What Is an Estate Account?
What Is an Estate Account?
An estate account is a bank account that is set up and opened specifically for the purposes of administering a person’s estate after they have become deceased. The person named as the estate executor will usually be in charge of setting up the estate account and managing it. The estate account should be set up shortly after the estate holder’s death.
An estate account will usually be the place where the decedent’s checking and saving accounts will be transferred to upon their death. These will be used to help with the costs of funeral expenses, estate distributions, and other estate administration matters.
Why Should an Estate Account Be Opened?
An estate account is generally necessary because in most states, a person’s bank accounts will be frozen upon their death. This means that the executor (or anyone else) won’t be able to use those accounts, for instance to write a check on behalf of the decedent’s estate. What they will be able to do, however, is to withdraw the person’s remaining bank accounts and place them into the estate account. From there, they will be able to conduct transactions on behalf of the estate using the estate account.
Also, after the person’s death, the estate executor or administrator may be dealing with additional money being donated to the person after their death. This can also be placed into the estate account, as well as any other monetary amounts (such as those resulting from sales of the person’s property).
What if There are Legal Disputes Over an Estate Account?
Under state laws, the duties of the executor include managing the deceased person’s funds in a reasonable and prudent manner. This includes not using the estate account monies for their own personal use, and investing or distributing the money according to the instructions contained in the estate planning documents. Failure to abide by these duties may result in a removal of the executor. The executor who is found to be at fault may be required to pay damages to the estate.
On the other hand, disputes between beneficiaries regarding the estate account do need to be handled initially by the estate administrator. At times, the estate administrator may be required to make decisions as to whether a certain person should receive beneficiary distributions or not. They may need to consult a will document, or file a case with the court if they need clarification.
Do I Need a Lawyer for Help With an Estate Account?
Estate accounts need to be set up and handled with great care and responsibility. If you need assistance with an estate account, you may need to hire a lawyer for advice. Your attorney can provide you with guidelines on how estate accounts work, and can inform you of your duties with regards to the account. Also, if there is a dispute over the estate account, a lawyer may be needed for representation during the court hearings.
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Last Modified: 11-04-2013 04:55 PM PST
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