Closing Financial Accounts After a Death: A Step-by-Step Guide

What to do first

Start by making a list of every financial account the deceased held: bank accounts, investment accounts, credit cards, loans, insurance policies, and retirement accounts. You will need to contact each institution separately, and having the full picture before you start will save you from backtracking later.

Check the mail for statements. Look through their email for account notifications.

Request a copy of their credit report from annualcreditreport.com to identify accounts you may not know about. The three major credit bureaus (Experian, Equifax, and TransUnion) will each provide a report.

Before contacting anyone, gather these documents. You will need some combination of them for every institution:

• Certified death certificate (you will need one for almost every account)
• Your government-issued photo ID
• Letters Testamentary or Letters of Administration (these are court documents that officially name you as the executor or administrator of the estate, giving you legal authority to access accounts, pay debts, and distribute assets on its behalf; you get them by filing the will with the probate court)
• The deceased's account numbers (from statements, cards, or online logins)
• The will or trust document (if one exists)
• An EIN for the estate (if you need to open an estate bank account; get one free from irs.gov)

If you do not have Letters Testamentary yet, you can still notify institutions of the death. Most banks will freeze the account upon notification, which protects the funds while you work through the legal process.

For more on ordering death certificates, see our guide: How to Get Death Certificates.

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Bank accounts

How a bank account is handled depends on how it was set up. Joint accounts with rights of survivorship transfer automatically to the surviving owner. Accounts with a payable-on-death beneficiary go directly to that person. Sole accounts with no beneficiary go through probate, and the executor will need court-issued authority to access them.

Joint accounts with rights of survivorship

If the account was jointly owned with rights of survivorship, the surviving owner automatically becomes the sole owner. The bank will remove the deceased person's name from the account once you provide a certified death certificate. No probate is needed.

You can continue using the account normally. Autopay, direct deposits, and debit cards tied to the surviving owner still work.

Accounts with a payable-on-death (POD) beneficiary

If the deceased named a beneficiary on the account (sometimes called a POD or "in trust for" designation), the funds pass directly to that person outside of probate. The beneficiary needs to visit the bank with a certified death certificate and their photo ID to claim the money.

The bank may close the account and issue a check, or transfer the balance to the beneficiary's own account.

Sole accounts with no beneficiary

These accounts become part of the estate and will go through probate. The executor or administrator needs to present the death certificate and Letters Testamentary (or Letters of Administration) to the bank.

The bank will typically:

1. Freeze the account upon notification.
2. Require you to open a separate estate bank account to receive the funds.
3. Transfer the balance to the estate account once your legal authority is confirmed.

The estate account is used to pay debts, funeral expenses, taxes, and other obligations before distributing what remains to the heirs.

Some banks will release funds for funeral expenses before probate is complete, but this varies by institution. Ask.

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Investment and brokerage accounts

Investment accounts follow the same general ownership rules as bank accounts: accounts with a transfer-on-death designation or joint ownership bypass probate, while sole accounts go through it.

Brokerage firms typically require additional paperwork, including an affidavit of domicile and a stock power form, beyond what banks ask for.

Transfer-on-death (TOD) accounts

If the brokerage account had a TOD designation, the investments transfer directly to the named beneficiary without probate. The beneficiary contacts the brokerage firm and provides:

• A certified death certificate
• Their photo ID
• An affidavit of domicile (a sworn statement of where the deceased lived; the brokerage firm provides the form)

The brokerage will retitle the assets in the beneficiary's name, either in a new account at the same firm or by transferring them to the beneficiary's existing account elsewhere.

Accounts that go through probate

For sole accounts without a TOD designation, the executor needs to provide the brokerage firm with:

• A certified death certificate
• Letters Testamentary or Letters of Administration
• An affidavit of domicile
• A stock power form (provided by the firm; authorizes the transfer of securities)
• A state tax inheritance waiver, if your state requires one

The firm will typically freeze the account, then transfer the holdings to an estate account once the paperwork is approved.

Cost basis step-up

One important tax detail: when someone inherits investments in a taxable brokerage account, the cost basis of those investments resets to their market value on the date of death. This means any gains that accumulated during the original owner's lifetime are effectively erased for tax purposes.

For example, if the deceased bought stock for $10,000 and it was worth $50,000 when they died, the heir's cost basis becomes $50,000. If the heir later sells at $52,000, they owe capital gains tax only on the $2,000 gain, not the full $42,000.

This is called a step-up in basis and can save beneficiaries a significant amount in taxes.

Keep records of the date-of-death values.

Inherited retirement accounts (IRAs and 401(k)s)

Retirement accounts have their own rules:

• Spouse beneficiaries can roll an inherited IRA into their own IRA and treat it as theirs, or take distributions over their lifetime.
• Non-spouse beneficiaries who inherited after January 1, 2020 must withdraw the entire balance within 10 years of the original owner's death (the "10-year rule"). Starting in 2025, if the original owner had already started taking required minimum distributions, the beneficiary must also take annual distributions during those 10 years.
• Employer plans (401(k), 403(b)): Contact the plan administrator. Options vary by plan, but often mirror the IRA rules.

These rules have been a moving target. The IRS has revised its guidance on inherited retirement accounts multiple times since the SECURE Act passed in 2019, including delays and changes to the RMD requirements.

Consult a tax professional before making any distributions. The tax consequences vary based on the account type, your relationship to the deceased, and the original owner's age, and the rules may continue to change.

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Credit cards

Credit card debt is paid from the estate's assets during probate, not by surviving family members, unless they co-signed or jointly held the account.

Contact each credit card issuer to report the death. Ask for their "deceased account services" or "estate services" department. They will need a certified death certificate and the account number.

The issuer will close the account and stop any new charges. Before you call, review the most recent statements for recurring charges (subscriptions, autopay, insurance premiums) that need to be transferred or canceled.

Who pays the balance?

Credit card debt does not disappear when someone dies. It is paid from the estate's assets. The executor is responsible for paying legitimate debts from the estate before distributing anything to heirs.

If the estate does not have enough money to cover all debts, the credit card balance may go partially or fully unpaid. The credit card company absorbs the loss. Family members are not personally responsible for a deceased person's credit card debt, with three exceptions:

1. Joint account holders are fully liable for the balance. (This is different from authorized users, who are generally not liable.)
2. Co-signers are fully liable.
3. Surviving spouses in community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) may be responsible for debts incurred during the marriage.

Do not let a debt collector pressure you into paying a deceased person's debt with your own money. If you are unsure of your liability, consult an attorney.

Protecting against identity theft

After notifying credit card companies, contact the three credit bureaus to place a deceased alert on the credit report:

• Experian: 1-888-397-3742
• Equifax: 1-800-685-1111
• TransUnion: 1-800-916-8800

This prevents anyone from opening new accounts using the deceased person's identity.

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Mortgage and home loans

A mortgage does not have to be paid off immediately when the borrower dies. Federal law (the Garn-St. Germain Act) allows family members who inherit a home to assume the existing mortgage without the lender triggering a "due on sale" clause.

This means:

• A surviving spouse or heir can keep the house and continue making mortgage payments without refinancing.
• If multiple heirs inherit the property, they can decide together whether to keep it, sell it, or have one person buy out the others.
• If the deceased had mortgage protection insurance, the policy may pay off the remaining balance.

If no one wants to keep the property, the executor can sell it and use the proceeds to pay off the mortgage. Any remaining equity goes to the estate.

Continue making mortgage payments during the probate process. Falling behind can lead to foreclosure, even if probate is still in progress.

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Auto loans

If the deceased had an auto loan, the balance does not disappear. The lender holds a lien on the vehicle until the loan is paid in full.

The executor, co-signer, or heir who wants to keep the car will need to pay off or assume the remaining balance and transfer the title through the DMV.

• Co-signer exists. They are responsible for the remaining payments, regardless of who inherits the car.
• No co-signer. The executor can pay off the loan from the estate, sell the vehicle, or return it to the lender.
• Family member wants to keep the car. They will need to pay off the balance (or assume the loan, if the lender allows it) and transfer the title through the DMV.

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Student loans

Federal student loans are discharged (forgiven) when the borrower dies, with no tax consequences.

Private student loan policies vary by lender, and many do not offer automatic discharge, which means the balance may fall to a co-signer or the estate.

Federal student loans

Federal student loan discharge applies to Direct Loans, Perkins Loans, and FFEL loans. Parent PLUS loans are discharged if either the parent borrower or the student dies.

To discharge the loan, submit a certified death certificate to the loan servicer. There is no tax liability on the discharged amount (this has been the case since 2018).

Private student loans

Private student loans are handled differently. Some lenders will discharge the balance upon death, but many will not. If the loan is not discharged:

• The balance becomes a debt of the estate.
• If there is a co-signer, they become solely responsible for the balance.

Check the loan agreement or contact the lender to understand their policy.

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Insurance policies and pensions

Life insurance, pension survivor benefits, and Social Security survivor benefits each have their own claims process. Because these overlap with tax and benefits decisions, they are covered in detail in our survivor's guide to benefits and taxes, including how to find a lost life insurance policy, how to claim pension survivor benefits, and how to apply for Social Security.

What to handle here

• Auto and homeowner's insurance: Contact the insurer to update or cancel the policy. If the surviving spouse is also on the policy, they may be able to continue coverage. If the vehicle or home is being sold, keep the policy active until the sale closes.
• Health insurance: If the deceased was the primary policyholder and a spouse or dependents were covered, check whether they qualify for COBRA continuation coverage (up to 36 months for a qualifying event like death of the employee).

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Subscriptions and recurring charges

Review the deceased's bank and credit card statements from the last two months to identify recurring charges. Cancel or transfer each one to prevent ongoing charges to accounts that are being closed. Some services offer prorated refunds if you ask.

• Streaming services (Netflix, Spotify, etc.)
• Phone and internet plans
• Cloud storage and email (Google, Apple, etc.)
• Gym memberships
• Magazine and newspaper subscriptions
• Amazon Prime, Costco membership, and similar
• Automatic bill payments (utilities, insurance premiums)

If the deceased used a password manager, check it for additional subscriptions not visible on statements.

Before canceling any digital account, consider whether it holds irreplaceable content:

• A Google account may contain years of photos, emails, and documents.
• An Apple account may have purchased music, books, or apps.
• An Amazon account may have order history needed for warranty claims or returns.

Download or transfer anything worth keeping before you close the account.

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Opening an estate bank account

If you are the executor or administrator, you will likely need to open a separate bank account for the estate. This keeps estate funds separate from your personal finances and creates a clear paper trail for the probate court.

To open an estate account, you will need:

1. An EIN (Employer Identification Number) for the estate (free from irs.gov).
2. Letters Testamentary or Letters of Administration.
3. A certified death certificate.
4. Your photo ID as the executor or administrator.

Use this account to:

• Deposit funds from the deceased's accounts as they are closed
• Pay estate debts (funeral costs, credit cards, medical bills, taxes)
• Make distributions to beneficiaries once debts are settled

Keep detailed records of every transaction. The probate court may require a full accounting.

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Common mistakes to avoid

The most costly mistakes happen when people pay estate debts from personal funds, distribute assets before debts are settled, or skip the credit bureau notification. Avoiding these errors can save you from personal liability and fraud complications.

• Paying debts with your own money. Unless you co-signed or are in a community property state, the estate pays the estate's debts. If there is not enough money, some debts go unpaid. See the credit card section above for details on who is and is not liable.
• Distributing assets before debts are settled. Pay all known debts first. If you distribute too early and debts surface later, you may be personally liable as executor.
• Ignoring small accounts. Forgotten savings accounts, old 401(k)s from previous jobs, and unclaimed insurance policies can hold significant value. Do a thorough search.
• Skipping the credit bureau notification. Identity theft of deceased people is common. Place the deceased alert immediately.
• Not keeping records. Save every letter, form, confirmation number, and receipt. The probate court and the IRS will both want documentation.

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What you will need: a document checklist

Here is a summary of the key documents you will need across all the institutions covered in this guide. Gather as many as you can before you start making calls, and keep copies organized in a folder or binder.

Document	Where to get it	What it is for
Certified death certificates (10-12 copies)	Funeral home or state vital records office	Every institution requires one
Letters Testamentary / Letters of Administration	Probate court	Proves your authority to act for the estate
Your government-issued photo ID	—	Verifying your identity
The will or trust document	From the deceased's records	Guides distribution of assets
Estate EIN	irs.gov (free, online)	Opening the estate bank account
Affidavit of domicile	Provided by brokerage firms	Required for transferring investments
Credit report of the deceased	annualcreditreport.com	Identifying all accounts