What happens after the death of bank account holder?
POSTED BY ON November 26, 2018 COMMENTS (21)
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.
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
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
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