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.