How to open an estate account easily in 2025

When managing a loved one’s estate, it can be challenging to know where to start. If you’ve already begun the probate process, assuming a will is in place, the next important step is opening an estate account. But what exactly is an estate account, and how do you open one?

An estate account is a temporary bank account used to hold an estate’s assets and funds. It helps manage estate expenses, pay taxes, and distribute assets to beneficiaries efficiently.

Having an estate account allows you not to commingle your personal assets and those of the estate.

An estate account is typically opened by the personal representative or executor of the estate, once they have been appointed. But, there are some additional steps required to open an estate account, as the process is not automatic.

Opening an estate account is a crucial step for executors or personal representatives once they’ve been appointed. But the process isn’t automatic. To ensure smooth approval, you’ll need to gather the following key documents:

1. Find a local bank - Choosing the same financial institution that the decedent used is the best option when it comes to choosing where to open the estate account. Keep in mind that opening an estate account outside of the decedent’s state of residence could incur additional charges.

2. Confirm the Bank’s Requirements - In addition to the basic documents, each bank may have specific requirements for opening an estate account. You should ask the following questions (and others) to ensure you’re prepared:

• Do you require an original copy of the will?
• Do I need to come to your location to open an account or can I complete it online/over the phone?
• Do you require a notarized copy of the death certificate?
• How much do you charge to open an estate account?

3. Open the account - Once you have your EIN and all the required documents in place, take the final step and open your estate account. While you do have the option to choose a checking or a savings account, opening a simple checking account is a more prudent choice. This avoids unnecessary fees when transferring assets, especially if the savings account lacks checking privileges.

4. Start transferring - Once the account is opened, you can begin transferring any estate assets owned by the deceased into the new estate account. However, certain assets are not part of the estate because they transfer directly to beneficiaries or co-owners. Here are some examples of assets that bypass the estate account:

• Life insurance policies with designated beneficiaries
• Any Joint accounts that have a right of survivorship
• Property owned jointly or transferred outside of the will (such as with the use of a ladybird deed)

Once you have transferred all the applicable assets, remember to close any of the decedent’s bank accounts once they are empty.

The best bank to open an estate account is usually the decedent’s existing financial institution. This simplifies the process since the bank already has relevant account information, making it easier to verify the decedent’s assets and reduce administrative delays.

Also, if the decedent had any investment accounts (IRAs, for example) many banks have brokerage services that allow you to easily access these accounts as well.

Many banks also offer specialized estate account services, including dedicated support for executors and personal representatives. While we don’t endorse specific banks, here are some institutions known for providing comprehensive estate account information:

Schwab One Estate Account

Fidelity Estate Account

Bank of America Estate Services

USAA Survivor Relations

In cases where the decedent held a joint account with a spouse or another individual, the account typically transfers to the remaining account holder. So, do you still need to open an estate account if you already have access to the joint account?

The answer is yes, opening a separate estate account is often the better choice. Here’s why:

Simplifies Fund Management

Often individuals have multiple accounts for many different purposes, especially if they owned a business or were self-employed. An estate account consolidates all funds in one place, making it easier to track, manage, and distribute assets efficiently.

Reduces Legal and Financial Risks

1. If the joint owner passes away before the estate is distributed questions can arise about who legally owns the remaining funds. Does the joint holder’s estate receive those funds, as they were listed on the account, or does the decedent receive them? While these questions can be answered by an attorney or an estate professional, that means more fees for the estate.
2. If the joint account holder is not the executor or administrator, it can create trust issues within the estate. From the bank’s perspective, the joint account holder legally owns all the funds (even if they’re technically held in trust for the estate). However, this doesn’t prevent the possibility of misusing the funds. Yes, the executor can pursue the joint holder for not using the funds according to the estate’s plan, but that takes more money and more time. Noticing a pattern?

Prevents Mixing Personal and Estate Funds

The executor has a fiduciary duty to keep personal finances separate from estate assets. When the executor is the remaining joint holder of an account that also has their own personal funds, the chance of them comingling the estate funds and their personal funds increases. Choosing to open an estate account separate from your personal accounts is arguably a safer solution.

Streamlines Financial Record-Keeping

An estate account makes it easier to track transactions, especially when managing multiple income sources like property sales, dividends, and investments. Clean, organized records simplify reporting during probate and reduce the risk of accounting errors.

Centralizes Fund Deposits for Convenience

Somewhat related to our first point, instead of juggling multiple accounts, an estate account acts as a central hub for all incoming funds. This simplifies the process of managing proceeds from investments, property sales, and other income streams.

Ready for less money-induced headaches?

If having fewer worries about the estate’s funds sounds appealing, we’re on the same page. Our estate accountants and probate professionals are experienced in all matters related to estate administration and the like. Let us help you get the estate affairs in order - contact us today, starting with a no obligation free consultation.