You must inform the financial institution so they can freeze the deceased’s bank account - preventing unauthorised access. This ensures that the person accessing the account after their death is legally allowed to do so.
If the deceased left a will, the process is straightforward to deal with, as having a valid will can streamline the process. If there was no will in place at the time of death, you will need to apply to be the administrator of the estate.
In this guide, we discuss what happens to a bank account when someone dies without a will, outlining the steps a person dealing with the estate must take after a person dies. This includes the full process of closing the account down.
Summary of Bank Accounts and Probate
When someone dies, their bank accounts become a key part of the deceased’s estate that must be managed and distributed according to either their will or, if there is no will, the rules of intestacy. The personal representative - whether an executor named in a will or an administrator appointed by the court - takes on the responsibility of handling these accounts.
This often involves applying for probate or letters of administration to gain the legal authority needed to access and manage the deceased’s bank account and other assets. To help streamline the process, the Death Notification Service can be used to inform multiple banks and building societies of the person’s death in one step.
Additionally, the Tell Us Once service allows you to notify various government departments at the same time, making it easier to manage the necessary notifications when someone dies.
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Closing Down a Bank Account After a Death with No Will
Accessing the deceased person's bank account(s) is generally not allowed until you obtain a letters of administration (LOA). If the account balance is below the bank's threshold, you may be able to get funds without the relevant grant. Thresholds are the amount a bank sets before they require a letter of administration. This will depend on the relevant banking institution.
Even if you held power of attorney in their life, this ends with their death. Therefore it cannot be used to access any financial accounts.
Here is the full process for closing a bank account without a will:
1. Source Bank Accounts
The first thing you will need to do is to get a list of the sole bank accounts that they held. You might already have a good idea of the accounts in question. Or you might find some bank statements on their property.
If you don’t know, you can use My Lost Account to source any accounts they may have had. Their services will be limited as you will not have the legal authority to access these accounts.
You can also check with the 4 major banking institutions, though this may not be relevant if they didn't hold accounts there.
The 4 are:
Barclays
HSBC
Lloyds
NatWest
2. Notify Banking Institutions of Death
Once a list of the bank accounts has been compiled, the next of kin or personal representative will need to notify the institutions. You can use the Death Notification Service, which notifies multiple financial institutions in one go. You will need to submit a death certificate at this stage. This will ease some of the emotional burden of contacting each one separately.
In rare circumstances, if the official death certificate is not yet available, an interim death certificate from the coroner may be required to proceed with the process.
Additionally, the Tell Us Once service allows you to notify various government departments at the same time. This includes notifying departments responsible for national insurance, council tax, and utility bills to ensure all relevant payments and records are updated.
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3. Bank Freezes Account
Once the banking institution has received the notification of death, they will freeze the accounts in question. This prevents you or anyone else from accessing the account or making withdrawals. This will stop any direct debits or standing orders being taken too.
Freezing the account also means that any future payments, such as pensions or dividends, will not be processed, and making payments from the account is no longer possible until the estate is settled.
If the amount held in the account is under the threshold, the bank will either release the funds to you or into an estate account.
4. Grant of Letters of Administration
The personal representative will need to get a LOA to access the estate's bank account and the money in the account. This will only apply to estates over the relevant probate/confirmation thresholds.
The thresholds in England, Scotland and Wales start at £5,000 and in Northern Ireland, it is £10,000. Each financial institution will set its thresholds so it is worth checking with the relevant one.
If it is under the threshold you will need to bring ID and the original copy death certificate with you.
The UK Government’s timeline suggests you will receive LOA within 4 weeks if applying online. The letters of administration are issued by the probate registry as a legal document granting authority to manage the estate.
Read more on what is probate
5. Provide a Copy of Funeral Costs
If the deceased did not pay for their funeral in advance, expenses will typically need to be covered using funds from their estate. After secured debts, such as mortgages, funeral costs take priority over other debts. Although in certain circumstances, some family members may cover the costs associated with the funeral. This will prevent the need to go into the deceased's account.
Banks have procedures in place to release funds such as providing them with a funeral invoice from the provider.
But they may only cover essential costs such as:
Funeral director's fees
Cost of the coffin
Burial or cremation
Other expenses, such as headstones or flowers, may need to be covered separately by the family. You won’t need LOA to do this, as the banking institution will be paying the funeral home directly.
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6. Submit Letters of Administration to Bank
Once you have received LOA, you’ll need to submit it to the bank to gain access to the funds.
Read more on How Long Does Probate Take in the UK
7. Access Given to Accounts
Once the bank knows that you are the administrator of the estate, you will then gain access to the account. It is recommended that you open a separate bank account to manage the estate funds, especially if there is more than one beneficiary.
This account will help streamline the distribution of assets. It also ensures that any outstanding debts owed by the deceased are properly managed and paid from the estate funds.
8. Distributing Any Financial Assets
Now that you have access to the accounts, you can distribute the deceased person’s estate. You must follow the rules of intestacy so that only those who are eligible can receive it.
The order of priority includes:
Spouse or Civil Partner
Children
Parents
Siblings
Read more on Intestacy Rules in England and Wales Explained
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What Happens to a Joint Bank Account After the Death of a Loved One?
When one joint account holder passes away, the surviving holder automatically inherits the funds. This happens through the right of survivorship, regardless of any wills or rules of intestacy. The account becomes solely theirs, no probate or LOA are required for this.
You may face some inheritance tax implications. This only applies to those who weren’t married or in a civil partnership with the other joint account holder.
Common Mistakes When Handling a Deceased’s Bank Account
Handling a deceased person’s bank account can be complex, and there are several common mistakes to avoid. One of the most frequent errors is failing to notify the bank promptly after the account holder’s death, which can result in unauthorised transactions or complications with closing the account.
Misunderstanding the rules for joint accounts can also cause confusion or disputes among beneficiaries, especially if it’s unclear who the surviving account holder is or how the funds should be distributed.
Executors should keep detailed records of all transactions, including direct debits and standing orders, to ensure that all regular payments are stopped or redirected as needed. It’s also important to consider potential tax liabilities, such as capital gains tax and income tax, which may arise during the administration period.
By staying organised and informed, the executor can help ensure that the deceased’s bank accounts are managed correctly and that the estate is distributed according to the law.
Find Will Writing Services
Ensuring your will leaves the funds within your bank account to the people you want it to, will help loved ones following your passing.
Here at Compare My Move, we can connect you with up to 6 professional will writers in your local area. Simply fill out our online form to be matched with companies and save on your will writing costs.
Each will writer we work with is a member of one of the following:
Solicitors Regulation Authority (SRA)
Council for Licensed Conveyancers (CLC)
Law Society of Scotland (LSS)
The Law Society of Northern Ireland (LSNI)
Chartered Institute of Legal Executives (CILEX)
The Institute of Chartered Accountants (ICAEW)
Institute of Professional Will Writers (IPW)
The Society of Will Writers (SWW)
This means they will provide you with professional advice and a reliable service. Each company has passed our strict verification process.
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FAQs
How Long to Close a Deceased's Bank Account?
It can take anywhere between 6-12 months to close a bank account in the UK. This is because the biggest factor is the probate process. Probate is required to close an account as you’ll need to prove you are legally authorised to do so.
What Happens to an ISA After Death?
Your spouse may have had an individual savings account (ISA). As the surviving spouse, you may be eligible for an ISA allowance called additional permitted subscription (APS). This allows you to inherit the value of their ISA and transfer that amount to your own ISA.
Despite the ISA losing its tax-free status upon death, providers may allow the account to continue earning interest until it is closed. You will have up to 3 years and 1 day to transfer the funds to your ISA.
If your spouse's account may have a better interest rate than yours, and the provider allows interest to be earned during this period. It might be best to leave the funds in the account until you are ready to make the transfer or until the deadline approaches.
What Happens to Premium Bonds After Death?
You can have a couple of options to deal with premium bonds after death. The first one is to just cash in on them and add them to the estate. Or, you can wait for 12 months and allow bonds to be eligible for cash prizes, increasing the amount the estate will receive.
You will still be able to cash in on them after the 12 months, it just won’t gain any extra cash prizes after this. Whichever option you and the other claimants choose, you will still need probate when the value is greater than £5,000.
What Happens to Pensions After Death?
When someone has passed away, you may be able to claim their private pension. You will need to contact the provider to work out the amount you receive and learn about their specific claiming process, as it can vary by company.
As for state pension, you can claim any owed payments, but all future payments will be stopped. If you know they had a pension but cannot find any trace of it, you can use the UK Government Pensions Tracing Service.
