It's a mistake to assume that the checking and savings accounts of the deceased are unaffected after death. For loved ones that must rely on the funds in a bank account, it's vital that you understand and prepare ahead to cope with this issue by using estate planning strategies. Read on to find out more.

Types of Bank Account Ownership

Estate issues depend a great deal on the way a bank account is owned. Take a look at the following, for example:

Single Owner – These accounts are still owned by the deceased after death. After the probate court has appointed a personal representative (or executor), the account transforms into an estate-owned account. Rather than being owned by Mary Jones, for example, the new owner is the Estate of Mary Jones. That move can take time, though. The will has to be located, read, and filed with the probate court. Then, the probate court has to approve of and name the executor. In the meantime, the account is frozen and the funds are inaccessible. All automatic drafts will be returned unpaid and checks can bounce back to the sender.

Joint Accounts – In most cases, anyone other than the deceased named on the account automatically becomes the owner of the account. Married couples commonly have this type of account. Speak to your bank about adjusting the name to remove that of the deceased.

Accounts With Additional Signers – Some account owners add approved signers to the account. That means they can sign checks and may even have their own debit cards for making purchases. Unfortunately, those privileges end with the death of the owner. Signing privileges mean nothing as far as estate issues go. On the other hand, it's very handy to have someone else available to write checks, pay bills, and make purchases if the owner is incapacitated. A good estate plan encompasses what occurs with incapacity along with a passing.

Payable-on-Death Accounts – Estate attorneys advise clients to consider a payable-on-death account on single accounts. That means that anyone listed on the form automatically becomes the owner (or part-owner) of the account once the death certificate is presented to the bank. That means family members can access needed funds for the funeral, burial, and for other expenses without having to wait for probate to appoint a personal representative. Those listed have no powers or access to the account until the owner passes away unless they are also designated signers (and that is recommended).

Dealing with a bank account is only part of a complete estate plan. To find out more about bank accounts and estate planning, speak to an estate planning lawyer.