What Happens to a Bank Account When Someone Dies Without a Will in Maryland?

Bank accounts are one of the most common assets that get passed on to family and loved ones after someone dies.  Most Marylanders have bank accounts – approximately 4 in 5 households – so this kind of asset is one that most wills and probate cases will eventually have to deal with.  But what happens when someone has a bank account and dies without a will instructing their heirs how to handle the account?

When someone dies without a will, they are what we call “intestate.”  The law in Maryland – as in most states – says what happens to their assets and property under the rules of “intestate succession.”  These are essentially the default inheritance rules that say what happens with all assets and property – bank accounts included – in the case that a will doesn’t exist, cannot be found, or becomes invalidated.  In Maryland, this usually means the will passes to your nearest family member, most likely your spouse, children, or parents.

For help with an inheritance case or writing your own will, call Rice, Murtha & Psoras’ Maryland will and estate lawyers today at (410) 694-7291.

Are Bank Accounts Inheritable in Maryland?

Generally speaking, all kinds of financial accounts can be inherited like any other property when someone dies.  Savings accounts, checking accounts, money market accounts, CDs, and even investment accounts, stock portfolios, 401(k)s, IRAs, and so many other accounts can all be passed on to a loved one when the owner passes away.

However, there is one important rule that skips the process of passing an account to heirs through a will entirely.  If your account is a transfer-on-death (TOD) account or has a joint owner, then that skips the will entirely.  This means that a transfer-on-death account is automatically transferred to the named beneficiary when the owner dies and does not become part of the will or the deceased’s estate.  When someone dies with a joint account, their name is simply removed, and the other owner continues to have access to the account and the money in it.

These can be important tools our Maryland will and estate lawyers can help you use to transfer your assets and plan for your estate to be passed on, but they can also be quick ways to get assets from a loved one without having to go through all of the official processes and procedures related to probating a will or taking a deceased’s estate to court for intestacy proceedings.

How Do Bank Accounts and Other Assets Pass Without a Will in Maryland?

If there are no transfer-on-death properties to the account, then it will become part of a deceased person’s estate like any other property, money, and accounts they own.  The estate – including the bank account – will usually pass on to the deceased’s heirs.  But if they don’t have a will, you need to look at Maryland’s intestate succession laws to see who the heirs are.

These rules are a bit complex and change depending on what family the deceased had, whether they share their children with their spouse, whether they have children from a previous relationship, and other factors.  However, the simplest way to explain this might be to start with some situations and explain the rules that apply:

Decedent is Married

If the person who died – the decedent – has a spouse and no children, the spouse gets the full estate, according to Md. Code, Est. & Trusts Art., § 3-102.  If the decedent has at least one underaged child, the spouse gets half, and the decedent’s children – whether from this marriage or another relationship – share the other half equally.

If the decedent has adult children from another relationship but no minor children, then their current spouse gets $100,000 from the estate, plus half of everything else after that.  The rest is split among the decedent’s children – whether they’re adult children from this relationship or another.

How Children Divide Their Shares

If the decedent has children, then § 3-103 says their children get their shares of the estate “by representation.”  If the decedent was not married at the time of death, the children split the whole estate; otherwise, this is how they divide their share after the spouse gets their share off the top.

How to divide an estate “by representation” is explained under § 1-210.  First, you count up the number of children the decedent has or had, including any children who passed away but left living children of their own.  Leave out any children who died without their own children or whose children already passed away as well.  So for example, say Xavier had three children: Alex, Bethany, and Charles.  If Charles passed away and left Xavier with two grandsons, Dennis and Elton, then you would still count all three children.  If Charles died without children, exclude Charles and count just Alex and Bethany (2 children).

You then break up the estate into that many equal parts and give each child a share.  If a child already passed away, you pass their share on to their children instead, repeating the process again for that generation if they died but had their own children.

So, in our example above, Xavier’s bank account and other assets would be divided as such: Alex gets one third, Bethany gets another third, and then his grandsons Dennis and Elton split Charles’ third.  If Charles died with no children, then Alex and Bethany split the estate 50/50 instead.

Note that adopted children count the same as children related by blood.

Decedents Without Children or Spouses

If the deceased has no kids and is not married, then their parents get the estate instead.  If the parents were already deceased, the estate is given to whatever family is closest, in the following order: siblings, then nieces and nephews (or grandnieces/nephews “by representation”), then grandparents, then aunts and uncles, then cousins and their kids “by representation.”  Parents and grandparents usually split the estate equally, but if only one parent/grandparent or grandparent pair survives, they take it all instead of divvying up the other half as it passes down their family line.

If there are no blood relatives around, then unadopted stepchildren will inherit by the same “by representation” rules as children related by blood.

Decedents with No Heirs

If someone dies without any heirs, their will would be able to give their accounts and assets to a friend, dating partner, college, charity, or other party of their choice.  Without a will, § 3-105 gives everything to the local public schools or to the Department of Health if the decedent was in a long-term care facility.

Call Our Will and Estate Lawyers Today

For help with a loved one’s inheritance or writing your own will, call the Annapolis will and estate lawyers at Rice, Murtha & Psoras at (410) 694-7291.