There is a lot bureaucracy to deal with if your spouse or another person close to you passes, including dealing with their bank accounts. Will the account be frozen? Who is allowed to pay the bills? When can the heirs access the money? Whether the account can be accessed, and how, depends on many factors, including whether or not the deceased was the sole account holder or a joint account holder, and whether or not someone has power of attorney for the account.
If an account holder dies, neither the Nachlassgericht (probate court) nor the Einwohnermeldeamt (registration office) automatically inform the bank. That’s why it’s important that relatives, heirs or those holding power of attorney inform the bank that the account holder has passed. You will need to provide proof in the form of a death certificate.
Once a person has passed away, the rights and obligations associated with being an account holder are passed on to the heirs (this is known in Germany as Gesamtrechtsnachfolge, or universal succession). However, the bank first has to check who has the right to inherit the money. You will need to provide proof of an inheritance to the bank. Until that proof is provided, relatives and heirs cannot simply access the account or make any payments from it. The account will be held by the bank as a Nachlasskonto (estate account).
Sole account holder: the account will generally be held by the bank as an estate account.
If the deceased was the sole account holder and the bank has been informed of their death, they will usually block any access to online banking portals and bank cards. However, this does not mean that the account is completely frozen. Instead, it is run as a Nachlasskonto (estate account).
The bank will continue to carry out all orders that were made while the account holder was still alive. This might include direct debits, as well as standing orders for rent, electricity or insurance policies. These payments will not be stopped until they are cancelled by those with the right to do so (heirs or someone with a power of attorney).
Can you pay for funeral costs using the deceased’s account?
Funeral costs can be paid by the estate, so you can use any money in the deceased’s account to pay for them. To do this, you have to present the invoice from the funeral home to the bank. The bank may request additional documentation, such as proof of status of the heirs (i.e., the order in which they inherit) or an existing power of attorney for the account. Whether or not they will pay the invoice before receiving this documentation will differ in each individual case.
Rules on bank power of attorney
If you have bank power of attorney for the deceased’s account, you will be able to continue to carry out banking transactions even after they have passed. The power of attorney remains in place even after their death, automatically becoming power of attorney on behalf of the heirs. Of course, the actions you can take are limited to what is covered by the power of attorney, usually bank transfers, withdrawals, paying bills or selling any securities that belonged to the deceased. The power of attorney will not cover taking out loans in the name of the deceased or their heirs, but it will apply to closing the account now that the account holder has died.
Any banking done using the power of attorney can, of course, have positive or negative effects for the heirs. Heirs do have the right to revoke any power of attorney granted, without giving a reason for doing so. Anyone holding a power of attorney that has been revoked by an heir should inform the bank in writing of the revocation as soon as possible. If only one heir revokes the power of attorney, it will remain in effect on behalf of the other heirs. However, the person holding the power of attorney may then only use it in agreement with the heir that revoked it. The right to represent any other heirs that have not revoked the power of attorney remains unaffected.
Joint account: what changes when one account holder dies?
If you have a joint account with the deceased, and if that account was an ‘either to sign’ account, then you can continue to access the bank account for anything that does not require two account holders. In principle, you can continue to bank as usual. The death of one account holder will not lead to the account being frozen. However, the heirs of the deceased will now take on their legal status and be treated as joint owners. The heirs now exercise the rights of the deceased.
But remember, any (joint) heir can revoke the authority to draw singly on an account at any time. At that point, if one account holder wishes to use the account, then the heir who has revoked this authority must also agree to it. If all heirs revoke the authority to draw singly on an account, an ‘either to sign’ account becomes a ‘all to sign’ account. That means that you, the account holder, may only access the account in agreement with all heirs.
Who inherits the money in an account?
If the deceased was the sole account holder, the money becomes part of the estate. The heirs assume the rights and obligations associated with the account. If there is more than one heir, they can only access the money together. A person granted power of attorney by the deceased has no right to the money. They can use their power of attorney to access the account, but they must act on behalf of the heirs.
In the case of a joint account, the heirs take on the position of the deceased account holder. The surviving account holder does not, therefore, automatically receive all the money in the account. The amount that belongs to the estate is based on the legal relationship between account holders.
What to do after someone has died
- Inform the account servicing institutions of the death.
- Provide a death certificate as official proof of the death. You can request death certificates from the relevant Standesamt (registry office).
- Check to see whether there is a power of attorney in place.
- Create a list of direct debits and standing orders.
- The heirs must provide proof to the institution that they have a right to access the account. Depending on the individual case, this may be provided in the form of an Erbschein (certificate of inheritance) or a notarised will.
Consider granting a postmortem power of attorney while you are still alive
If you want to make sure that your loved ones can access your accounts before they are able to provide proof of inheritance to a bank, consider granting power of attorney in the event of death (post-mortem power of attorney). This provides for the estate and the heirs. The power of attorney comes into effect once the bank has received official proof that the person granting the power of attorney has died. The person granted the power of attorney is then able to represent the heirs. This power of attorney can, of course, also be revoked by the heirs.
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Kathleen Altmann
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