What happens to a bank account when someone dies?

• Bank accounts with named beneficiaries (called “payable-on-death” or POD designations) transfer directly to those people — no court involvement, no waiting. The beneficiary just needs a death certificate and valid ID.

• Joint accounts with rights of survivorship automatically belong to the surviving owner, though FDIC coverage drops from $500,000 to $250,000 after the six-month grace period.

• Accounts without beneficiaries, a will, or a trust go through probate court — a process that typically costs $1,500 to $7,000 in legal fees and can take six months or longer.

• Adding a beneficiary to your bank accounts takes about 10 minutes and is the single most effective step you can take to protect your family from unnecessary legal complications.

When someone dies, what happens to their bank accounts depends almost entirely on one thing: whether they set up a plan for that money. Accounts with a named beneficiary or joint owner transfer quickly — sometimes within days. Accounts without either can get stuck in probate court for months, costing families thousands in legal fees during an already difficult time.

The good news: the steps to avoid this are straightforward, and most banks let you set them up for free.

Four scenarios can play out, and the outcome depends on what the account owner set up while they were alive.

• If there’s a named beneficiary: This is the smoothest path. A beneficiary is someone specifically chosen to inherit the account. Banks call this a “payable-on-death” or POD designation. The beneficiary brings a certified death certificate and government-issued ID to the bank, and the funds transfer directly — no lawyers, no courts, no waiting. Most banks process these transfers within a few business days.

• If there’s a will with an executor: The will names an executor (the person legally responsible for distributing assets), but the executor can’t access the bank account until probate court grants permission. This requires submitting a certified death certificate, the original will, and a petition to the court. Probate timelines vary by state, but the process commonly takes three to six months even for simple estates.

• If there’s a trust with a trustee: A revocable living trust bypasses probate entirely. The trustee (the person managing the trust’s assets) can distribute the money according to the deceased’s wishes without court approval — as long as the bank account was properly titled in the trust’s name. If you’re considering this route, talk to an estate planning attorney about how to set up a trust.

• If there’s no planning at all: Without a beneficiary, will, or trust, the probate court appoints an administrator to handle everything. This person distributes assets according to your state’s intestacy laws — not the deceased person’s wishes. The process typically takes six months to over a year and can cost $1,500 to $7,000 or more in court and attorney fees.

Joint accounts with “rights of survivorship” — which is the default at most banks — are the simplest situation. The surviving owner keeps full access to the account immediately. No paperwork, no court involvement, no interruption.

That said, confirm with your bank that your joint account includes survivorship rights. Some states allow joint accounts without this feature (called “tenants in common”), which means the deceased person’s share could go through probate instead.

Rights of survivorship may not apply to authorized signers

Authorized signers are not the same as joint owners. If someone was an authorized signer on an account (meaning they had permission to make transactions), they don’t own the funds. Their access ends when the account holder dies.

The death of a joint account holder affects FDIC insurance coverage. Joint accounts normally receive up to $500,000 in protection, but that drops to $250,000 when one owner dies. The FDIC provides a six-month grace period at the higher coverage level, giving survivors time to redistribute funds to maintain full insurance protection.

Even without a will, a named beneficiary on the bank account still inherits the money directly. Beneficiary designations override the absence of a will — this is why adding one is so important.

But if there’s no will AND no beneficiary, the situation gets more complex. The state appoints an administrator to handle the estate. This person first pays any debts the deceased owed, then distributes remaining money according to state inheritance laws. In most states, the money goes to the spouse and children first, then to other relatives if there’s no immediate family.

Here’s a complete guide to what happens to all of your bank accounts after death.

Banks don’t have an automatic notification system. They typically learn about a death through one of two channels:

Family members or executors contact the bank directly — this is the most common way. You’ll need to provide a certified death certificate and the deceased person’s Social Security number. If you’re the executor or administrator, bring your “letters testamentary” or “letters of administration” — these are court-issued documents that give you legal authority to act on behalf of the estate. Your probate court issues these after the will is validated (or after an administrator is appointed if there’s no will).

Social Security Administration is usually notified by the funeral director, which stops future Social Security payments. However, this doesn’t automatically notify banks. Payments deposited after the date of death typically must be returned to the SSA.

The best thing you can do for your family is plan ahead. These steps take very little time and cost nothing at most banks.

Add a beneficiary to every account. Contact your bank and ask for a payable-on-death (POD) beneficiary form. Fill it out for each account — checking, savings, CDs, money market accounts. The beneficiary has no access to your money while you’re alive, and you can change the designation anytime. Life changes like marriage, divorce, or the birth of children are good triggers to review these.

Keep your beneficiaries informed. Give them the bank name and account numbers so they can locate and claim the funds quickly. According to [Bankrate’s 2026 Annual Emergency Savings Report], many Americans don’t have basic estate documents in place — and simply telling your beneficiaries where your money is can make a significant difference.

Consider consolidating accounts. Fewer accounts mean less paperwork for your heirs and lower chances of money being forgotten or lost. If you’re searching for accounts left by a deceased relative, check your state’s unclaimed property database — banks are required to turn over inactive accounts to the state after a set period, and you can often reclaim this money online.

Review your setup regularly. Beneficiary designations supersede what’s written in a will. If your will says one thing and your POD designation says another, the bank follows the POD. Keep them aligned.

A little planning now can save your family significant stress during an already difficult time. The simplest step is naming beneficiaries on all your accounts — a process that takes just a few minutes but can save months of legal complications.

If you haven’t set up beneficiaries yet, contact your bank to request the forms. While you’re at it, consider whether a high-yield savings account or CD might help your money grow more while you’re alive, giving your beneficiaries even more to inherit.

For more complex estates, work with an attorney to create a will and potentially a trust. These tools ensure your wishes are followed and can help minimize taxes and legal fees for your survivors.