Did you know that when someone passes away, their bank accounts are frozen? As part of the process, the mortuary notifies Social Security, which then informs financial institutions of the death. Accounts held solely in the deceased person’s name are frozen for 40 days to prevent fraud. While smaller accounts can be transferred using a Small Estate Affidavit, larger accounts must go through probate.
A frozen bank account can create serious problems. Without access to funds, families may struggle to pay bills or even cover funeral expenses. Joint bank accounts, however, are not frozen. The funds remain accessible, but joint accounts come with their own complications. For example, the money in a joint account automatically goes to the surviving joint owner. If you have more than one child, this can lead to disputes that may strain family relationships.
By contrast, if your accounts are in a Living Trust, they are not frozen. Instead, the Trustee can use the funds to pay bills and distribute the remaining balance according to your wishes. This ensures your estate is divided equally—or however you prefer—without unnecessary delays or conflicts.
If you want to avoid the hassle of frozen accounts and ensure your finances are handled smoothly after your passing, give me a call.
