Wednesday, September 19, 2012

What Are Estate of Checking Accounts

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An "estate of checking account" is simply a basic checking account that is opened when a person dies, and is a key part of the probate process.  Probate, the process by which the deceased's assets are transferred to the heirs (determined either by will or if none, state statute) and final bills are paid.  To accomplish this, the personal representative (what Hollywood calls the Executor) needs to open  the "estate of checking".

In Wisconsin, a domiciliary letter from the court appointing the PR is needed as well as a tax ID number. One can obtain that on their own, via an attorney, or sometimes as a service of the banking hosting the account.  A practice tip I offer, have the estate checking account at a bank where you do not bank, or is you do, make sure the checks are extremely different than yours.  Too often I have seen PR's confuse the checkbooks and write a check from the wrong account.

Typical deposits include:

  • balance of deceased's checking, savings, money market, accounts that did not have a beneficiary form;
  • proceeds from the sale of a home, car, personal belongings;
  • refund checks associated with canceled insurance policies, subscriptions, etc.; and
  • income tax refunds.
The estate of checking is also used to bay bills:
  • filing fees with the court;
  • attorney fees;
  • final bills to credit card, taxes, phone, utilities, etc.; and
  • write checks distributing the assets to the heirs.
The goal is to have all money in and all money out equal zero when the probate is closed.  And that is a general overview of an estate checking account.  It is essential that you speak with an attorney, licensed in the state where the deceased lived, to make sure you are following all state requirements -- do not rely on a blog as it is not legal advice.  Thanks for reading!

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