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Home >> Special Situations >> Deceased Individuals
Bank Takes Funds of Deceased without Probate
My husband passed away in February, and had a checking account in his name only for $12,000. He left many unpaid debts, including a loan and credit card at the bank totaling $7,000. The bank took the $7,000 out of his account to pay the debts, then told me I would have to have his estate probated to get the remaining funds. When I did so, the Register of Wills stated the bank had no right to deduct any funds out of the account of a deceased without permission. A representative for the estate has been named and creditors are being notified via publication in paper. Can a financial institution legally take money out of a deceased's account without notification to the representative of the estate? How can I get the bank to return the funds, other than filing a small claims suit, or filing a lawsuit in court against the bank to make them return the $7,000 to the account and to file a claim along with the other creditors?
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 The ball is in the estate representative's court, since the estate's funds were offset to pay the bank's loan accounts. If that transaction was not permitted, the estate representative has the obligation to decide whether to pursue the matter with the bank. If other creditors have a claim that the bank's actions illegally preempted, the estate representative may have no choice but to force the issue with the bank. That could require court action, and hold up the final settlement of the estate. The estate representative should discuss this problem with legal counsel.
Published on BankingQuestions.com 5/14/09
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