When someone dies, their bank accounts can no longer be used – not even to pay their final bills. Instead, the estate’s personal representative must open what’s called an “estate account.”
Estate accounts are specialized bank accounts created to manage the financial transactions and assets of a deceased individual’s estate. Once open, the estate account serves as a centralized hub for all the necessary financial transactions during the probate process, ensuring that the deceased’s debts are properly settled, and their assets are distributed following their will and any applicable laws.
Why are estate accounts necessary?
Essentially, using an estate account is the only clear way to make sure that the estate’s assets stay completely separate from those that belong to the personal representative. Having an estate account:
- Makes it easier to pay bills related to the estate, such as probate fees and taxes
- Establishes a clear record of how every dollar in the estate was spent
- Insulates the personal representative against allegations of theft
Before an estate account can be opened, the personal representative named in the testator’s will need to obtain the death certificate for the deceased, file for probate and obtain the court’s permission to act in their designated capacity. Then, the personal representative must obtain a tax ID number for the estate before the account can be opened.
As the personal representative of someone’s estate, you’re already aware that there’s a big job ahead. Leaning on experienced legal guidance to help you with the details and make sure that everything is handled correctly is wise.