Where to Open an Estate Account and What You’ll Need

An estate account is a temporary bank or brokerage account established in the name of a deceased person’s estate. Its primary purpose is to manage the financial affairs of the individual who passed away, serving as a centralized hub for assets and liabilities. The account helps prevent the commingling of personal funds with estate assets, facilitating organized record-keeping during the administration process. Funds within this account are used to pay outstanding debts, taxes, and expenses of the estate before the remaining assets are distributed to beneficiaries. This type of account is typically opened by the executor named in a will or an administrator appointed by a probate court.

Institutions Offering Estate Accounts

Financial institutions offer estate accounts to manage a deceased individual’s financial affairs. Commercial banks are a common choice due to their widespread accessibility and familiarity. Most national and local banks provide estate checking, savings, and sometimes money market accounts, which are suitable for holding cash, paying expenses, and receiving deposits such as life insurance proceeds or proceeds from asset sales.

Credit unions also offer similar services for estate accounts, often with a community-focused approach that may appeal to some individuals. They provide similar account types, allowing for consolidation and management of an estate’s liquid assets.

For estates that include investment assets like stocks, bonds, or mutual funds, brokerage firms become a necessary consideration. These firms are equipped to manage and liquidate investment portfolios, and they can also hold cash balances within an estate account. Some large financial institutions, such as Bank of America and Charles Schwab, offer specialized estate services that combine banking and brokerage capabilities.

Online-only banks and digital financial platforms represent another option for opening estate accounts. While they offer convenience and potentially lower fees, their processes for handling estate accounts might differ from brick-and-mortar institutions. It is advisable to confirm their specific requirements and support for estate administration before proceeding with an online-only option.

Essential Information and Documents for Opening

A certified copy of the death certificate is a foundational requirement, serving as official proof of the individual’s passing. Financial institutions universally require this document.

Letters Testamentary or Letters of Administration are also required. These court-issued documents grant the executor or administrator legal authority to act on behalf of the estate. Letters Testamentary are issued when the deceased had a valid will and named an executor, while Letters of Administration are issued by the probate court when there is no will and an administrator is appointed. Obtaining these letters involves initiating the probate process in the appropriate court jurisdiction.

An Employer Identification Number (EIN) for the estate is also required, functioning as the estate’s tax identification number, similar to a Social Security number for an individual. The IRS issues this number, which is necessary for tax reporting purposes for any income generated by the estate and for opening bank accounts in the estate’s name. The EIN can be obtained free of charge by applying to the IRS, typically using Form SS-4, “Application for Employer Identification Number.” When applying for an EIN, the application will request information such as the deceased’s legal name and Social Security number, the executor’s Social Security number and mailing address, and the date of death.

Personal identification for the executor or administrator opening the account is also consistently requested. A valid government-issued photo ID, such as a driver’s license or passport, is used for identity verification. Additionally, some institutions may request the deceased’s Social Security number and last known address for verification and record-keeping purposes. While not a physical document, the financial institution will inquire about the initial amount to be deposited into the estate account and the source of these funds, such as proceeds from a life insurance policy or existing bank accounts of the deceased.

Opening Your Estate Account

The executor or administrator will select a financial institution based on the types discussed previously, considering factors such as convenience, services offered, and prior relationships the deceased may have had with a particular bank. It is advisable to contact the chosen institution in advance, ideally to schedule an appointment with a branch manager or a specialist who is knowledgeable about estate accounts.

This proactive step can help confirm any specific requirements the institution may have and ensure a smoother process. During the appointment, the prepared documents, including the certified death certificate, Letters Testamentary or Letters of Administration, and the estate’s EIN, will be presented.

The financial institution will verify the identity of the executor or administrator using their personal government-issued identification. Following document verification, the executor will review and sign the institution’s specific account opening forms.

An initial deposit of funds into the newly opened estate account is typically required. These funds may come from various sources, such as existing bank accounts of the deceased, life insurance payouts, or other liquidated assets.

Upon successful account opening, the executor will receive the account number, and often checks, debit cards, and access to online banking services, facilitating the management of the estate’s finances.