The death of a beloved relative is one of the most difficult ordeals a person can go through. While it is true nothing can prepare a person for such a loss, taking certain steps ahead of time can help ease some of the financial burden shouldered by those left behind.
For instance, some family members – in an effort to cover household expenses and other bills after a loved one’s death, find themselves unable to do so because their joint accounts have been frozen while the estate is in probate. To learn more about how to prevent your own bank accounts from being frozen after your own passing or the death of a partner, please don’t hesitate to reach out to Alan G. Orlowsky for help.
Who is Most at Risk of Having Their Accounts Frozen?
Ending up with a frozen bank account after a loved one’s death can arise in a variety of situations, but tends to occur most often when all of a family’s bills are paid out of a single account, which also happens to be under only one person’s name. In these cases, when the account holder dies, that account often becomes part of the decedent’s estate, which means it will be extremely difficult to access. Fortunately, there are a few different ways families can avoid this scenario.
Identifying a Payable-on-Death Beneficiary
One of the best ways to prevent a joint account from being frozen is to identify a payable-on-death beneficiary, which names someone else, usually the other person with access to the account, as a beneficiary. This will allow the beneficiary to gain ownership of the account merely by presenting an ID and certificate of death to the bank. Taking this step also keeps the account out of the decedent’s estate, reducing delays and providing easier access to his/her beneficiaries. It’s important to note that identifying a payable-on-death beneficiary only allows access upon a person’s death and doesn’t apply to incapacitation – unless the parties also have a signed financial power of attorney.
Placing the Account in a Revocable Trust
Another way to avoid having one’s accounts frozen is to place the account in a revocable trust. This allows the original account holder to retain control of the account during his/her lifetime, but upon that individual’s death or incapacitation, will give the named successor trustee access to the funds. Placing accounts in a revocable trust can also ensure a person’s funds avoid probate.
We Can Help You Plan
If you are worried your own bank account’s contents might become frozen upon your death or the death of a partner, you should assess your situation, including whose name is on the account. However, you do not have to go through the process alone. Please call 847-325-5559 to speak with the experienced Chicagoland area estate planning lawyers at Orlowsky & Wilson, Ltd. Attorneys at Law about how we can help.