“Death ends a life, not a relationship.” – Mitch Albom.
Death does not put an end to the relationships. That’s why people mourn the death of their loved ones’ years. But one fact that everyone must remember is that death is unavoidable and life is unpredictable. And the truth about death is that it affects one’s family – both financially and emotionally.
Banks will not necessarily know that a customer has died. It is better on our part to assume that they don’t know. Therefore, it is important to notify the bank as soon as possible. Anyone can notify the bank but typically this responsibility would fall on the next of kin or the estate representatives. Usually the bank may ask for identification from the person notifying the bank as well as a copy of the death certificate. As soon as the bank is notified of the death of a customer, the bank will freeze deceased customer’s individual accounts. This includes transactional accounts, term deposits, credit cards and loans.
Banks can take instructions about a deceased person’s accounts only from a person who is authorized to act on behalf of the deceased’s estate. Similarly, the bank can give information about the accounts only to those who are entitled to request for it. The reason is that the bank’s duty of confidentiality of their customer’s information / data does not end with their death. Thus it implies that the next of kin and estate beneficiaries cannot give instructions to the bank or require a bank to give them information about a deceased person’s bank account.
It takes patience, time and undivided attention to follow it up with the bank regarding the bank details of the deceased. Please allow us to list the challenges and associated suggested solutions for some of the immediate bank dealings that need to be attended:
Procedure for settlement of a deceased account – nomination registered
When Nomination is registered with the bank, the nominee can apply to the Bank, giving full details of the accounts of the deceased depositor. On receipt of the claim from the nominee, the branch will verify the photocopy with the original Death Certificate, and the nominee particulars. Signatures of two witnesses of good standing and integrity and are acceptable to bank should also be provided with application. The witness can be any of the following:
- Magistrate or Judicial official or
- Any Officer of the Central / State Government or
- Any Officer of the Bank.
- Any two persons acceptable to the Bank.
Procedure for settlement of a deceased account – nominee is a minor
If the nominee is minor, the person appointed by the deceased account holder to act on behalf of the minor until he/she attains majority has to submit an application to the bank, giving full details of the accounts of the deceased depositor.
Procedure for settlement, if the deceased customer’s Account has Survivorship Clause? (Either or Survivor, Former or Survivor, Later or Survivor and Any one or Survivor etc.)
- If the depositor dies, then the survivors can make a simple application along with a photo copy of the Death Certificate for record of the Bank.
- For deposits, the survivors can continue with the account by deleting the deceased depositor’s name from the Fixed Deposits.
- For Current Account/ Savings Bank Account, the survivors must transfer the balance to a new account in their own name and bank asks for a fresh account opening form.
- If the survivors want to close the accounts, they can do so. In case of term deposits, on request from the legal heir(s)/representative(s)/nominees, the deposit can be split into two or more receipts individually in the name of legal heir(s)/representative(s)/nominees. It shall not be construed as premature withdrawal of the term deposit. The interest shall be paid at the rate applicable for the period actually run.
Procedure for settlement of a deceased account – joint deposit without survivorship clause
When a joint account holder dies, in the absence of a clause like Either or Survivor, Former or Survivor, Later or Survivor and Any one or Survivor etc., the balance can be paid jointly to the survivors and the legal heirs of the deceased. Example: If an account in the joint name of A and B, and if A dies, the balance will not be paid to B alone. It has to be paid to B and to the legal heirs of A jointly.
Procedure for settlement of a deceased account – No Survivorship or Nomination
In a deceased account has no Survivorship clause nor Nomination, the bank delivers the assets only to the legal heirs. The bank can also settle the accounts without production of legal representation on the basis of Indemnity – cum – Affidavit. This is applicable when:
- The customer has died INTESTATE i.e. without a WILL and
- There are no disputes among the legal heirs and all the legal heirs join in indemnifying the Bank and there is no reasonable doubt about the genuineness of the claimant(s) being the only legal heirs.
A legal representation is one that is granted by a Court of Law entitling the legal heirs of the deceased to collect the debts/securities or assets of the deceased. The following documents represent different forms of legal representation:
- Succession Certificate
- Wills and Probate
- Letter of Administration
- Order of the Administrative General attached to the High Court
The deceased person could have had Housing Loan or Pension or Car Loan or Education Loan or Personal Loan or Loan against shares / debentures or festival loan – we are here to help the family.
These are some banking issues that are listed above. The grieving family can contact Last Rites in confidence to ensure smooth transition of all banking transactions even after the demise of a loved one. Our qualified and trained employees are always available to assist.