How do you claim a deceased person's money from the bank?

Question

José Manuel Alburquerque · Accepted Answer

When the bank learns that the account holder has died, it freezes his or her accounts. It only releases the balance once the heirs prove who they are and how they have divided the estate. If they have not yet paid the “impuesto de sucesiones”, the Spanish inheritance tax, the bank can withhold the amount of that tax, but not the whole balance. In the meantime, that money can be used to pay for the burial and the tax itself. Direct debits continue to be paid unless all the heirs say otherwise. What happens to the account On learning of the death, the bank blocks the cards, passwords and online banking. People authorised on the account can no longer use it. Until the estate has been divided, the bank only allows certain payments: Funeral or burial expenses. Direct debits, such as electricity, water, insurance or taxes. Inheritance tax, if the heirs request it. The bank pays it directly to the “Agència Tributària de Catalunya”, the Catalan tax authority, without handing the money over to them. Transactions authorised by all the heirs. It is advisable to notify the bank of the death as soon as possible and in writing. If wrongful charges are disputed later, it is the heirs who have to prove when they gave notice. If the account had other holders, it depends on how it was opened. In an either-to-sign account, also called a joint and several account, the other holders can carry on using it. But the part of the balance that belonged to the deceased goes to his or her heirs. That part need not be half, because it depends on who put the money in. If this cannot be proved, the money is presumed to belong to the holders in equal shares. In an all-to-sign joint account, every transaction needs the signatures of the other holders and of all the heirs. How to claim the balance To release the balance, the bank asks for the following documents: The death certificate. The certificate of last wills from the “Registro General de Actos de Última Voluntad”, the Spanish register of wills. The notarial copy of the last will or, if there is none, of the declaration of heirs. The document of acceptance and division of the estate. Proof of payment of inheritance tax or of exemption from it. The bank insists on this last document because, if it hands over the money without it and the heirs do not pay, the law obliges the bank to pay the tax. But if the heirs provide everything else, the bank can withhold the amount of the tax, not the whole balance. According to the “Banco de España”, Spain's central bank, the bank cannot make release of the balance conditional on the heirs cancelling other products or taking on the deceased's loans. That does not wipe out the debts, which remain the responsibility of the heir who accepts the inheritance. Nor can the bank charge a fee for processing the inheritance if all it does is review the documents. It can only charge one if the heirs instruct it to prepare the division of the estate or the tax return. If the bank delays without good reason, the heirs can complain to its customer service department and, if it does not reply in time or does not find in their favour, to the Bank of Spain. How to find out what the deceased had Even before accepting the inheritance, the heirs can ask the bank for a free certificate of the balances the deceased held on the day of his or her death and for the agreements for his or her loans and guarantees. They are entitled to know about transactions after the death. The Bank of Spain considers it good practice to give them those for the year before the death as well, which is useful if it is suspected that someone withdrew money in the final weeks. If they do not know which banks the deceased had accounts with, they can ask the “Agencia Tributaria”, Spain's tax authority, for the deceased's tax data. The data does not list the accounts themselves but does show, for example, the interest the banks paid him or her, which reveals which banks he or she dealt with. To find out about his or her loans and guarantees with any institution, they can ask the Bank of Spain for the deceased's credit risk report, known as the CIRBE.