Why You Should Open an Estate Bank Account if You’re an Executor

Are you an executor for a family member, friend or another person? An executor of a will is someone appointed to administer the will and carry out the last wishes of someone when they die. 

Opening an estate bank account can make your job a little easier. Here’s what to know about this unique type of account. 

What Is an Estate Bank Account?

An estate bank account is a special type of bank account that holds an estate’s money. You can use the money in this account to pay taxes, loans, mortgages, car payments and utility bills during the probate process and to pass along assets to beneficiaries. 

What Are the Benefits of an Estate Account? 

When someone dies, their assets are usually frozen. Opening an estate bank account can make it easier for you to transfer the frozen assets so you can pay out what you need. It also gives you a place to deposit payments issued to the person when they were alive and to deposit life insurance proceeds.  

With an estate bank account, keeping records for taxes and other administrative tasks can be easier. The estate money is separate, not mixed in with any personal funds. 

How Does an Estate Account Work?

With an estate account, you can’t simply withdraw money. You need to submit a claim to the court that explains what you want to withdraw and what you’re using it for. That protects the beneficiaries since you can only use this money to pay approved expenses.

If you’re the executor for your recently deceased spouse, you may think you don’t need an estate account, especially if you have joint accounts. But it may still be a good idea, since it makes it easier to keep the estate’s funds and your own funds separate.

What Do I Need to Do When I’m Opening an Estate Bank Account?

You’ll need certain documents to prove it’s legal to open the account. They include:

• The death certificate
• The person’s Social Security number
• An Employer Identification Number for the estate, since the estate is considered a separate entity — it’s not the same as the person who died.
• Other documents needed by your bank. For example, you might need to prove that you are the executor.

The estate bank account can be a checking, savings or money market account. Most people find it convenient to open a checking account. 

It can simplify things if you open the estate account at the same bank where the deceased person had their accounts. If that doesn’t work for you, opening it in the same state where they lived is a good idea. Otherwise, fees may be

Do I Have to Open an Estate Account?

No, while opening an estate bank account is recommended, it’s not required.

What Happens After All the Accounts Are Settled?

 Once you’ve settled any taxes and debts, distributed assets to beneficiaries and finished the probate process, the estate account can be closed. These accounts are designed to be temporary.

Support During Trying Times

When you’re carrying out your responsibilities as an executor, you may also be grieving if you had a personal relationship with the person who passed. Farm Bureau’s financial advisors understand that there are people behind the numbers. Reach out to connect with someone who cares.