You pay bills. You support your family. You save when you can. Little by little, that money builds up in your bank account. But what happens to it when you are no longer here?
If you have money sitting in your bank account, you may have wondered about this at some point.
Now, I want you to think of this.
A family member dies unexpectedly. Everyone knows the person had money in the bank. They even know the name of the bank. So, they walk into the bank, expecting to collect the money.
But can they? That’s another question.
It may not be as simple as you expect. The process can depend on the circumstances, the applicable law, and the bank’s requirements.
Truth be told, this is where many people get confused. Being related to someone does not automatically give you the right to withdraw money from their bank account after death.
So, what really happens to a bank account when someone dies in Nigeria?
Stay glued to this article to the end because we are going to answer these questions and explain what you can do to make things easier for your family.
What Happens to a Bank Account After Death?
Death is inevitable. So, when a bank customer dies, the money in the account does not simply become available to the family. The money forms part of the deceased person’s estate. Someone with the proper legal authority must deal with that estate before the bank can release the funds.
That may involve the following:
1.A valid Will
2.An executor
3.Probate
4.Letters of Administration
5.A death certificate
6.Other documents required by the bank
The exact process can depend on the person’s circumstances and the applicable law.
In simple terms, the bank needs to know that the person asking for the money has the legal authority to act for the deceased’s estate.
Can a Next of Kin Withdraw Money From a Deceased Person’s Account?
This is probably one of the biggest questions people ask. Being someone’s next of kin is important. But does it automatically mean you can withdraw money from their bank account after death?
Let’s say your father lists you as his next of kin.
Does that mean you can walk into his bank after his death and withdraw everything?
No. Not simply because you are his next of kin.
Being a next of kin and having legal authority to administer an estate are not necessarily the same thing.
The CBN’s guidelines also recognise next of kin, legal representatives and beneficial owners in relation to claims on eligible unclaimed balances. However, the required evidence of entitlement still matters. So, don’t jump to conclusions. Being the next of kin does not simply mean you can collect the money.
What If Someone Dies Without a Will?
Now, this is where things can become more complicated. When someone dies without a valid Will, they are said to have died intestate.
The estate then has to be administered according to the applicable law.
In Lagos State, for example, the Probate Registry describes Letters of Administration as the legal authority given to administrators to deal with an estate where the deceased died intestate.
●If there is a valid Will, the deceased has already stated how they want their assets handled. The executors named in the Will can then apply for Probate so they can legally administer the estate.
●If there is no Will, the appropriate people may need to apply for Letters of Administration to administer the estate.
No matter any option you choose, just know that the bank will not simply hand over the money because someone says, “I’m the deceased’s brother,” “I’m the wife,” or “I’m the first son.”
What Happens to Money Nobody Claims?
Now, imagine nobody comes forward for the money you saved for years before death took you away. The money can remain unclaimed.
Under the CBN’s current guidelines, certain balances that remain dormant for the required period can become eligible for transfer to the Unclaimed Balances Trust Fund. The CBN holds these funds in trust for their beneficial owners.
And this is the good part. Unclaimed does not necessarily mean lost forever. The CBN provides a search service where account holders or beneficiaries can check for unclaimed balances and then contact their financial institution to begin the reclaim process.
How Can You Make Things Easier for Your Family?
Nobody likes talking about death.
But avoiding the conversation does not make it go away. A little planning today can save your family from trying to figure everything out while they are grieving.
Below are five (5) steps that can save your loved ones unnecessary stress later.
1.Make a Will
Clearly state how you want your assets handled. A valid Will can help guide the administration of your estate and reduce uncertainty about your wishes.
2.Keep Important Financial Information Organised
Don’t hide important financial information and documents where nobody can find them.
Your family should know where to find the relevant documents when necessary. This can save them unnecessary trips to the bank and the stress of searching for important information.
3.Review Your Arrangements From Time to Time
Life changes. Marriage, divorce, children and other major events may affect your plans. So, review your arrangements when necessary.
4.Don’t Assume Your Next of Kin Automatically Owns Your Money
Having your son, daughter or someone you love as your next of kin does not automatically make that person the owner of your money after your death. Make sure you understand what your bank and the law require.
5.Get Professional Advice When Necessary
No one knows it all. Estate matters can become complicated, especially when several assets or family members are involved. When necessary, seek advice from a qualified professional.
Frequently Asked Questions (FAQs)
Q1: Who receives the money in my bank account if I die?
A1: The money becomes part of your estate. It does not automatically go to your next of kin. The appropriate person must follow the legal process for administering your estate.
Q2: How long does it take for a bank to release funds after death?
A2: There is no fixed timeframe. It depends on the estate, the required legal documents and the bank’s procedures.
Q3: How long do bank accounts stay open after death?
A3: The account does not simply disappear after death. The bank may keep it subject to its procedures while the deceased person’s estate is being administered.
Q4: Can I withdraw money from a deceased person’s bank account?
Not simply because you are a family member or next of kin. You generally need the appropriate legal authority and documents before the bank can release the funds.
Conclusion
We spend so much time learning how to make money. We learn how to save it. We learn how to invest it. But very few people stop to ask what happens to that money when they are gone.
Now you know that it is not as simple as walking into a bank and saying, “This was my father’s money.”
If something happened to you today, would your family know where your money is and what they need to do to claim it? Maybe that’s a conversation worth having before you need it.
