What Happens to Your Bank Account When You Die Without a Will in California?

Every year, thousands of Americans pass away without a will, leaving their families to sort through a sometimes complicated and emotional process called probate. In California, this process can be especially challenging because the state’s intestacy laws dictate who inherits your assets if you don’t leave behind clear instructions. At Blacksburg Law, we’ve worked with families dealing with these situations, helping them understand what happens when a loved one dies without a will.

In this article, we’ll focus on a critical question: What happens to your bank account when you die intestate in California?

What Does it Mean to Die Without a Will?

When someone dies without a will, they’re considered to have died “intestate.” Without a will to outline your wishes, California law takes over to decide how your property, including your bank accounts, will be distributed.

California’s intestacy laws follow a strict order of inheritance. If you’re married, your surviving spouse is typically first in line to inherit. After that, it might be your children, parents, siblings, or more distant relatives. The exact distribution depends on your family structure.

While this might sound straightforward, the reality is often more complicated. For example, if your bank accounts are part of your estate and not set up with a beneficiary designation, they may go through probate—a court-supervised process that can take months or even years to resolve.

How Intestacy Laws Impact Bank Accounts

If you have a bank account solely in your name and don’t name a beneficiary, the account will typically go through probate. The court will use intestate succession rules to determine who receives the funds. This can be a time-consuming and costly process for your loved ones who may need access to those funds immediately.

Joint Accounts

Joint accounts can function differently depending on their setup:

• Joint Tenancy with Right of Survivorship: In this case, the surviving account holder inherits the entire account automatically. However, banks may temporarily freeze the account until certain paperwork is completed.
• Other Joint Accounts: If the account isn’t specifically set up with survivorship rights, it might still be subject to probate and split according to intestacy laws.

Payable-on-Death (POD) or Transfer-on-Death (TOD) Accounts

Accounts with a designated beneficiary—like POD or TOD accounts—bypass probate entirely. When you die, the funds are transferred directly to the named beneficiary, making the process faster and easier for them.

What Is Probate and How Does It Affect Bank Accounts?

Probate is the court-supervised process of managing and distributing a deceased person’s estate. If you die without a will, the court appoints an administrator to handle your assets, including your bank accounts. Here’s what the process involves:

1. Inventorying Assets: The administrator identifies and lists all estate assets, including your bank accounts.
2. Paying Debts and Taxes: Before any distribution, outstanding debts and taxes must be settled.
3. Distributing Assets: Remaining funds are divided according to California’s intestacy laws.

Unfortunately, probate can be slow and expensive, reducing the overall value of the estate.

Simplified Probate for Small Estates

California offers a streamlined probate process for small estates valued under $184,500. If your estate qualifies, your heirs might be able to use an affidavit to claim assets, skipping the more formal and lengthy probate process.

However, many estates exceed this threshold. If your bank accounts or other assets push your estate above this limit, you’ll likely face the full probate process.

Why Intestacy Can Create Challenges

Dying without a will can lead to several complications, including:

• Family Disputes: Relatives may argue over who inherits what, leading to unnecessary stress and legal battles.
• Delays in Accessing Funds: Loved ones might not have immediate access to money needed for expenses.
• Unintended Beneficiaries: Without a will, your assets may go to people you didn’t intend to inherit them.
• Blended Families and Non-Traditional Relationships: California’s intestacy laws don’t account for stepchildren, unmarried partners, or close friends unless explicitly named in a will or estate plan.

The Importance of Estate Planning

The good news is that you can avoid most of these issues with a well-crafted estate plan. Creating a will or trust lets you:

• Decide who inherits your assets, including your bank accounts.
• Ensure funds are available quickly for your loved ones.
• Avoid disputes by clearly stating your wishes.
• Reduce or even eliminate probate costs and delays.

Planning ahead also allows you to take advantage of tools like POD/TOD accounts or trusts to simplify the transfer of assets.

Let Blacksburg Law Help You Plan

At Blacksburg Law, we know estate planning isn’t just about paperwork—it’s about making things easier for your loved ones. Whether you need help setting up a will, trust, or beneficiary designations, we’re here to guide you through the process.

Don’t leave your family with uncertainty. Contact Blacksburg Law today for a free consultation to discuss your estate planning needs. Together, we’ll help you create a plan that protects your loved ones and ensures your wishes are honored.

Call us at 415-508-5600 or visit Blacksburg-law.com to get started.