Open an estate bank account
In order to manage the finances of an Estate during the legal Probate process, a temporary bank account needs to be opened, known as the Estate Account.
This account should be opened in the name of the estate of the deceased, and by law, can only be managed by the Executor or Administrator.
This gives them the ability to manage any needed financial transactions without having to use a personal account.
Bank policy will determine exactly how to name an estate bank account, but in general, will appear as "Estate of Jane A. Doe" and may identify the executor of the estate as well.
The Estate bank account will be used for the following types of transactions:
- Pay final Debts
- Collect wages, Assets, and other payments
- Distribute remaining assets to Heirs, Surviving Family members, or Beneficiaries
- Pay ongoing expenses of the estate
Read More
For more information about bills to continue paying or cancel before probate, see the "Pay or cancel ongoing expenses" Task in the Guide.
Important
Before opening an estate bank account, the executor will need to obtain an Estate Tax Identification Number (EIN) from the IRS. This is necessary because the estate is not a taxable person, and thus a Social Security Number cannot be used.
Once the account is open, the executor or administrator should transfer all liquid assets from the deceased’s checking and savings accounts to the estate account.
Also, the executor can order checks to streamline the payment of estate bills and debts.
If they prefer to use checks instead of online banking, the checks should be titled in the name of the deceased’s estate (e.g. Estate of Jane Doe).
After the probate process is complete, all debts have been paid, and all assets have been distributed to the deceased’s heirs, the estate account can be closed.
Read More
To learn more about obtaining an estate tax identification number, see the “Obtain an IRS Tax ID number for the estate section of the Guide.
Read More To learn how to close an estate account, see the more about obtaining an estate tax identification number, see the “Close the Estate Bank Account section of the Guide.
Helpful Tips
Types of expenses that need to be paid while settling the estate
- Mortgage
- Car payments
- Insurance payments
- Home utilities
- Real estate and property taxes
- Credit card payments
- Income taxes
Bills that should continue being paid
- Co-signed loans (the co-signer should start paying them immediately)
- Bills with a joint account holder (the surviving account holder should start paying them immediately)
- All bills and debts shared with a surviving spouse, such as a shared phone bill (the spouse is now responsible for those debts)
- Utility bills (to prevent shut-off and damage to the home)
- Mortgage
- Real estate and/or property taxes on the deceased’s property
- Home insurance
- Car payments and insurance
How do you pay administrative expenses?
The executor or administrator should pay administrative expenses out of the estate bank account.
Whether the payments are made via online banking, check, or debit card, the executor or administrator should keep a record of payments made (including to whom, when, for what amount, and what the expense was for).
Copies of the estate bank account statements are usually sufficient to record which payments were made. They should be kept in a file with other important estate administration documents, such as letters of administration, court-related paperwork, and inventories.
The estate's bills and debt are also to be paid in a specific order, as determined by the laws of the state where the deceased lived.
Read More
To learn more about the payment priority order, see the “Review Payment Priority Order” Task of the Guide.
The order of payments is particularly important for an “insolvent” estate, because some bills must be paid before others and lower priority bills might not get paid at all.
Read More
To learn more about “insolvent” estates, review the “determine solvency” Task of the Guide.
Important
Even if the estate has enough money and assets to pay all of its bills and debt, it is beneficial for the executor or administrator to pay bills in the order outlined by state law.
This could prevent or reduce the risk of conflict and disputes arising among beneficiaries, heirs, and creditors of the estate and demonstrates that the executor is performing their duties in accordance with state law.
Providers to Contact
Probate Attorneys Near You
Probate attorneys help settle a deceased person’s estate. They can help you open an estate bank account and ensure the financial aspects of probate are in order.
Certified Public Accountants Near You
An accountant is a professional who specializes in financial record keeping and reporting. They can help you open an estate bank account, keep track of finances, and ensure that all financial paperwork is in order.
