One of the issues that often takes families by surprise after the loss of a loved one is the way in which banks handle the accounts and financial obligations of the deceased.

Under standard banking procedures, the death of a client, once officially notified to the bank, triggers a series of immediate and legally significant changes that heirs and estate administrators should be aware of.

Immediate Termination of Accounts and Cancellation of Banking Instruments

Upon official notification of the client’s death, all accounts held by the deceased and all agreements between the client and the bank are immediately terminated. Any outstanding liabilities owed to the bank become due and payable with immediate effect.
At the same time, all credit and debit cards are cancelled, together with any powers of attorney, cheque books, and all standing orders, direct debits, and other payment or transfer instructions.

Communication with Insurance Companies

Where insurance policies have been assigned to the bank, the bank will notify the relevant insurance company and initiate the required follow-up procedures.

Documents Required from Heirs

Before any administrative actions can be taken, the relatives of the deceased or the legally appointed administrator must provide the bank with the following documents:

• a Death Certificate;
• a Certificate of Heirs issued by the Muhtar;* and
• confirmation from the Tax Department that the deceased has no outstanding tax liabilities.

It should be noted that information relating to the deceased’s bank accounts is disclosed exclusively to a duly appointed Administrator or Executor of the estate, or to their legal representative, and only upon presentation of the original or a certified copy of the relevant court order.

Authority of Administrators and Executors

Once formally appointed by the court, Administrators or Executors are authorised to:

• open an estate administration account;
• make withdrawals from that account;
• execute transfers of funds on the basis of written instructions;
• request the issuance of a cheque book; and
• use a debit card linked to the estate account for payments or withdrawals.

Sources Used by Banks to Verify a Client’s Death

Banks verify the death of a client using the following primary sources:

• the Deceased Persons Register maintained by the Association of Commercial Banks, which contains records dating back to 1990;
• the Government Gazette; and
• the daily press.

Authors: Georgios Kosasvili.