What happens to a bank account when someone dies?

Sole accounts

If someone held a bank account in their name only, the bank will freeze the account as soon as they are notified of the death. From that point, no withdrawals can be made and no payments will be authorised, including direct debits and standing orders.

The account remains frozen until the executor of the estate contacts the bank with the relevant documents and either obtains a release of the funds or has them transferred to the estate account.

If the person who died had direct debits for household bills, contact those providers as soon as possible. Explain the circumstances and ask for payments to be paused or cancelled. Most providers handle this sensitively and will work with you.

Joint accounts

If the account was held jointly, the surviving account holder usually retains full access to the account and its funds without the need for probate. This is because of a legal principle called the right of survivorship, which means the account passes automatically to the surviving holder.

You will still need to notify the bank of the death. The bank will remove the deceased person's name from the account and issue replacement cards and account documents to the surviving holder. The process is straightforward in most cases.

Joint accounts pass by survivorship, but the funds may still count toward Inheritance Tax. If the estate is large, take advice from a solicitor or tax adviser before assuming joint assets are entirely outside the estate.

How to notify a bank

Contact the bank as soon as you are able to. Most major banks have a dedicated bereavement team. You can usually notify them by telephone, in branch, or by post.

What you will typically need to provide:

• The death certificate (a certified copy, not the original)
• Proof of your own identity
• The grant of probate or letters of administration, if the bank requires it
• Account details for the person who died, if you have them

Many banks have signed up to the Bereavement Charter, which sets out how they commit to treating bereaved customers. If you find a bank unhelpful or slow, you can ask to speak to the bereavement team directly, or raise a formal complaint.

When is probate required to release bank funds?

Each bank sets its own threshold below which it will release funds without a grant of probate. These thresholds vary and are not always published, but they typically range from £5,000 to £50,000 depending on the institution.

If the balance is below the bank's threshold, the bank may release the funds directly to the next of kin or executor on production of the death certificate and proof of identity, without requiring a grant.

If the balance is above the threshold, the bank will not release funds until it has seen the grant of probate or letters of administration. Contact each bank individually to find out their specific threshold and requirements.

If you need access to funds urgently -- for example, to pay for a funeral -- speak to the bank directly. Many banks will release money specifically to cover funeral costs before probate is granted, on sight of the death certificate and a funeral director's invoice.

Paying for the funeral from the deceased's account

Most banks will pay a funeral director directly from a frozen sole account if you present the death certificate and the funeral director's invoice. This is one of the few payments they will authorise before probate.

Contact the bank's bereavement team and explain that you need to cover funeral costs. They will advise on the process. Keep a record of every conversation, including the date, the name of the person you spoke to, and what was agreed.

What happens to money in the account after release

Once the bank releases the funds, the executor is responsible for using them correctly. The money becomes part of the estate and must be distributed according to the will, or the rules of intestacy if there is no will.

The executor should open a separate executor's account to hold estate funds during administration. This keeps estate money separate from the executor's personal finances and makes it easier to account for all transactions when the estate is wound up.

Debts must be paid before any money is distributed to beneficiaries. This includes funeral costs, outstanding bills, credit cards, and any other liabilities. If an executor distributes money to beneficiaries before all debts are paid and there are insufficient funds to cover those debts, the executor can be held personally liable for the shortfall.

Pensions and savings accounts

Workplace pensions and personal pensions are usually held outside of the estate and do not form part of the probate estate. They pass directly to a nominated beneficiary. If no beneficiary was nominated, the pension trustees decide who receives the funds at their discretion, typically taking account of any expression of wishes the person left.

ISAs are treated as part of the estate for probate purposes. However, a surviving spouse or civil partner can inherit an ISA allowance from their partner, which means they can invest the equivalent amount into their own ISA without it counting against their annual allowance. This is called an Additional Permitted Subscription (APS). Contact the ISA provider for details.

Premium Bonds can be held for up to 12 months after death and will continue to be entered into the prize draw during that time. After 12 months, NS&I will cash them in. The executor should contact NS&I with the death certificate to begin the process.

Further reading