When someone dies, can another person deposit funds into the deceased person’s bank account? Or can an individual continue to pay bills from that account as an Attorney-in-Fact pursuant to a General Durable Power of Attorney? These questions frequently generate confusion among friends and family members after the death of a loved one.
To provide a fictitious example, Tom Smith was a single man residing in the state of Washington. He had a checking account at ABC Bank. His two brothers, Joe Smith and Andrew Smith, were listed as beneficiaries of the account pursuant to ABC Bank’s beneficiary designation form that Tom completed when he opened the account. Tom had also executed a General Durable Power of Attorney appointing Joe as his Attorney-in-Fact for financial matters. Tom unexpectedly died in an automobile accident. After Tom’s death, Joe and Andrew went to Tom’s house and began reviewing financial documents on Tom’s desk. They found some checks that Tom had received and also some bills that needed to be paid. Andrew wanted to be helpful, so he went to ABC Bank and deposited the checks into Tom’s checking account. Joe, also seeking to help, found Tom’s checkbook and began writing checks to pay Tom’s bills, signing his name at the bottom of the checks as “Attorney-in-Fact” pursuant to Tom’s General Durable Power of Attorney.
Although Joe and Andrew thought they were doing the right thing, they both acted outside the scope of their legal authority. First, when Joe deposited the checks he did not inform ABC Bank that Tom had passed away. Once Tom died, his checking account at ABC must be closed. No further activity should have occurred on the account other than actions needed to distribute the account’s proceeds to Joe and Andrew as the account’s listed beneficiaries. ABC Bank may have accepted the deposit without knowing that Tom was deceased. However, once the bank became aware that a deposit was made subsequent to Tom’s date of death the bank likely took steps to reverse that financial transaction. Second, when Joe paid bills from Tom’s checking account at ABC Bank, again, this account should have been closed at time of Tom’s death. Further, Joe’s authority as Tom’s Attorney-in-Fact terminated upon Tom’s death pursuant to RCW 11.125.100(1)(a).
Joe and Andrew, instead of making deposits and paying bills out of Tom’s account, should have determined whether or not Tom had a will. Then, they should have contacted an estate attorney to seek legal advice regarding the next steps. In all likelihood, the checks could appropriately be deposited into an estate account once Tom’s probate had been initiated and a Personal Representative appointed by the court. Joe and Andrew could have also informed the estate attorney about Tom’s outstanding bills and received instructions depending on the nature of the obligation.
If you need assistance in figuring out the next steps if a friend or family members passes away, please let us know. We’d be happy to help.
Phone: (206) 784-5305
