Death in the family is always a surprise in its way, and even if we were prepared for it, there is always something we did not count on. For example, bank accounts, loans, investments, mutual funds, shares, and other securities. What to do with them, and how do you get to them?
Deceased Account Holder
Even in sad moments, it’s good to understand financial matters and know what to do first. If an active worker dies, the bank will also learn about it through social insurance. However, we do not have to rely on it; it is necessary to go to the financial institution in person immediately. If a person of higher retirement age dies, we will visit a bank with a valid and confirmed death certificate and report it. Based on this, the bank will take the necessary steps. After such notification to the bank employee, the information will be transferred to the headquarters, and all necessary steps will start.
First Steps
First, the bank will close the current account, blocking all incoming and outgoing payments. At that time, it is only possible to handle the funds in the account once the final inheritance proceedings have been completed. Unfortunately, some individuals are trying to withdraw money from their accounts before announcing their death to a banking institution. Suppose we withdraw money this way or send it from the deceased’s bank account after death. In that case, it is considered theft or unauthorized handling of someone else’s property. After the client’s death, even a contingent administrator can no longer manage the account. Their rights are also automatically revoked. Subsequently, payment cards to the account and access to internet banking will be blocked. However, if it is a joint bank account and the death concerns only one of the account holders, the bank will block only half of the money and only cancel standing orders placed by the deceased.
What if the deceased had a loan?
As for the mortgage loan (in some instances, it has “its own life”), of course, provided that the deceased was not alone, and the co-debtor is also registered there, it is not subject to inheritance and does not apply to survivors. The loan must continue to be repaid. Therefore, it is helpful to know where such loan documents are stored at home, search for the loan account number and continue to pay installments or go to the bank again and consult how to proceed precisely in repayment. Otherwise, sanctions would unnecessarily increase.
It is practical to be informed about whether the loan is insured in the event of death and to contact the relevant insurance company. After receiving all necessary documents on the client’s death, the insurance company will pay the relevant insurance amount to the entitled person. Having a designated authorized person in the insurance policy is very practical. The entitled person can repay the rest of the debt if there are sufficient funds in the insurance from the risk of death, which is the better case. However, if the insurance policy does not specify an authorized person, the insurance company is also waiting for inheritance proceedings, and the financial amount from the concluded insurance policy is divided between all heirs.
If the deceased was on a mortgage loan alone without a co-debtor, the outstanding amount of the loan is transferred to the inheritance proceedings. From the date of death until the decision on the inheritance is issued, the interest on the amount due ceases, and at the moment when the inheritance proceedings are completed, the bank calls on the heirs to pay the debt. Then, it is possible to agree with the bank whether the rest of the loan will be repaid in regular installments or as a one-off payment.
There is still the possibility that the survivors will not want to take over the debt from the deceased person, which is very rare because there is a property in the game, and it is a pity to lose it. If the survivors decide not to take over the debt, the bank will officially take over the mortgage loan and the pledged property under its management after receiving the inheritance decision. Subsequently, the bank decides to sell it so that the money from the loan granted is returned.
it is better to be prepared than surprised – no matter how difficult it is
However, a mortgage loan may not be the only debt in the bank. Practical bankers know how often spouses do not know each other, for example, about their consumer loans, loans from non-bank institutions, and the like. Upon notification of death, all documents after the deceased must be appropriately reviewed, and, as in the case of a mortgage, the debt will also be registered by the bank for inheritance proceedings.
Personal Investments
It is certainly much more pleasant to find out that the deceased had loans and investments, which means finances in black numbers.
It is both a banking product and a checking account that are subject to similar rules. After the owner’s death, there is nothing to do but wait for the official proceedings. On the date of death, the bank suspends all interest, meaning everything goes into inheritance proceedings from that date. After submitting the final inheritance decision result, the bank will pay everything that results from the decision to the specific heirs.
If, in the case of the client, there are both debts and accounts that are in plus, the heirs must decide whether to take over the complete inheritance with both debts and plus items in the accounts or give it up. You can’t just choose what works best for you. If the heirs decide not to assume the debt, they waive the inheritance fully, without reservation or any conditions.
For many, of course, this can be not only a significant surprise but also a disappointment.
Testate Succession
Perhaps the deceased left a will. Therefore, it is good to know where it is stored.
Whether in the notarial central register of wills or another place. The Chamber of Notaries of the Slovak Republic keeps the Notary Central Register of Wills. Among other things, it contains a register of undeclared wills or other acts in the event of death and a list of declared wills or other acts in the event of death drawn up in the form of a notarial deed or which the notary has accepted for notarial custody. The registrar is not public.
At the request, the Chamber shall notify the court or notary, who has been entrusted with the inheritance proceedings as a court commissioner, whether it registers the testator’s will and with whom it is deposited. Thus, a will has its own unique status in the case of an inheritance and is equally important for both the bank and the heirs.
As in other areas of everyday life, it is better to be prepared than surprised – no matter how difficult it is.
What happens in the bank after the announcement of death?
- The bank account is immediately blocked for both incoming and outgoing payments.
- Persons who could dispose of the account during the deceased’s life will be immediately blocked from using the account
- All information services of the deceased are immediately deactivated – e-mail and SMS notifications
- In the case of joint accounts, after the death of one of the owners, the standing orders given by the deceased are canceled
- The interest on credit products will stop
- The bank will register the unpaid part of the loans for inheritance proceedings
- It is not possible to pay out funds or cancel accounts during the inheritance procedure
- Credit and debit cards will be blocked and canceled
Text: Mirka Grochalová, photo: stock.adobe.com, pexels.com
