How Death Changes the Decedent’s Assets

Upon death, any assets owned by only by the decedent are frozen, or inaccessible, until an executor of his or her estate is named. Exceptions can be made if an estate is in urgent need of funds before an executor is appointed. Some assets pass directly to the surviving owner without being frozen if they were specifically designated, during the decedent’s life, to do so.

Frozen assets are completely inaccessible even to the future executor of the estate and anyone who had power of attorney during the decedent’s lifetime. No one can access, sell, transfer, or manage these assets. They are only unfrozen once an estate executor is appointed.

A few types of property — usually assets which are jointly owned — do pass immediately to the surviving owner upon the other owner’s death, including:

  • Anything held in joint names with right of survivorship: these are assets which automatically pass to the survivor or survivors on the first person’s death.

  • Anything owned as tenants by the entireties: This is a form of joint ownership of real estate where rights of survivorship are only available to husband and wife.

  • Assets, typically bank accounts, designated payable on death (POD).

All assets owned by the decedent alone have to go through the probate process, either according to the decedent’s will or the laws of intestacy which apply if he or she left no will. Bank accounts are treated no differently. Money in accounts that belonged only to the decedent isn’t available to the family or the executor until the executor has been appointed.

Bank accounts may be transferred into an account in the estate’s name only after the appointment of an executor. You may open traditional bank checking and/or savings accounts for an estate, or you may opt to use fiduciary services available from commercial banks, investment houses, or in some states, law firm trust departments.

Sometimes an estate has an urgent need for funds before an executor is named, usually to pay for funeral arrangements. In these cases, you can request appointment as temporary executor or special administrator from the probate court.

Powers of attorney, the power to act on the grantor’s behalf regarding any or all of his or her assets or financial matters, may only be used while the grantor of the power is alive. When the decedent dies, so does the power of attorney. Any separate powers of attorney that the decedent may have executed regarding bank accounts also lose their effectiveness with the decedent’s death.

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