Anuradha Singh
November 26, 2018
What happens after the death of bank account holder?
What happens to the orphan bank account once the account holder dies?
Have you ever thought how your family members will be able to access and claim the money in the bank if something happens to you? Today we will discuss this aspect and see what exactly happens once a bank account holder dies and what are the steps to be taken by the family members.
Whenever there is a sudden demise in someone’s family, there is a panic attack. There is mourning of losing loved ones and chaos in the family for few weeks, but ultimately life comes back to normal later.
A few months later, family member start collecting all the financial data like life insurance policies, locker keys, investment details, loan details etc. etc. But the most important thing is the bank account. Bank account is the key to someone’s financial life and getting access to it is critical.
Here are the steps to claim the money in bank account.
Withdrawal from ATM Card
Before one moves to the actual process, we should first look at the obvious thing. Find out if you have the access to the ATM/Debit card and if you know the PIN. Just go and withdraw the money from the ATM if possible over next few days.
If for some reason you are not able to access the ATM/Card, then it’s time to follow the process.
Step#1 – Approach the bank & Meet the bank officials
You should approach the bank and meet the bank manager and share about the account holder death. Ask him/her the procedure to claim all the asset from the bank. If possible, show them the proof that the account holder has passed away (like death certificate)
Then the bank with immediate effect will make the deceased account in a dormant state (a state in which the there is no withdrawal possible). However, the deposits are still possible, because it may happen that few payments / dividends are going to be credited in coming days
Step #2 – Submit the documents
Case #1 – Single account holder
If the bank account was in single name, then the nominee approaches the bank with the death certificate of the account holder including his own authenticity proof. Then the procedure of transferring money to the nominee starts and the account remains in the dormant state for 6 months to 12 months (differs from bank to bank).
Here are the Required documents:
- Application, stating that the account holder has passed away,
- Notarized death certificate
- FIR copy (if the deceased has passed in the accident and body is missing for some time )
- Authentic photo id proof (such as adhaar card, pan card, driving license etc…)
- Relationship with the deceased with proof,
- Nominee KYC documents (photo, pan card, and adhaar card)
Some additional documents if there is no nominee in bank account
Incase nominee is not mentioned, then the bank needs clarity on who is the rightful owner of the money. For that, they might need a written WILL, which will mention clearly about the owner of the bank account money.
If WILL is missing, in that case, the bank can ask you to bring succession certificate from court, which will be the legal document certifying who is the actual owner of the money.
Case #2 – Joint account holder – If the 1st account holder has passed away then the 2nd account holder can inform the bank with the application stating the 1st account holder has passed away and also to make the 2nd holder the 1st holder so that he/she can have access to the money
Required documents –
- Application stating the death of the 1st holder
- Notarized death certificate of the 1st holder
- FIR copy (if the 1st holder has passed in the accident and body is missing for some time)
- Authentic photo id proof of the 2nd holder (such as Adhaar card, pan card, driving license, etc…)
What if there is a dispute among family members?
It may happen that there are many people in family, who claim to be the legal heir of the deceased. Even if nominee is mentioned in the account, still the legal heirs may be different from nominee.
In this case, one has to move to court and apply for succession certificate which we talked about before. It’s a document which will certify the legal heirs.
Make sure your family does not face any issues
How do you make sure that your family members do not have to go through the problems while claiming back the bank account? Here are few things you can do
- Make sure your family knows the ATM PIN and net banking details
- Convert the bank account in joint name, so that anyone can access the account
- Make sure you mention a nominee among one of the legal heirs
- Write a WILL and mention about the beneficiaries very clearly
Let us know if you liked the article? Leave your questions if any, in the comment section and I will try to reply to all the comments and doubts.
My aunt passed away and she had no kids and she was separated from her husband but not legally. And we have no information about her husband, where he is and if he is still alive or not. She had a account in SBI with no nominee. I am his brother’s son. Can you guide me what should I do to claim her bank account and what documents it requires and from where. I would really appreciate If you answer my query directly on my email with complete directions. Thanks
Its very simple .. You just have to prove that you are legal heir .. Get a succession certificate from court , and submit it with your KYC details and death certificate!
Manish
My husband left a will but it was not registered. The bank is not releasing funds to me as per his will on the grounds that it is unregistered. How can they do that ?
Yes, it can happen . But ask bank to give it in writing because an unregistered will is also valid as per law
If wife withdraws from the account of deceased husband before notifying the bank about death, is that a crime?,
On ground level, not much if the amount does not run in big amounts.
The problem is that wife can not be assumed to be the final legal heir. What if husband has created a will giving all money to someone else, then its not her rightful money and becomes kind of crime only.
Manish
we should first look at the obvious thing. Find out if you have the access to the ATM/Debit card and if you know the PIN. Just go and withdraw the money from the ATM if possible over next few days.
Is this legal at all? If not, why this has been recommended as the first step?
My mother passed away due to Covid 19. After hee death me and my sister (both are nominees of my mother) withdrawn some lacs using mobile banking due to panic, with each other’s consent. Now we realised this step was not legal. What will be the next consequences? We both were aware of this financila activities, so it is for sure that neither me or my sister wont take any legal action against each other. My mom had no other successor. Please guide.
Unless there is some one who raises any dispute, I dont think you will face an issue in real life. BUt technically it was not legal.
My father expired in Dec 2020. He had prepared a will in 2013 and appointed me as his successor for all his belongings. Now the bank wants a consent from all other legal heirs. My mother and me are not on talking terms with my brother for many years due to property issues. He will not give consent for sure. What is the alternative for this then?
Is it not a registered WILL ? If not, then bank is right in asking for consent letter.
Manish
A will is not a compulsorily registrable document under the Registration Act, 1908. A will is attested by two witnesses. A claim can be made in bank on the basis of unregistered will supported by affidavit of at least one witness to the will. If there is any dispute regarding the will, then you have to file a probate petition in the court where you have to make implead all legal heirs and you can prove the genuineness of will by producing at least one attesting witness to the will before the Court. If Court decides the will as genuineness, you can based on court order make claim on the Bank for deceased’s money/ assets etc
Thats correct!
Hi sir,
My father was deceased (dead) and he has a business current bank account .my family members didn’t know about one of that bank details (even we didn’t have passbook and atm card) but we have a doubt that one of the person has withdraw all the amount from that bank.
Now. I am the elder son it has completed 5 years. I just enquired about a particular bank with my father’s andhra number
They said your father has 2 accounts 1 is savings & current accounts
What we can do with this information
Hi Hari
Not having all info like account number etc is really a pain for family members!. Check with bank, and ask them for all these details. Use RTI if you can!
Manish
IN my case my mom die April 2019 but they have not still released the money we have provided all legal heir doc like deceased death certificate # 3 heirs are there all aadhar card & pan card, with the notarized affidavit to the bank along with witness affidavit but they are saying witness should have x3 amount of deceased in their bank account. Like deceased have 100000 in bank account witnessed should have x3 amount in their both witness accounts mean 300000 in both witness account or fd or mutual fund. and asking for family tree certificate god knows what is family tree certificate & who provide it in Mumbai as BMC do not provide it can anyone help
I feel its a weird demand.. Which institution is this?
Manish
I also faced a similar demand from BOI. What is the significance this?
There is no basis I guess..
My mother expired in the year 2011, I was working in abroad, I couldn’t claim the amount, now I made the claim, but bank says the account is freeze, bring adhar card or passport or driving licence or voter id. I don’t have any of these documents of my mother. Bank said, they cannot do anything for this account, thilable 50,000 will go to government. Is there any way to unfreeze the account and get the money?
You obviously need to prove that you are the legal heir. How do they know that you are saying correct or trying to fool them.
You need to bring the documents
I have the document from thasiltar for legal heir, but my mother account is freeze, they need my mother’s adhar card or driving licence or passport or pan card for address proof. I don’t have any of these but some other id proof are available for bank not accept.
Bank will always accept the standard address proofs which are as per RBI direction.
suppose if i have online access of deceased person, then can i transfer the whole amount to another bank account.
Yes, if you have all passwords and OTP access, then you can do it
This is not correct from a legal stand and using the atm card or internet to access the account of a deceased person is a crime and the bank is entitled to take legal action
RBI has issued a circular which clearly mentions the process and it does not take 6-12 months to get the money transferred to a nominee / survivor account
what if someone made the transaction by mistake and wants to rectify the error?
Sadly, you cant do much .. try to not to make the ERROR ..
Thank you so much sir for this information, this is very useful for me and my grand father
Hey Shreyansh
Glad to know that you liked the article.
Please share it on your social media profile so that it can reach more and more people !
Manish
What if the nominee too dies. For e.g. there is a family with two kids. Wife is the nominee for all of husband’s investments and both die at the same time. Then what will happen to his investments?
Hi Traj,
Thanks for replying,
If the bank account holder and nominee both dies, then comes the legal heir into place. In the given case both the kids will be Legal Heir.
Vandana
Sharing an ATM pin/netbanking details with loved ones can sometimes backfire. There was a case few months back when a couple was denied refund of their own money by the bank. It was an individual account and the ATM card was used by the spouse to withdraw money. The ATM machine didn’t give the money while it was debited from their account. The consumer court gave verdict in favor of bank and denied refund to the couple.
It’s better to either add a nominee in all your investments/savings and write a will to share your assets and avoid any dispute within family after your demise.
Thanks for sharing your insight Mr. Amit
Vandana
I am in this situation now. Can I withdraw with the atm card? Will it cause any issues later from bank, even though no one from family will raise issue.
Thanks for commenting Anbu,
As far as I know, if you have the pin, you can withdraw from ATM the amount of money upto the maximum of daily withdraw-able amount.
Vandana
What if there is no nominee registered, but after the demise of account holder we access the internet banking and register the legal heir as nominee. After this can nominee go to bank and claim the money ?
No, its not possible because nominee has to be assigned by the account holder. Death certificate will have the date and time of death hence changing of nominee after death will come into light
Thanks for sharing good information. Can you please elaborate what is “succession certificate from court” and how to make it. Especially do all relatives consent is required? or any one can go to court and make it.
Hi Rakesh,
Thanks for commenting,
For succession certificate you can visit court and ask for it. The consent of all the legal heir is necessary and not of all the relatives.
Vandana
You have mentioned that in case of death of bank account holder, the family members should see if they have access to ATM Card and PIN and should/can withdraw money from the deceased account. However, some days back there was a case reported in news where a husband using his wife’s ATM card for withdrawal from her singly held account, was treated as an unauthorized person by SBI, though the wife had herself asked the husband to carry out the said withdrawal as she was undergoing post delivery bed rest and had shared her card and PIN with him.
On the backdrop of this case, please confirm whether withdrawal from singly held account of a deceased person, by his family members using the deceased ATM card, shall be treated as authorized withdrawal by the bank, when they later come to know that withdrawal has taken place after the date of death as indicated in death certificate.
Thanks for commenting Mr. Hemant,
As far as I know, withdrawal made by legal heir after the date of death, shall not be questionable.
Vandana
how to track if family members have no knowledge about the deceased family member’s investment & also not have any bank documents with them
Thanks for commenting Saba Kardar,
In that case, you have to have access to the deceased Email addresses so you can track all the investments.
Or You can visit the bank with the deceased aadhar or pan they will provide you the bank documments.
And in addition to that, Income tax returns and Bank statements can give an idea about the investments, also an advisor, CA or agent of the deceased person may be a good connect to get all the details of investments.
Vandana
Good article, all details included. Further, provide a few case studies & a model (or reference to article/will over internet)
1. When more than one claimant is likely, a clearly written will is most desirable
2. In spite of a Will, there may be some misunderstanding. So one should, in addition to a WILL, must prepare a note, how the process of division, and conflict resolution is to be handled.
3. In many cases when children stay away from parents, it will be difficult for them to know all properties, especially the finacial assets. Use of a consolidated money-management software to list and update in real time.
4. make it clear in the Will how expenses related post-death expenses (funeral, religious ceremony, charity at least to servants) are clearly mentioned.
Thanks for your suggestions Seetharama,
We will improve on it.
Vandana
Useful information.
Thanks