Being named as an executor of someone’s will or being appointed as an administrator to settle the estate of someone who died involves a lot of work. Estate administration involves more than simply dividing up the decedent’s assets and distributing them to the heirs under the state’s intestacy laws or according to the provisions of a will. Instead, estate administration also involves paying the decedent’s creditors, probate court costs, taxes, and other expenses before the asset distribution can occur. To facilitate these tasks, administrators and executors typically open probate bank accounts.
What is a probate bank account?
A probate bank account is an account in the name of an estate. Since estates are their own entities, additional steps must be taken to open probate accounts than regular bank accounts. Probate bank accounts are important because they provide a way for executors and administrators to avoid commingling funds from the estate with their own. Executors and administrators are allowed to spend funds from the estate to pay estate expenses, but they should avoid depositing estate funds into their personal accounts. Paying expenses from the estate account provides documentation of where the estate’s money goes and helps to prevent potential legal challenges.
How to open a probate account
If your friend or family member named you as an executor in their will, or your close family member passed away without a will, you might be tasked with probate and estate administration to settle their affairs. This will involve numerous tasks over several months. Before you can open a probate bank account, you will first need to obtain copies of the deceased person’s death certificate. Once you have those, you will then need to open a probate case by filing a petition with the court. This will allow you to obtain letters of administration or letters testamentary to show that you have the authority to act on behalf of the estate. The next step is to apply for an employer identification number for the estate through the Internal Revenue Service . After that, you can take the documents to a bank to open an account.
Opening a probate bank account and using it to settle the affairs of the decedent is only one part of the probate process. There are many other tasks involved with administering an estate. It can take up to a year or longer, depending on the complexity of the estate.