What an estate account is and why you need one
An estate account is a bank or financial account opened in the name of the estate itself, not in the deceased person's name. It exists to hold money that belongs to the estate while it is being settled — money from selling property, life insurance payouts, tax refunds, or other assets that come in after death.
You need a separate estate account because the deceased's personal bank accounts are frozen once the bank learns of the death. Money that arrives after that point — a final paycheck, a refund, an insurance payout — cannot go into the frozen account. The estate account gives you a legal place to receive, hold, and eventually distribute that money to heirs and creditors.
The person who opens the estate account is usually the executor (the person named in the will to handle the estate) or, if there is no will, the person appointed by the court as administrator. You will need court paperwork proving your authority to act on behalf of the estate.
Key Takeaways
- An estate account is opened in the estate's name, not the deceased person's name, and requires court paperwork showing you have authority to manage the estate.
- Most banks require either an original or certified copy of the death certificate and a court document like letters testamentary or letters of administration before they will open an estate account.
- You will need a federal employer identification number (EIN) for the estate, which you can obtain from the IRS for free before or after opening the account.
- The estate account is separate from any probate process and exists to receive money that arrives after the person's death, such as final paychecks, insurance payouts, and tax refunds.
- Different banks have different requirements and timelines, so calling ahead to ask what documents they need can save you a trip.
Getting the documents the bank will require
Banks will not open an estate account without proof that you have legal authority to act. The two documents you will need are a death certificate and court paperwork showing your appointment as executor or administrator.
For the death certificate, order an original or certified copy from the vital records office in the county where the death occurred. Most banks will accept either, though some prefer certified copies. You will likely need multiple copies — one for the bank, one for the IRS, one for insurance companies — so order at least three or four. The cost varies by state but is usually between $15 and $30 per copy.
For the court paperwork, you need a document that proves the court has appointed you to manage the estate. If there is a will, this is called letters testamentary. If there is no will, it is called letters of administration. If the estate is very small and your state allows it, you may have a small estate affidavit instead. Ask the probate court clerk in the county where the deceased lived which document applies to your situation. You can usually get certified copies from the court for a small fee, or download them from the court's website if they are already issued.
Obtaining an EIN for the estate
An EIN (employer identification number) is a nine-digit number the IRS issues to identify the estate for tax purposes. The bank will ask for this when you open the account, and you will need it to file the estate's tax return and to report income to beneficiaries.
You can obtain an EIN for free from the IRS. The fastest way is to apply online at irs.gov using Form SS-4. You will receive the number immediately after you submit the form. You can also call the IRS at 1-800-829-4933 and apply over the phone, or mail a paper Form SS-4 to the address listed on the form (this takes about four weeks).
When you apply, you will need to provide the estate's name (usually "Estate of [Deceased Person's Name]"), the date of death, and your name and Social Security number as the person applying on behalf of the estate. You do not need to have the bank account open yet — you can obtain the EIN before or after opening the account.
Opening the account at a bank
Call the bank where you want to open the account and ask which branch handles estate accounts and what documents they need. Some banks have a specific process for this; others handle it at any branch. Having this conversation before you go in person will save you time.
When you go to open the account, bring the original or certified death certificate, the court paperwork (letters testamentary, letters of administration, or small estate affidavit), and your EIN. Bring a photo ID as well. The bank will make copies of the documents and keep them on file.
The account should be opened in the name of the estate — for example, "Estate of John Smith" — not in your name as executor. This makes clear to anyone looking at the account that the money belongs to the estate, not to you personally. The bank will issue you a debit card or checkbook in the estate's name, and you can use these to pay estate expenses and eventually distribute money to heirs.
Most banks can open the account the same day if you have all the documents. Some may take a few business days to verify the paperwork. Ask the bank for a timeline when you arrive.
What money goes into the estate account
The estate account receives money that arrives after the person's death and belongs to the estate as a whole. This includes final paychecks, tax refunds (both the deceased person's final return and any refund owed to the estate), life insurance payouts made to the estate, proceeds from selling property, and money returned by creditors or government agencies.
Money that goes directly to a named beneficiary — such as a life insurance policy with a named beneficiary, a payable-on-death bank account, or a retirement account with a named beneficiary — does not go into the estate account. Those assets pass directly to the beneficiary and bypass the estate entirely.
As executor or administrator, you will direct people and organizations to send money to the estate account. When you notify the deceased person's employer of the death, ask them to send any final paycheck to the estate account. When you file the final tax return, the IRS will send any refund to the account. Insurance companies will ask where to send the payout; you will provide the account number.
Keeping records and managing the account
Keep detailed records of every deposit and withdrawal from the estate account. Save bank statements, receipts for expenses you pay from the account, and documentation of any distributions you make to heirs. You will need these records if the estate is audited by the IRS or if any heir questions how you managed the money.
Do not mix your personal money with the estate's money. Do not use the estate account to pay your personal bills, and do not deposit your personal income into it. The account exists only for estate business. If you are owed money for expenses you paid out of pocket (such as funeral costs or court fees), you can reimburse yourself from the account, but keep receipts showing what you paid for.
Some banks charge a monthly fee for estate accounts; others do not. Ask about fees when you open the account. If the estate is small, the fees may outweigh the benefit of having a separate account — in that case, ask the bank or probate court clerk whether a simpler method is available in your state.
Closing the account when the estate is settled
Once you have paid all debts, taxes, and expenses and distributed the remaining money to the heirs, you can close the estate account. Bring the bank a letter from the probate court saying the estate has been closed, or a letter from you as executor stating that all distributions have been made. The bank will close the account and issue a final statement.
Keep the final statement and all other estate account records for at least three years in case the IRS has questions about the estate's income or your handling of the money. Some states require you to keep records longer, so check your state's rules.
Frequently Asked Questions
Can I open an estate account before the will goes through probate?
No. You need court paperwork proving your appointment as executor or administrator, and that paperwork does not exist until the probate court issues it. The timeline varies by state and by how busy the court is, but it usually takes two to eight weeks from the time you file the will with the court to the time you receive letters testamentary.
What if the bank refuses to open an estate account?
Some smaller banks or credit unions may not have experience with estate accounts. If your bank refuses, try a different bank, or ask the probate court clerk which banks in your area regularly handle estate accounts. You can also ask the court whether your state allows a simpler method for small estates.
Do I need an estate account if the estate is very small?
Not necessarily. If the estate has almost no assets and little money coming in, you may not need a separate account. Ask the probate court clerk whether your state has a small estate process that lets you settle the estate without opening a bank account. Some states allow you to collect money on behalf of the estate without formal probate if the total is below a certain amount.
Who can write checks on the estate account?
Only the person or people the bank authorizes can write checks or withdraw money. Usually this is the executor or administrator. If there are multiple executors, the bank will ask whether all of you must sign checks or whether one signature is enough. Decide this with the other executors and tell the bank your preference when you open the account.
What happens if money arrives after I close the estate account?
If a check or payment arrives after you have closed the account, contact the organization that sent it and ask them to reissue the payment to you personally or to the heir who should receive it. Keep documentation of what the payment was for and where it went. If the amount is large or the situation is complicated, contact the probate court for guidance.