With all the considerations and details that survivors must see to after someone dies – not to mention grieving – the problem of what to do about the decedent's savings account might fall through the cracks. Legal requirements for dealing with such an asset depend largely on how the decedent held the account – in his sole name, or with someone else.
The Probate Estate
If the savings account was in the decedent's sole name, you have no responsibility for closing it unless you're the executor of his estate. The account becomes part of his estate to be disbursed to his beneficiaries according to the terms of his will. If he did not leave a will, the money passes to his beneficiaries in an order of succession determined by state law. In either case, the executor will most likely close the account as part of the probate process and use the money to pay the decedent's creditors and the costs of running the estate. Beneficiaries may receive anything left over.
Power of Attorney
If the decedent gave you power of attorney to handle his affairs before his death, you have no legal right or responsibility to close his savings account when he dies. Your power of attorney terminates with his death. If he held the savings account in his sole name, it passes to his estate just as though he had never appointed you. Your only responsibility would be to turn over to the executor any passbooks, statements or documents in your possession.
If you held the savings account jointly with the decedent, you don't necessarily have to close it. You can simply have his name removed. This is typically a matter of taking a copy of the death certificate to the banking institution. Even if you don't do this, you can continue to access the money in the account as a joint owner. An exception exists if Social Security benefits were direct-deposited to the account after his death. Funeral directors often instruct Social Security to stop making payments, but if this doesn't occur and the account receives a payment, you're responsible for returning the money to the government. Because you and the decedent held the funds jointly, the account does not have to pass through probate for distribution to other heirs.
"In trust for" savings accounts -- also sometimes called "payable on death" accounts -- are treated much as joint accounts when the account owner dies. The money transfers directly to the beneficiary without necessity of probate, so the funds are immune from the decedent's creditors and can't be used to pay the costs of operating his estate. If you're the beneficiary, closing the account is usually just a matter of taking the death certificate to the bank. The bank should turn the contents of the account over to you.
Beverly Bird has been writing professionally for over 30 years. She specializes in personal finance and w, bankruptcy, and she writes as the tax expert for The Balance.