An estate account is a temporary bank account opened for the specific purpose of managing and distributing an estate’s assets, including centralizing an estate’s funds and paying estate taxes.
What you need to know
An estate account is a temporary account an executor creates to distribute an estate's assets
Do not mix your personal money with the estate account
You need to get an EIN from the IRS to open an estate account
It's better to open a checking account instead of a savings account
Do not reuse any of the deceased's previous accounts
Think of estate accounts like a temporary bucket for the deceased’s estate. You funnel checking account balances there. Savings accounts. Maybe you sell their house and put that money there as well. Then, if you have to pay any debts, you pay out of that account. Or say you racked up some legal fees or travel expenses working through probate, you’d pay out of that account.
Another analogy is to think of it like a business account. Separating all the financial movements of an estate from your own makes everything, but especially taxes, simpler.
It's typically opened by the executor or personal representative of the estate, and there are some specific rules that you need to follow when dealing with them.
What to do when a loved one dies
When people die, they leave behind a life that must be closed out. Don't tackle it all alone. From planning the funeral to tackling the legal & financial estate, here's an ultimate checklist of all the things an executor needs to do following the loss of a loved one.
Learn moreMary's husband passed away last month. In his will, she was named executor (executrix) of the estate. After getting her letters and formally beginning probate, she contacted the IRS to get an EIN number. She needed that to create a temporary estate account to funnel all of her husband's probate assets and cash into before paying the appropriate taxes, distributing money to heirs, and officially dissolving her husband's "estate". Mary decided to open one at her local bank, and they agreed after seeing her letters, the death certificate, and the EIN number.
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