The executor of a will is responsible for managing the financial affairs of the estate. To do this job properly, the probate court grants the executor the power to perform any financially related action that the decedent could have done with his own property including closing a bank account.
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Financial Responsibilities of an Executor
The executor's duties include paying the estate's bills, managing any investments, rental properties or other assets, and eventually distributing the remaining assets to the person or persons named in the will. To do this work, the executor may handle the estate's bank accounts and other assets as necessary to adequately perform these duties.
Handling Bank Accounts
An estate's bank accounts are often its primary source of liquid cash, which the executor may use to pay the estate's debts, according to the Gloucester County, New Jersey Probate Court. Using the estate's cash to pay its bills prevents the executor from having to sell other assets, like real estate, stock or vehicles to pay the bills. In order to make sure the bills are both properly addressed and paid, the executor may open a separate bank account for the estate. He may also move money from the decedent's accounts into the estate account. Finally, the executor may close both the decedent's bank accounts and the estate's account when they are no longer needed.
Some banks may charge a fee for the closing of an account. Fees are common on accounts with special terms regarding deposits and withdrawals. Additionally, a bank may charge overdraft fees if an account is overdrawn and may expect the decedent's estate to pay both the fees and the overdrawn amount before the bank will close the account. The executor of the estate may pay these fees and overdraft amounts from the estate's assets to close the bank account.
Generally, the executor has control of the estate's bank accounts. However, if the decedent and a person who is still alive jointly owned a bank account, the executor does not have the ability to close this account. Instead of becoming part of the estate, a joint bank account becomes the sole property of the living owner or owners when one of the owners dies. The living owner may go on using the account just as he did when the other owner was alive. The account does not become part of the decedent's estate and cannot be used to pay the estate's bills, unless the bills are also in the name of the living account owner.