Various things can happen to your bank account after death in Florida, depending on how it’s held. Knowing these outcomes can allow you to set up your estate in ways that make the inheritance of it as simple-as-possible; sparring your loved ones from the stress of probate.
In brief, here’s what happens to your bank account after death in Florida:
- The bank account will go to the named beneficiary of the account or of your will.
- If you don’t have either of these things, then the account’s funds will be distributed per state law.
- Probate or no probate will be determined by whether you have transfer-on-death beneficiaries or a joint-owned account.
Read below to see which category your back account fits into:
How Do Banks Know That Someone Has Died?
Banks need to be notified of death; they won’t work it out alone. Once notified, they can then close the account to prevent fraud and distribute the money correctly.
Usually, a family member or a personal representative will inform the bank by bringing a copy of the death certificate, Social Security number and any other relevant documents provided by the court.
Another way a bank learns of death is via Social Security. Any post-death Social Security payments must be returned. Upon return of the check, social security will contact the bank which will allow them to learn of the death.
Different Outcomes for Bank Accounts After Death in Florida
Bank Accounts with Named Beneficiaries
If your bank account has named beneficiaries for ‘on-death’ transfers, then it will pass directly to those individuals upon your death. Ensure you name beneficiaries as payable-on-death (POD) or transfer-on-death (TOD) beneficiaries.
Setting up this will allow your loved ones to receive your account’s funds without waiting for the tiring and often complicated probate process to be complete. They will simply need to show a valid ID and a copy of your death certificate to the bank.
The beneficiaries will not have access to your money before you’ve passed away. You can also edit the listed beneficiaries at any time with your bank.
No Named Beneficiaries, And a Will
Bank accounts with no named beneficiaries will need to pass through Florida probate as per the will’s instructions by the personal representative.
Probate can be expensive and complicated, leaving it open to disputes and family upsets. Your will is also accessible to the public in Florida after your passing.
Florida does not have a ‘small estate’ law (which allows small estates to avoid probate). But it does have a ‘summary probate’, which is effectively a simpler version of probate for estates under $75,000 in value.
No Named Beneficiaries and No Will
If you have no will, then your bank account after death in Florida will pass to the named beneficiary.
However, if there is no named beneficiary then Florida intestate laws step in. A state-appointed executor will follow these rules to distribute the money. However, this means the deceased person’s had no input in their wealth distribution, which can often lead to distress and upset in the family.
Jointly Owned Accounts
So what happens to joint-owned bank accounts after death in Florida? If you own a joint account with someone else, then the surviving joint account holder will usually become the sole owner. No probate process should be required.
With Rights of Survivorship
If your bank account in Florida is jointly held with ‘rights of survivorship‘ (which is common), then it means the surviving owner will automatically become the sole owner after the other dies.
If you’re unsure of what type of joint account you have, then you can contact your bank or view the account registration document.
Bank Accounts Held in Trusts
A living trust can hold a bank account in its name, allowing your family to avoid probate after your death.
After you’ve passed away, the funds get transferred to the beneficiary named in the trust documents.
Transferring bank accounts to the trust can be done by informing your bank and filing some paperwork.
Please contact a Florida estate planning attorney before making decisions such as these, to ensure you follow state laws correctly and make decisions that are optimal for your family.
How to Make Your Bank Account Avoid Probate
To have your bank account shared without the need for probate, it will need to have payable-on-death or transfer-on-death beneficiaries or be in a trust.
If you have a simple estate with no other probate assets, your estate also may be able to avoid probate entirely. However, if you have a complex estate with multiple heirs, then probate is inevitable so you should consider using a trust.
What If My Bank Account’s Beneficiaries are Minors?
If the beneficiaries of your bank account in Florida are minor children, then they will not be able to access the funds until they reach the age of 18. In this case, someone must be appointed on the child’s behalf by the court to manage the funds on behalf of the minor. The individual selected will be responsible for investing and managing the funds in a way that is in line with Florida State.
If your account was joint-owned with your surviving spouse, then your spouse will become the sole owner until they pass away too. After your spouse’s death, the named beneficiaries will inherit the bank account’s money.
What Bank Account Inheritance Taxes Are There?
Florida does not have an inheritance tax. However, federal estate taxes exist regardless of state. But they have a high threshold of $12.92 million in 2023. Please contact our Florida estate planning attorneys if this applies to you, or if you have any questions regarding estate taxes.
Contact a Florida Estate Planning Attorney
If you want to ensure your loved ones can inherit your bank account and wealth without the stress of probate complications, then our Florida estate planning lawyers can help. We regularly assist people like you to allow a smooth transition of wealth, while retaining their wishes and financial freedom.
Free Consultations
Battaglia, Ross, Dicus & McQuaid, P.A. is U.S. News and World Reports Tier 1 law firm in Florida, specializing in Estate Planning & Probate since 1958. With award-winning experienced attorneys, they can help you avoid the long and complicated probate process.
Schedule a free consultation today to get started or to get any questions answered.
