Estate Settlement Process of Bank Account
In Singapore, when a bank account holder dies, his/her bank account(s) will be frozen, and the legal representative of the deceased estate or the surviving joint account holder(s) needs to approach the bank to close the account(s). During the settlement period, no withdrawals, including GIRO deductions, will be allowed from the account(s).
Joint Account Fixed Deposit
The surviving joint account holder should provide the bank with a copy of the death certificate, and bring proof of identity (e.g. NRIC) to close the account. The bank will usually automatically give the account balance to the surviving account holder once the account is closed. This is provided the joint account is not pledged to a liability of the bank (e.g. overdraft, or business capital facility).
If there is more than one surviving joint account holder, the bank will usually proportionally allocate the balance. In this case, all parties must be present and provide the relevant documentation to close the account and withdraw the money. If there is any dispute over the allocation, the bank can freeze the account and advise the surviving account holders to seek a court order to settle the dispute.
Single Account Fixed Deposit or Savings Account
If the fixed deposit or savings account is held in a single name, the family members or the legal representative can apply for release of funds from the bank. The degree of complexity depends on the amount. By and large, banks prefer to deal with the legal representative of the deceased person’s estate with the appropriate letter of administration or grant of probate.
If the amount is less than $5,000, the deceased “next of kin” (claimant) can approach the bank without a letter of administration or grant of probate. Next of kin is restricted to the following:
The next of kin needs to do 2 steps.
Step 1: Fill in three forms as follows:
- Application for “release of funds” form. Depending on banks, the contents of this form are usually executed before a Commissioner of Oath/Notary Public for a claim amount of more than $1,000.
- Consent of Beneficiary / Beneficiaries form.
- Indemnity form. This form indemnifies the bank against all liability for releasing the funds to the next of kin without court papers.
Step 2: Attach the following documents:
- Applicant’s birth certificate or IC
- Applicant’s marriage certificate (if applicable)
- Deceased person’s death certificate
- Deceased person’s spouse’s death certificate (if applicable)
Similarly, the bank will release the funds to the next of kin net of any liabilities with the bank, for example outstanding credit card debt.
Points to pay attention to:
- It is common practice for family members to withdraw money from the deceased person’s ATM to settle immediate estate needs. This is illegal and the family members who withdraw the money are legally liable to the deceased estate.
- Before the bank releases the money to the next of kin applicant claimant, it will run a bankruptcy search on the deceased and the applicant claimant through the Public Trustee Office. Only upon written confirmation obtained from a Public Trustee indicating that both parties are not declared bankrupts will funds be released to the applicant claimant.
- The surviving joint account holder is not always entitled to the account balance. Sometimes, the money is given to the account holder to be held in trust while the deceased is alive. This is shown in the case of the Estate of K.P. Doshi vs. Mrs Shobhana (1997). The high court judge ruled that the deceased person’s joint account is part of the estate’s assets to be distributed amongst the relevant beneficiaries.
- Before releasing the funds, the bank has the right to freeze the account and ask for court papers if it is doubtful about the next of kin applicant claimant.