When a loved one dies, they usually leave bank accounts as their property. You are now left with the problem of how to claim the money in the deceased’s bank account. How to claim it would depend on a number of factors, such as: whether the account is held jointly, whether there is a beneficiary in the bank account, and how much is the estate of the deceased. If you have a dispute or claim regarding ownership of the deceased’s bank accounts, call us at 718-509-9774 or send us an email at email@example.com.
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How to claim a deceased’s bank account when it is held jointly with another person
When the account is held jointly by the bank account owner with another person, there is a presumption that the bank account is held jointly with rights of survivorship. In this case, when one bank account owner dies, the entire proceeds go to the surviving bank account owner without the need for probate.
There are instances, however, when parties dispute the ownership of the joint bank account, especially in bank accounts owned by both a parent and a child. The child’s other siblings will claim that the child was only added to the parent’s bank account in order to help the parent with the parent’s financial transactions. The child, on the other hand, will claim that he is a joint bank account owner with rights of survivorship. If you have a dispute regarding ownership of a joint bank account, mere notice to the bank to stop the transfer to the surviving owner is enough. Should you need assistance in sending this notice, call us at 718-509-9774 or send us an email at firstname.lastname@example.org.
In New York, in order to apply the presumption of rights of survivorship created under NY Banking Law § 675, the courts will require the submission of evidence showing that the joint owners intended to create a bank account with rights of survivorship. Evidence to show the intent of the joint bank account owners usually takes the form of the signature card or ledger which should include words of survivorship.
If the signature card or ledger does not include words of survivorship, there will be no presumption of survivorship on a joint bank account. If the signature card or ledger includes words of survivorship, a presumption of joint tenancy with rights of survivorship arises. However, this presumption can still be rebutted under NY Banking Law § 675(a) by showing that the bank account was opened for the convenience of one account owner only. NY Banking Law § 678 provides the establishment of and defines a bank account for convenience.
How do you prove that the bank account was established for convenience only?
The court will take into consideration several factors, such as the monetary contribution of both bank account owners into the bank account, whether one bank account owner was not making any withdrawals from the account except for the use of the other bank account owner, and whether one joint bank account owner was aging and in need of assistance with his financial transactions.
In Matter of Najjar, 195 A.D.3d 1483 (2021), the court denied the motion to declare the joint bank accounts in the name of the surviving bank account owner because the evidence showed that the bank accounts were solely funded by the decedent who was already in her 80’s, that the other surviving bank account owner was added to the bank account as a joint owner only later on in decedent’s life, and that payments out of the account were made only for decedent’s benefit.
How to claim a deceased’s bank account when there is a beneficiary
When the deceased has designated a beneficiary for his bank account, the only person who can claim the proceeds of the bank account is the designated beneficiary. Usually, these types of bank accounts with a beneficiary are bank accounts with a payable on death or transferable on death designation. Similarly, Totten trust accounts or bank accounts that are held in trust for a particular beneficiary can be claimed only by that beneficiary when the bank account owner dies.
When claiming the proceeds of the deceased’s bank account, the beneficiary usually just needs to go to the bank with the proper identification and present a certified copy of the bank account owner’s death certificate. The bank representative will then pull out a copy of the form filled out by the bank account owner designating you as beneficiary and will ask you to fill out a few forms to create an account so that the proceeds can be transferred to your account.
Despite the fact that Totten trust accounts and bank accounts that are payable on death to a beneficiary do not pass through probate, they are still subject to the creditors of the deceased depositor’s estate, the deceased depositor’s executor or administrator’s claims, and claims of the deceased depositor’s spouse (since they are still considered testamentary substitutes).
If the executor/administrator, creditor, or spouse of the deceased depositor has a claim, the bank can only be stopped from transferring the funds to the beneficiary if there is a court order. Mere notice from the spouse, executor/administrator, or creditor to the bank is not sufficient to stop the transfer of bank account proceeds to the designated beneficiary. This rule is opposite to the rule in joint bank accounts where mere notice, and not a court order, is enough to stop the transfer of funds to the surviving co-owner.
How to claim the deceased’s bank account when the deceased is the sole owner
When the deceased is the sole owner of the bank account, how to claim the proceeds would then depend on whether the estate is small or not. When the deceased’s estate is small, you can claim the proceeds of the bank account using a small estates affidavit. When the estate is not small, you need to go through probate, and the banks will require you to present letters testamentary or letters of administration in order to release the bank account proceeds to you.
Small estates affidavit
In New York, a small estate is an estate where the deceased had less than $50,000 in personal property, no real property, and no wrongful death or other lawsuit belonging to the estate. All these conditions have to be met in order for the estate to be considered small. For example, even if the deceased had no real or personal property but had a cause of action for wrongful death and conscious pain and suffering against the nursing home, then the estate is not small. You also need to exclude in your computation of the estate non-probate assets, such as bank accounts with a beneficiary or held jointly, trust property, and other property held under tenancy by the entirety.
In a small estate proceeding, the Surrogate’s Court still appoints a voluntary administrator or executor. However, the procedures in small estate proceedings are simpler and faster than regular probate proceedings.
Under the Surrogate’s Court Procedure Act (SCPA) § 1310, certain persons can collect up to $50,000 of the deceased person’s assets in the following manner:
- Upon death, the surviving spouse can collect up to $30,000 from the bank by showing an affidavit executed by the spouse stating that the payment and all other payments received by the spouse from all institutions do not exceed $30,000.
- Thirty days after the death, the surviving spouse, child over 18 years of age, parent, sibling, niece or nephew (in that order of entitlement) or a creditor who paid funeral expenses can collect up to $15,000 from the bank by executing an affidavit, stating the death of the decedent, the relationship, that no fiduciary has qualified or been appointed, the names and addresses of the persons entitled to and who will receive the money paid, and that such payment and payments made do not exceed $15,000 in total.
- Six months after the death, a distributee or creditor can collect up to $5,000 (to the extent that the funds are not exempt from claims of other creditors) by executing another affidavit, stating the date of decedent’s death, that no fiduciary has qualified or been appointed, that decedent was not survived by a spouse or minor child, that affiant is entitled to payment, and that such payment and all other payments under the section does not in aggregate exceed $5,000.
Sometimes, banks are not used to seeing a small estates affidavit and would still require the issuance of letters of administration or letters testamentary in order for you to access the bank account, no matter how small. When this happens, you need to assert your rights, show the relevant statute (SCPA § 1310), and ask to speak to the supervisor, manager, or legal department. Should you need assistance, you can call us at 718-509-9774 or send an email at email@example.com.
Letters testamentary or letters of administration
If the estate is not small, the bank will require you to submit letters testamentary or letters of administration before releasing the deceased’s bank account proceeds to you. In order to get these letters, you need to file a petition for probate or petition for administration. If your need is urgent, you can also request for the issuance of preliminary letters testamentary so you can immediately manage the estate and pay the estate debts, as they become due without incurring interest or penalties.
How to claim a deceased’s bank accounts is simple and straightforward if there is no dispute regarding ownership. However, when disputes arise, litigation normally ensues. Banking rules are complex, and you will require legal expertise in ensuring that you are able to present a strong case regarding your claim. We have experience in representing both sides of a claim, beneficiaries and executors, and we know the defenses and arguments one can raise in this type of case. Should you need assistance regarding bank accounts, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York, NY, Brooklyn, NY and Queens, NY. You can call us at 718-509-9774 or send us an email at firstname.lastname@example.org.