My 62-year-old husband died after a short illness, and now our joint bank account is frozen

Thursday at 01:33 PM

If you share a joint bank account with your spouse, you probably assume you’d still have access to it if they were to pass away.

So, it may come as a surprise to find out that your account could, in fact, be frozen by your bank, leaving you without access.

Let’s say a woman’s 62-year-old husband died after a brief illness. Since it came on suddenly, the couple didn’t have time to prepare their finances. So, when the woman went to access funds in their joint bank account to pay for funeral expenses, she discovered that the bank had frozen the account.

This can happen for several reasons. For example, even if the bank is aware of the owner’s death, they could freeze the account if they haven’t been notified directly by the family. Luckily, this situation can be easily remedied by calling the bank and providing them with a death certificate.

But what are some of the other reasons a spouse may find themselves locked out of their account — and what can they do about it?

One reason an account might be frozen is that it doesn’t have joint tenancy with right of survivorship (JTWROS) — a legal arrangement that applies to individuals who share a financial account or other asset.

In this case, upon learning of the account owner’s death, the bank will freeze the account until the probate court appoints someone as a representative with access to the account.

When an account has JTWROS, it means that, on the death of one of the joint owners of the account, the surviving owner takes over the account. This should happen without any delays and will happen even if the will specifies otherwise.

Many people believe that rights of survivorship are automatic when they first open a joint account. However, while some joint accounts do specify JTWROS out of the gate, others will only have it if you sign an additional agreement.

If you’re unsure about your own joint account(s), check with your bank so you don’t end up inadvertently losing access to it — even temporarily — in the event of your partner’s death.

One of the main advantages of JTWROS is that the assets in the account don’t have to pass through probate. This is a court-supervised process where the assets of the deceased are assigned according to the wishes outlined in their will or, if there isn’t a will, decided by the probate court according to state law.

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Probate can be costly and take months or even years, so you’ll want to avoid it where possible (especially for something like a joint bank account).

If you and your spouse don’t have a joint bank account, probate can also be avoided by naming each other as beneficiaries of your separate accounts. This will allow the account to transfer directly to the survivor, although it may not be immediate as in a JTWROS agreement.

Another option is to set up a trust to hold a spouse’s assets, with the other spouse named as the successor trustee. In this case, when the main trustee dies, the successor becomes the new trustee with full access to the assets in the trust.

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Preparing an estate to avoid probate is a complex task, so you may want to consider consulting an attorney who specializes in estate matters (a financial planner or accountant may also be able to help with certain aspects).

It could be helpful to have this support team in place if your spouse passes away, since they could take care of many of the mundane administrative and financial tasks involved.

They will often be able to provide you with a checklist for what to do in the event of the death of a spouse. One of the first things on this list would be contacting your estate lawyer (or your family lawyer) and obtaining multiple copies of the death certificate.

You’ll also want to contact your insurance company and most organizations with ties to your spouse, such as their bank, investment advisor, credit card companies, and the Social Security Administration (SSA).

In many relationships, one partner is primarily responsible for the finances of the family. If this is the case, it’s important that the other spouse be fully informed of where important documents are stored, such as wills, as well as the passwords for all financial accounts. They should also have access to safes or safe deposit boxes where relevant documents are stored.

The death of a spouse can be devastating and, unfortunately, it comes with a lot of extra work for the surviving spouse.

Preparing ahead of time and having a trusted team of advisors in place can alleviate much of this stress — and ensure you don’t get locked out of any joint bank accounts.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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