When a loved one passes away with cash inside their accounts, what happens to these funds next depends on how the accounts were held. If the individual owned that account in their own name and failed to designate a payable on death beneficiary, then the account most likely needs to go through the probate process.
Certain state laws enable smaller estates, however, to go through streamlined probate. In those cases, an inheritor would be able to use either simplified probate procedures or an affidavit to claim the money inside the account. It’s always a good idea to safeguard these funds by transferring it to the estate bank account that will need to be opened by the executor.
If the account had a payable on death beneficiary, the executor does not have any authority over these funds since it will automatically transfer to the beneficiary named by the deceased person. With jointly owned accounts, in most cases the surviving co-owner automatically becomes the owner of the entire account, meaning that these funds and the total account do not have to go through the probate process in order to be transferred to the survivor.
There can be exceptions to this rule, however, because not all accounts are held in the names of two people and also carry the right of survivorship. You’ll want to look at the specifics of each individual bank account to determine what to do with it as part of your estate planning.
If you’re appointing your own executor of your California estate and want to make an inventory of all the things you own, including bank accounts that might have cash assets in them, this can make the process of estate administration easier.
Reach out to our Pasadena estate planning lawyers when you need guidance on next steps.