dies?

More than 3 million people died in the United States in 2024, according to the CDC (opens in a new tab). Fewer than half of Americans had a will in 2021, Gallup found (opens in a new tab), so for a lot of families, the first time they learn how a bank handles a death is the week after one.

Here’s what happens to a bank account when someone dies. As soon as the bank is told, it freezes accounts in that person’s name alone. A joint account or a payable-on-death account goes straight to the co-owner or the named beneficiary. Everything else waits for someone with legal authority: an executor, an administrator appointed by a court, or an heir using their state’s small-estate procedure.

What happens to a bank account when someone dies?

The bank freezes it. Once it learns of the death, no one can withdraw from an account that was in the deceased’s name alone, and the bank may hold pending transactions like automatic payments and direct deposits, PNC explains (opens in a new tab). The money now belongs to the estate, and the bank releases it only to someone who can prove they have the right to it.

What that proof looks like depends on the account. Every case starts with a certified copy of the death certificate. From there:

How does a payable-on-death account work?

A payable-on-death account, also called a POD account or a Totten trust, names a beneficiary who gets the balance when the owner dies. It skips probate entirely. The beneficiary has no access while the owner is alive and can’t be stopped by the will afterward, which makes it the simplest way to leave a bank account to someone.

Deposit insurance covers these accounts generously. Since April 1, 2024, the FDIC (opens in a new tab) insures them at $250,000 per beneficiary, up to five, so a single owner can have up to $1,250,000 covered at one bank.

Deposit insurance doesn’t lapse at death

For six months after an owner dies, the FDIC insures their deposits as if they were still alive, under 12 CFR 330.3(j) (opens in a new tab). That gives the family time to retitle or move money that would otherwise go over the limit once the account belongs to someone else.

What happens to a joint bank account when one owner dies?

Most joint bank accounts are held with a right of survivorship. When one owner dies, the other owns the whole balance, no matter who deposited the money, and it never goes through probate.

An account set up as tenants in common works differently. The deceased owner’s share goes to their estate. And in the nine community property states, a surviving spouse may own half of money earned during the marriage even when it sits in an account in the other spouse’s name alone. Those states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin, per the IRS (opens in a new tab).

Can you withdraw money from a deceased person’s account?

No, not even with a power of attorney. A power of attorney ends when the person who gave it dies. The Uniform Power of Attorney Act (opens in a new tab), which many states have adopted, says so (that link is New Hampshire’s version), and the CFPB’s guide for agents (opens in a new tab) is clear that once the person dies, you no longer have the authority to act, even to pay a small bill.

Having the debit card and the PIN doesn’t change it. Only a joint owner, a POD beneficiary, or someone holding court papers or a small-estate affidavit can take money out. If a bill can’t wait, like the funeral home’s, ask the bank whether it will pay it directly from the account.

Do you need probate to close a bank account?

Not if the estate is small. Every state has a shortcut that lets heirs collect a modest estate without full probate, usually with a sworn affidavit, sometimes with a short court filing. The limits vary widely, and most of them leave real estate out.

Above those limits, the executor or administrator has to open probate and get letters from the court before the bank will release anything.

What happens to Social Security after someone dies?

Social Security isn’t paid for the month of death. If someone dies in July, the payment that arrives in August has to go back, along with any later ones, according to the SSA (opens in a new tab). When it was deposited directly, the Treasury can take it back from the bank, which debits the account. Don’t spend it, and ask the bank to return it.

A surviving spouse who lived with the deceased can claim a one-time $255 death payment. If there’s no spouse, an eligible child can claim it instead (SSA (opens in a new tab)).

What if nobody claims the account?

The bank eventually turns it over to the state. A dormant account, one with no activity for several years whose owner the bank can’t reach, goes to the unclaimed property office in the owner’s last known state, which holds it for the owner or the heirs. MissingMoney.com (opens in a new tab), backed by the state unclaimed property administrators, searches most states at once for free. If a relative died years ago, it’s worth a search.

A little savings in your own name

A freeze hits hardest the person who shared a life with the deceased. If both paychecks went into one spouse’s account and nothing was set up as joint or POD, the survivor can have rent due and no access to the money until the court papers come through.

A POD beneficiary on each account helps, and so does savings in your own name, enough to cover a month or two. Lodavo is a free app that makes building savings more rewarding. Saving earns you free tickets for weekly cash prize draws, and your money stays in your own bank account. It’s live in Canada and coming to the US, and the waitlist below is how you’ll hear when it reaches your state.

This article is general information, not legal advice. For a large estate, a dispute or a will that’s unclear, a probate attorney in the state where the person lived can tell you what applies.