This will depend primarily on whether the account was jointly held or held in the name of one person only.  If it was a joint account, it will continue to operate as normal after the death of one account holder, with the second account holder able to continue carrying out transactions as usual.  All funds in the joint account will automatically transfer to the second account holder once the financial institution has been advised the first person is deceased.  The account will not be frozen and will operate as normal.

However, if an account is in one name only, what happens to it after death will depend on whether the deceased person has left a will or not.

What happens to your bank account if you die leaving a will?

When a bank or financial institution is made aware their customer has died, the account will immediately be frozen to protect the funds until the rightful owner or beneficiary has been established.  If the account holder has previously provided the bank with details of their beneficiary, that person can immediately claim the funds in the account once they prove their identity as the new legal owner of those funds.

If a person dies leaving a will and specifically mentions bank accounts and names the beneficiary of these accounts, the will’s executor can simply inform the bank of the account’s legal owner.  The bank will release the account’s funds once the beneficiary has supplied documents to prove their identity.

What happens to your bank account if you die leaving no will?

If you die intestate (meaning ‘leaving no will’), your bank account will be frozen to protect the assets in the account.  However, from there, things get a bit more complicated.  If there isn’t any will, the Australian state in which the person lived will appoint an executor of the deceased person’s estate.  It is the executor’s job to determine who the rightful beneficiaries are and to find those persons.

If a relative wishes to act as executor of a deceased person’s estate, they can apply to the Supreme Court in their state to be ‘granted representation’, which means they have the right to administer the estate.  They will then be issued a ‘Letter of Administration’ which gives them the right to act as executor and determine who the legal beneficiaries of the estate are.  Banks will need to see a copy of the Letter of Administration before agreeing to release the account funds.

What documents will a bank need to prove that a person is deceased?

A bank or financial institution will usually need to see a copy of the Death Certificate and you’ll need to complete a form called a ‘notice of the death of a customer’.  To complete this form, you’ll need the deceased person’s full name, address, date of birth and account number details (if you have them).  A bank will probably also need to see a copy of the will, Letter of Administration or proof of probate before releasing funds to an executor.

To simplify the process of informing people about a loved one’s death, you can contact the Australian Death Notification Service (ADNS).  This is a national database supported by all states and territories in Australia which aims to simplify the death notification process.  If you register the deceased person’s details with this online service, you can nominate which other organisations and government departments will be notified about your loved one’s death.