Estate Account Styling

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Question:

A deceased customer had a consumer savings and a consumer checking account. An EIN number for an estate has been given to us. Do we change the present consumer accounts to an estate account using the same type of interest bearing account for consumers, or do we start new business accounts with the estate EIN number? The business accounts would have different interest, service charges etc., or can we just keep the accounts as they are and change the name to an estate and change to the EIN number?

Answer:

There is no compelling reason to classify the accounts as business accounts. If anything, these accounts should have a lot less activity than they did when the former owner was still managing them. You can use an EIN and a household account type.

I do recommend that you make a clean break of things and close out the accounts in the decedent's name and open new accounts for the estate. That shows clearly the transfer of ownership. It will also allow you, with some adjustments of the dollar amounts, to provide 1099s both in the decedent's name (through the date of death) and in the estate's name (since the date of death).

First published on BankersOnline.com 9/07/09