If you or a loved one dies without a Will, the bank account — and indeed all the assets — require proactive and almost immediate attention.
Around 52 percent of Australians leave their mortal coil in this scenario, meaning they haven’t indicated how they wish their funds in the bank to be divided and allocated. Referred to as dying intestate, this legal term not only refers to the deceased failing to write a Last Will and Testament, but also applies when:
- A Will exists, but cannot be found.
- The deceased married after the Will was made.
- All the beneficiaries named in the Will are also deceased.
- A Will was written, but the Testator (Will writer) was not of sound mind.
Intestacy rules determine how the deceased’s estate — including the bank account — needs to be divided. However, the rules regarding intestacy vary from state to state in Australia. In NSW, the applicable laws include the Trustee Act 1925, Succession Act 2006, and the Probate and Administration Act 1898.
Generally speaking, bank investments and deposits are inherited by the departed’s next of kin — in most circumstances, the wife or husband. Should the deceased not have a spouse, or their partner has already passed on, the children are then entitled to an equal share.
Failing that, things can become somewhat complicated.
Not all families are what was once called traditional. Division of assets becomes more convoluted when there are children from different relationships, more than one spouse, surviving brothers and sisters and grandparents etc, etc. For more detailed information on the order of inheritance under intestacy, contact us.
Does the Bank Need To Be Notified of Death?
Yes, this is crucial.
Unless the bank is notified, direct debits and other automatic payments will continue to leave the account(s) — it is usually the responsibility of the Executor to inform the financial institution. However, with no Last Will and Testament, there won’t be one.
Anyone can notify the bank — although it’s usually the next of kin — that one of its account/investment holders has passed on. Most typically, the bank will request proof of identification of the informer and their relationship to the deceased before they note the death. Furthermore, they usually demand to see the Death Certificate to freeze the account — unless there are joint holders on the account.
Joint Bank Accounts and Death
In most circumstances, if a bank account is held in joint names — and one party dies — the entirety of its contents is allocated to the remaining account holder. Usually, this is as soon as the financial institution sees the Death Certificate.
Admittedly, the bank will probably need a little paperwork completed in order to have the account in a sole name. But, in most cases, the account isn’t frozen, and possession of existing funds and full control pass to the remaining joint holder — they do not become an element of the deceased estate pool.
What if There Is No Joint Account Holder?
When the deceased has left a Will, the Executor will allocate and divide the bank funds in accordance with the departed’s wishes.
However, with no Executor, there is no Probate — the legal process where a Last Will and Testament is recognised by the court as valid, and allows the Executor to distribute bank assets. Instead, an application to the Supreme Court of NSW for Letters of Administration must be made.
This needs to be done within six months from the date of passing. While the court may consider a request outside of this time, the applicant will need to prove exceptional circumstances prevented the application — and requires the filing of an Affidavit of Delay.
Only a person who is entitled to a share of the deceased’s estate may make the application — in most circumstances, this is the closest surviving relative. It is possible to make a joint application — or for the court to appoint the NSW Trustee & Guardian to be responsible for asset distribution.
Assuming there are no issues, errors, or problems in the application — the court will make a Grant of Administration.
Once approved, the newly appointed Administrator may then present the Grant of Administration to the bank. They will then release any funds and close the bank account — usually once any existing loan or credit card debts are satisfied. It is then the responsibility of the Administrator to allocate the cash in accordance with the rules of intestacy.
Avoiding Bank Account Complications After Death
If you pass on without writing a Will, it can create confusion and unnecessary hurdles for loved ones. As they mourn your sad departure, the last thing on their mind will be attending to your bank account.
Creating your Last Will and Testament ensures that your bank funds and assets are allocated in accordance with your wishes, prevents your family from necessary yet complicated legal procedures, and safeguards against challenges and contests.
Speak to Falzon Legal About Dying Without a Will
If a loved one has passed on without creating a Last Will and Testament — speak to us.
At Falzon Legal, we will provide support, guidance, and advice at this time of emotional heartbreak.
Ceaselessly professional, we will navigate you compassionately along the correct path, addressing:
- Notifying the banking institution.
- Applying for Letters of Administration.
- The Grant of Administration.
- Intestacy and Distribution of Assets.
Dying Without a Will FAQs
Is Withdrawing Money From Bank Account After Death OK?
If you can access the deceased’s bank accounts, you should not interact with their funds until you have notified the bank of their passing.
Should you be named as a joint account holder, you may then access the cash. If you are not named on the account, you cannot touch any investments or deposits without a Grant of Administration.
In many circumstances, however, a bank will release funds to cover funeral expenses — upon seeing a relevant invoice from the funeral director.
Who Gets Money if No Will?
If the deceased did not write a Last Will and Testament — or, if one was made but cannot be found or is considered invalid — the money left behind will be allocated through intestacy regulations.
These rules outline the order in which close family members are entitled to a share of the estate.
Is the Eldest Child Next of Kin?
Under the rules of intestacy in NSW, the next of kin of the deceased is the spouse, or de facto spouse.
Do Banks Require Probate to Release Funds?
Yes. If the deceased has left a Will, the bank will only release funds to the Executor after the Grant of Probate. If there is no Last Will and Testament, the financial institution will require a Grant of Administration.
What Happens if Someone Dies Without a Will in Australia?
Should a person pass on without leaving a Last Will and Testament, a Grant of Letters of Administration application needs to be made to the Supreme Court of NSW. This is usually made by the deceased’s next of kin.
Once granted, it permits the Administrator to distribute the estate — including funds held in bank accounts.
Read more about the hidden costs of dying without a will here.
How Long Do Banks Take to Release Money After Probate in Australia?
Generally speaking, once a financial institution has received the required documentation — including a Grant of Probate or Administration — it will release funds in two to three weeks.
Who Clears a House of Cash When Someone Dies?
If the deceased has left a Will, it is the responsibility of the Executor to retrieve and allocate the assets — including cash and bank funds — to the beneficiaries. This is only after the court has granted probate.
If there is no Last Will and Testament, the Administrator will attend to the cash and divide under the rules of intestacy — after the Grant of Administration.
— Falzon Legal