What Is the Punishment for Taking Money from A Deceased Account?

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What Is the Punishment for Taking Money from A Deceased Account?

Our article discusses What the Punishment for Taking Money from A Deceased Account Is and how you can access and withdraw funds left in bank accounts after someone has died. As well as the circumstances which enable you to do so.

 

What Happens to A Person’s Bank Account in The Event of Their Death?

The representative should inform the appropriate banks and building societies of the death. For their assets to go through properly, there are legal processes to follow when someone dies.

Unless a valid Will appears, the executors appointed in the Will usually be responsible for this task. An administrator should be able to perform this task under the Intestacy rules if there is no Will.

Any relevant banks will freeze an executor’s accounts until a Grant of Probate approves the grant. You will need to submit your death certificate to submit your application.

Notifying any relevant financial institutions as soon as possible after a family member passes away is crucial. Failing to do so, or continuing to make withdrawals and payments on their bank card, is illegal.

 

Joint Accounts: What Happens to Them?

In the event of someone’s death, only joint bank accounts will remain unfrozen. When one spouse dies, the other can access all the money in their shared joint account. This money would not be frozen if one spouse were to die. Ownership of joint accounts and any money in them revert to the other spouse.

 

What Will Happen to A Deceased Person’s Account If They die Without a Will?

Bank accounts pass to beneficiaries when someone dies without a will. But they become more complicated when there is no will or beneficiary named.

Executors generally manage the deceased’s assets, including bank accounts. Without a will, the state appoints a suitable executor based on local law. Following local inheritance laws, the executor pays any estate creditors and distributes the funds.

The money most likely goes to the deceased’s spouse and children in most states.

 

The Legal Power of Attorney

In some cases, you might have accessed the deceased person’s bank account during their lifetime if you had worked as their attorney. The grantor’s Power of Attorney expires when they die.

 

The Legal Power of Attorney.

 

An executor

To notify the bank of the person’s passing, the executor must follow the process set forth by the bank. Typically, a death certificate is required, and certain forms may need your help.

You can arrange to pay funeral expenses or inheritance tax from the deceased’s bank account with the bank. While it is impossible to withdraw money from the account as usual, it is possible with the bank.

 

Money Withdrawal from A Bank Account That Has Been Closed

Knowing the account owner is already dead, a person who takes money from a deceased bank account is breaking the law and may face criminal charges for theft or fraud.

Generally, banks freeze accounts of deceased persons for security reasons and don’t allow third parties to access accounts until proof of a court’s letter of testamentary or estate administration by the person seeking access.

There are, however, instances when payments deduct from the certain bank account automatically, such as:

  • Utilities,
  • Subscriptions,
  • Or mortgages.

As long as the bank account owner hasn’t proved that they are dead, debiting the account is not a fraud.

Families and individuals with access to a deceased person’s bank account can perpetrate theft or fraud by using and withdrawing funds, knowing that the account owner is dead, even after the person dies.

Upon death, if the account was solely owned by the deceased without a payable-on-death designation. Executors or administrators must apply for a court order before accessing the account. In this case, the account funds should pay off creditors and distribute the proceeds to the beneficiaries.

There is no restriction on using the deceased’s bank account for money. And the executor has the chance of:

  • Discharging by the court,
  • Replaced by someone else,
  • Required to return the money,
  • And stripped of their commissions.

Theft of an estate can also result in criminal penalties, but most cases of estate theft do not escalate.

 

Penalties in civil courts

 

Turnover.

There is a procedure known as Discovery and Turnover through which beneficiaries of a deceased person’s estate can demand the executor return property he has wrongfully transferred.

 

Discharge of executor.

A Surrogate’s Court judge can discharge the executor or administrator who takes money from a deceased person’s bank account, removing their authority to manage the estate.

When the executor wastes or improperly uses the estate’s assets, the judge may discharge and remove him. Without a misbehaving executor, the court can appoint another executor. Usually, the beneficiary who brought the removal proceeding.

 

Attorneys’ fees.

The executor can use estate funds to defend the estate. If the court finds that the executor took funds from the estate improperly, the court can order that the executor reimburse the estate for the lawyers’ fees incurred by the estate. It may even be necessary for the executor to pay the attorneys’ fees of the beneficiaries in some rare cases.

 

Waiver of commission.

It is common for executors to receive a commission as a reward for their work. The commission is about three percent of an estate’s value. The court can remove an executor’s commission if they withdraw money from a deceased bank account.

 

Penalties for crimes

We can prosecute it for theft from a deceased person’s bank account, even if that person is a beneficiary of the deceased person’s estate, for improperly withdrawing money from the bank account.

The allegations of theft from the beneficiaries could be unfounded if you take more than you are legally entitled to. Each story has multiple sides, so allegations that beneficiaries are stealing are likely unfounded. A District Attorney can, however, impose severe penalties if charges are brought.

 

The alleged thief’s side of the story.

Many claims they are paying for estate expenses, taking legal fees, or stealing funds by mistake. But some say they are paying for estate expenses or taking their share as a beneficiary.

Unless an executor enters a plea agreement with the District Attorney’s office, the court decides whether they have a valid reason to transfer estate property to themselves or are just trying to cover their tracks.

 

The Penal Law.

A person may be committing robbery when they withdraw funds from a bank account that belongs to a deceased person.

The California Penal Law defines theft as obtaining, taking, or withholding property from a person to deprive them of it or to appropriate the property to themselves or a third party.

According to California Penal Code, it is when someone steals, takes, or keeps property belonging to another person, with the intent described under subdivision one. The California Penal Code also defines common law robbery and common law theft by trick, embezzlement, or fraudulently obtaining property.

 

Sentencing guidelines.

According to California Penal Law 155, an executor can plead guilty to up to twenty-five years in prison for stealing money from a deceased bank account. The sentence depends on the amount the executor stole.

 

Restitution.

We can force an executor to return the property to the estate and pay compensation to beneficiaries by the court.

 

How Do You Access the Money of a Deceased Person?

Some banks will allow executors or administrators to access the account. And if the funds in a deceased person’s account are less than a certain threshold.

In most cases, however, obtaining money from an estate is only possible through probate. Which involves administering the estate and obtaining a grant of probate.

A solicitor can provide probate advice to executors and administrators to help them navigate the process, depending on whether a valid Will exists.

Exercising the estate of a deceased person requires that the executor or administrator take a Grant of Probate once it becomes available. A Will will then allow them to withdraw any funds and distribute them following the instructions in the Will. If the Will is not in place, the money will go according to the Intestacy Laws.

 

How Do Banks Know When Someone Dies?

Banks need to inform account holders to close accounts and distribute funds promptly after the death of an account holder.

 

Friend or relative

In most cases, a bank discovers the death of an account holder by the family notice.

Upon the death of an account holder, notify the bank by bringing a copy of their Social Security number, death certificate, and any other information the court provides, including letters testamentary to the executor.

 

Assuring social security

Social Security Administration checks are not issued after a recipient’s death, as funeral directors notify the agency on behalf of the family.

However, Social Security payments sometimes arrive after someone’s death. Which requires the bank to contact Social Security to return the check. Getting the request from Social Security is another way for the bank to determine if the account holder has passed away.

 

FAQS

 

After death, who has access to a deceased person’s account?

Personal representatives are responsible for caring for the deceased’s estate (money, property, possessions) and closing bank accounts. An executor is somebody named in a will responsible for managing a deceased person’s estate.

 

How can you locate the account number of a deceased individual?

The PR should check the deceased’s documents to see any bank statements. The move towards online banking means there are fewer bank statements to be found today due to the move towards online banking. In addition, if the deceased did not keep a detailed record, this may not be easy.

PRs should conduct a financial assets search if they do not know what assets the deceased held. Numerous companies can help with this process.

 

Can you withdraw money from the bank account of a deceased individual?

The law states that if you hold power of attorney for someone while they are alive, taking money from their bank account is illegal after they die. When someone dies, the power of attorney terminates.

Whenever someone dies, the bank will be able to freeze the account. The companies paying from the account – for example, utility bills – need to be informed of why the payments have stopped if there are any direct debits or standing orders.

Despite requiring probate, you can use funds from the account to pay funeral expenses and inheritance tax (IHT) before probate takes effect:

  • Paying for the funeral requires a copy of the funeral invoice, which the bank will send directly to the undertaker.
  • Most banks pay IHT and building societies using HMRC’s Direct Payment Scheme, including National Savings & Investments (NS&I).

 

What happens to a pension when someone dies?

As soon as you register the death, the registrar should tell you about the Tell Us Once service if the deceased received a state pension. You can do so with the Tell Us Once service. Upon receiving the information, the Department of Work and Pensions will determine if the estate has a right to benefits or refunds.

Contact the provider to determine what steps to take if the deceased had a personal or workplace pension.

It depends on the type of pension the deceased held, whether it provided benefits to financial dependents or the estate. If the deceased has completed a nomination form, they may be able to specify where the funds will go. In some circumstances, the surviving spouse or civil partner may continue to receive a reduced pension.

Hedy Ghavidel

HEDY GHAVIDEL Managing Attorney  Roseville Office  1-866-471-6981  info@attorneysre.com Bio...

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