When a loved one passes away, it can be a difficult and emotional time. In addition to grieving, there are often many financial and legal affairs that need to be handled. One common task is closing any accounts the deceased person held, such as bank accounts, credit cards, utilities, and more. Closing these accounts is important to stop continued billing, protect against identity theft, and settle the person’s estate. However, you may be wondering what is involved in closing an account for someone who has died and whether you are allowed to do so. Here is a comprehensive guide on how to close accounts for someone who has passed away.
Who Can Close a Deceased Person’s Accounts?
The person who can legally close accounts after someone dies depends on a few factors:
Did the deceased person have a will?
If there is a will naming an executor, also called a personal representative, then the executor named in the will has the legal authority to close accounts. The executor will need to provide a copy of the death certificate and will proving their executorship to access accounts.
Was there no will but you’ve been named administrator?
If there is no will, the next of kin will need to petition the probate court to be appointed as administrator of the estate. Once appointed as estate administrator, this person will have the same legal rights as an executor to close accounts.
Are you a joint account holder?
For accounts that are jointly held, like joint banking accounts or jointly held credit cards, the surviving account holder can close the account. You will need to provide a copy of the death certificate.
Are you the deceased person’s power of attorney?
If you were appointed as power of attorney prior to the person’s death, that power is revoked upon death. You no longer have legal authority to close accounts unless you are also named executor or administrator.
Are you an authorized user?
If you were only an authorized user on a credit card or joint checking account, you do not have the authority to close the account. Only the primary account holder or other legally appointed representative can close accounts.
So in summary, closing accounts can be done by an executor, administrator, surviving joint account holder, or in some cases, next of kin. The key is proving your legal authority with documentation.
How Long Do I Have to Close Accounts?
While there is no set timeframe for closing accounts, it is wise to begin the process as soon as possible. Many financial institutions and creditors require notice within 30-60 days of the death. The sooner accounts are closed, the less likely late fees or interest will accrue. It also protects against identity theft and preserves the deceased’s credit. Expect the process to take several months to a year depending on the complexity of the estate.
Documents Needed to Close Accounts
When closing accounts, these are typical documents the institutions will require:
- Certified copy of the death certificate – this proves the person’s death.
- Letters of Administration or Letters Testamentary – this proves your authority to act on behalf of the deceased’s estate.
- Photo ID – To prove your identity.
- Any account statements – Providing account numbers can help expedite closure.
Some institutions may have their own forms you’ll need to complete. Having multiple copies of each document is helpful since you will need to contact many companies.
How to Close Specific Accounts
The general process for closing any account is:
- Contact the institution by phone or certified mail. Ask their procedures for closing an account for a deceased person.
- Provide required documents proving your authority and the death.
- Complete any required forms and provide other information requested.
- Set a closure date and follow up to confirm account is closed.
- Cancel any recurring payments or withdrawals associated with the account.
Here are tips on closing some common accounts:
Bank Accounts
For bank accounts like checking and savings accounts, contact the bank with a death certificate and identification. Ask for remaining balances to be issued to the estate. Ensure any linked debit cards, online banking access, and checks are deactivated. Destroy any unused checks.
Brokerage Accounts and Stocks
Investment accounts will require a death certificate and your ID and authority. Remaining securities can be transferred to a beneficiary or sold and dispersed. Retirement accounts like 401ks may have specific procedures.
Life Insurance Policies
Life insurance companies will require a death certificate and your authority documents. Remaining benefits will be paid out directly to listed beneficiaries.
Credit Cards and Loans
Contact lenders for all credit cards, auto loans, mortgages, etc. Provide documentation to close accounts and pay any outstanding balances through the estate. Stop automatic payments.
Utilities
Contact utility providers including electric, water, cable/internet, cell phone, and home security. Cancel services and retrieve any deposits. Forward final bills to the estate administrator.
Memberships
Cancel memberships like gyms, clubs, subscriptions. Receive any refunds if applicable.
Government Accounts
Notify the VA, Social Security, Medicare, passport office, IRS, and Post Office. Return government-issued IDs and cards like a passport, driver’s license, Social Security card, and VA card.
Digital Accounts
Closing digital accounts can be challenging. If possible, access and download important data from the deceased’s computer and emails into a digital archive. Delete or memorialize social media accounts. Remove deceased from any shared streaming service accounts.
Getting Help With Closing Accounts
Closing accounts after a death can be complex, especially with large estates. Here are options to get help:
- Hire an attorney – They can guide you through the probate process and closing accounts.
- Enlist accountant services – Accountants can help organize financial records and prepare final taxes.
- Use estate closing services – Companies like EstateExec can take care of closing accounts on your behalf.
- Ask institutions for help – Many banks and creditors have departments to help with deceased accounts.
Don’t be afraid to ask institutions for help walking through their account closure process.
Closing Joint Accounts
For accounts jointly owned with the deceased, like joint checking accounts or joint credit cards, the process is a little simpler.
Provide a death certificate and ID to the financial institution. Have accounts removed from the name of the deceased. Any remaining balances will be issued to you outright as the surviving owner, or you can request balances be paid to the deceased’s estate.
Be sure to start using new accounts for any recurring payments so that you don’t encounter issues with closed joint accounts.
If You Can’t Close An Account
In some cases, an account cannot be closed right away. Two examples are:
The account is in collections
If there is an outstanding balance owed on a credit card or loan, the account may be sent to collections. Work with the collections agency to pay the remaining balance through the estate.
A deceased person remains on a joint mortgage
For home mortgages, lenders may require the surviving co-borrower to either pay off the existing mortgage or continue making payments before removing the deceased from the mortgage.
Work closely with creditors to resolve these situations before closing accounts. Paying off debts can allow accounts to finally be closed.
Checks Issued After Accounts Are Closed
As you close accounts, remaining balances will be paid out either electronically or via check. Be cautious with any checks issued in the deceased’s name after account closure.
Either void the checks and request a reissue to the estate, or cash the checks by endorsing as the estate executor. This prevents potential fraud.
Notify institutions anytime you receive checks made out to a deceased person. It’s best to have all final payments reissued to the appropriate estate account.
Protecting Against Fraud
To prevent identity theft or fraudulent activity after an account holder dies, take these precautions:
- Act quickly to close accounts.
- Enroll the deceased in the Social Security Death Index.
- File a fraud alert with credit bureaus regarding the deceased’s identity.
- Keep the person’s cards, driver’s license, SSN card, passport secured.
- Monitor credit reports and financial statements for suspicious activity.
- Destroy any unused checks and deactivate debit/credit cards.
Freezing credit reports can also protect against fraudulent new accounts.
Handling Credit Inquiries After Death
You may start receiving calls from creditors about outstanding debts. How you handle them depends on your legal authority:
- As executor/administrator, compile debts to be paid by the estate.
- Joint account holders can pay remaining balances from personal funds.
- For inquiries with no authority, direct them to the estate executor.
Do not make payments or promises from your own funds without legal authority. This mixes personal and estate debts.
Cancel Ongoing Services and Subscriptions
Don’t forget to cancel any ongoing services, memberships, and subscriptions in the deceased’s name. These include:
- Newspaper and magazine subscriptions
- Lawn care or housekeeping
- GYM memberships
- Software subscriptions
- Book or music clubs
- On-demand services like Audible or Netflix
Contact each company to cancel services and receive any applicable refunds.
Filing Final Tax Returns
One last requirement is filing final state and federal tax returns for the deceased. The executor will need to file taxes on behalf of the estate for any income earned in the year of death.
Notify the IRS of the person’s death and establish an estate EIN if necessary. Consider working with an accountant knowledgeable on final taxes.
Digital Legacy
Close online and social media accounts or memorialize Facebook profiles into legacy accounts. Remove the deceased from any shared media subscriptions.
Securely archive important computer files, photos, or emails into a digital legacy for beneficiaries. You may need a digital estate plan to legally access some online accounts.
Take Your Time to Grieve
Closing accounts is likely the last thing on your mind immediately after a death. Don’t feel rushed by institutions to close accounts right away. Moving slowly allows time to grieve and adjust to your loss.
When you are ready, closing accounts is an act of service and love to settle affairs for someone who has passed.
Hiring Help for Estate Closing
Consider hiring professionals to help close accounts, pay outstanding debts, cancel services, file taxes and distribute assets:
- Probate lawyers can guide the estate settlement process.
- Estate executors can act as legal personal representatives.
- Accountants can file final tax returns.
- Estate closing services can close accounts on your behalf.
This can lessen the burden, especially for large or complex estates. Take time to grieve without the stress of closing accounts.
Notify Contacts and Advisors
Contact employers, business partners, accountants, financial advisors, lawyers, doctors, dentists, and anyone else close to the deceased to notify them of the death. They may need to transfer records, close out business relationships, or direct final payments.
What About Any Assets?
Any assets like real estate, vehicles, or other property that is solely owned by the deceased will need to go through probate court to get distributed to heirs. As executor, you’ll need to inventory assets and submit to the court for beneficiary distribution approval.
Accept That Closure Takes Time
Fully settling affairs and closing accounts can takeanywhere from 6 months to a few years. This allows sufficient time to notify contacts, pay off debts, file taxes, and distribute assets. Don’t feel rushed by institutions but act in a timely manner.
Checklist to Close Accounts
Here is a checklist of common accounts to close along with key details to track:
| Account | Account Number | Balance | Notes |
|---|---|---|---|
| Checking | |||
| Savings | |||
| Investment/Brokerage | |||
| 401k/Retirement | |||
| Life Insurance | |||
| Credit Cards | |||
| Personal Loans | |||
| Auto Loans | |||
| Mortgage | |||
| Utilities | |||
| Insurance | |||
| Memberships | |||
| Government | |||
| Digital Accounts |
Paying Outstanding Debts
Before closing accounts, ensure any debts are paid:
- Credit cards and loans – Pay through the estate.
- Medical bills – Settle through health insurance and estate.
- Taxes – File any returns owed.
- Mortgage and utilities – Keep current until accounts closed.
Paying off debts can allow accounts to fully close. Outstanding debts may delay probate.
Notify Debtors of Estate Contact
When needed, provide creditors and debt collectors with the estate executor’s contact information. This ensures they have updated information to contact someone authorized to pay debts through the estate.
Settling the Estate
After closing accounts and paying debts, the remaining assets in the probate estate can be distributed. The estate executor will need to request the probate court approve asset distribution according to the will or laws in your state if there was no will.
Beneficiaries will receive a final accounting from the executor listing assets, debts, and final distribution.
Protect Yourself From Fraud
Unfortunately, scam artists do target grieving relatives. Be cautious providing personal information or paying any supposed debts. Verify requests are valid before acting. Shred financial paperwork and statements for sensitive accounts.
Monitor your own credit reports regularly for any suspicious activity after a loved one’s death. Place a free credit freeze if needed.
Seek Legal Guidance If Needed
Consult an attorney who handles estate administration if you encounter any problems settling accounts or debts. There are strict timeframes and protocols.
An attorney can help resolve creditor disputes or collections harassment legally. They can also help access accounts if institutions won’t cooperate with the estate.
You’ll Get Through This
Closing accounts is one of the many burdens that come with losing someone close. It can be overwhelming. Remember to take it step by step without getting bogged down in details.
Be patient and kind with yourself throughout this process. With time and help when needed, you will get through the tasks of closing accounts and settling an estate.