Dealing with finances

You may have to deal with your child's building society and credit card accounts and debt and credit agreements when they die.

Closing a bank or building society account

When someone dies, no more money can be withdrawn from their account unless it was a joint account with someone else. However, money can still be paid into the account.

For example, if your child was receiving state benefit via their bank account, the payments may continue and cause problems when you have to pay them back later, so it's important to tell the benefits agency of your child's death.

Everything that belonged to your child is now known as their 'estate', and the money left in their account (as well as anything else they may have kept at the bank) becomes part of that estate.

If there is very little money in the account, the bank or building society may be able to release it into the estate immediately. Otherwise, they will need to see a letter of administration or probate, or letters of confirmation if the account is held in Scotland.

Interest-earning accounts

If your child opened an interest-earning account (for example, a building society savings account), it will continue to earn interest until the account is closed.

Overdrafts

If the account is overdrawn, the overdraft and any interest will have a claim on the estate. The account will be frozen so that no direct debits or standing orders are paid.

Joint accounts

In England, Wales and Northern Ireland, if a joint account holder dies the balance is automatically transferred to the other account holder/s, who will then be able to withdraw it from the account. In order to make this change your bank will ask to see the death certificate. In Scotland the money does not automatically pass to the other account holder, it will depend on the terms of the mandate.

Outstanding credit or hire purchase payments

If your child had an outstanding credit or hire purchase agreement, you are not responsible for the repayments. No one else is liable unless the agreement was taken out in joint names. However, if your child left any money, or any possessions with value (which are now counted as part of their estate), these will be used to pay off the outstanding credit or debt. If there is not enough money in the estate to cover these loan repayments or bills, the companies will write them off.

Credit cards

If your child had any credit cards, the companies will continue to send statements and charge interest on any outstanding balances. If there is a joint card holder, they will still be liable for the money owing.

Any money in the estate should be used to pay off the card balance/s; otherwise the credit card companies may seek payment through the courts. However, if there is not enough money in the estate to cover the outstanding balances, the companies will write them off.

If there is an additional card holder on the credit card account (this is not the same as a joint card holder), they are not liable for the debt. The credit card company will freeze the account and ask for the card to be returned.

Other debts and credit agreements (e.g. student loan or car loan)

If your child left any debts or outstanding credit agreements, no one else should be liable for them unless the debt was taken on jointly or someone acted as a guarantor. If the estate does not cover the debt it will be written off.

The only exceptions to this are certain household debts such as council tax or water charges, for which someone else may be liable if they were your child’s partner or shared accommodation with them.

The Student Loans Company will automatically write off any outstanding student loan, as long as you provide the original death certificate or a coroner's interim certificate.

Reviewed: December 2015
Next planned review: December 2016

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