Frozen Accounts – How to avoid them after the death of a loved one.

Frozen Accounts – How to avoid them after the death of a loved one.

Here is what often happens, but does not need, to with proper planning. One of the spouses has an account where only they are the single owner. That account is also the one that is used to pay bills. When the account owner dies, that account is now part of their probate estate, and the rules around the bank account become stricter. In most cases deposits can continue, but withdrawals are prohibited.

What can you do to make sure that your accounts aren’t frozen?

1.     Name your spouse or significant other as the payable on death beneficiary. This allows access to the account simply by providing identification and a death certificate. Further still, the account stays out of the probate process. However, please note that this strategy only provides access upon death. Incapacity is another issue.

2.     Jointly owned accounts. If you jointly own an account with your spouse or significant other. This strategy will continue access to the account.

3.     Place the account into a revocable living trust. This is one of the most effective methods for protecting your significant other / spouse. This allows anyone who is the trustee of the trust to manage the funds in the account. This means that if you are incapacitated or both you and your spouse / significant other are incapacitated your funds can continue to be managed.

Ask yourself the following questions:

●      Who owns the account in question?

●      Have you identified and formally named pay-on-death beneficiaries?

●      How is the bank account currently titled?

●      Do you have a trust and has the title to your bank account been changed to the name of the trust?