Can Probate Freeze Your Savings & Checking Accounts?

When a person dies, his estate often goes through probate before heirs can receive their inheritances. Probate is a legal process in which the court examines the estate's assets, requires the executor to pay off debts and makes sure the will is valid. During the probate process, which can take nine to 18 months, the probate court can freeze the estate's accounts to ensure that nobody gets an inheritance prematurely.

During the probate period, the executor of an estate must use the estate's assets to pay as much of the estate's debts as possible as well as to pay any applicable taxes. The executor cannot distribute inheritances to heirs until all debts are satisfied and all taxes are paid. Thus, the probate court might freeze the estate's savings accounts or other bank accounts until probate is completed to ensure that the executor does not pay out inheritances without settling the estate's debts.

If the probate court freezes an estate's assets, it often grants a small allowance to the estate's survivors -- the living spouse and children of the deceased person. This allows the survivors to continue supporting themselves while the probate court examines and settles the estate. The estate's survivors usually receive the allowance directly from the court on a regular basis; the allowance is taken out of the estate's assets.

If you held a joint account with a deceased person, the account transfers solely to your name upon the decedent's death and thus is not included in the estate for probate purposes. Thus, the probate court cannot freeze joint savings or checking accounts that you held along with the deceased person. In addition, you are not required to use such accounts to pay off the deceased's debts unless the deceased owed money on other accounts that you held jointly such as a joint credit account.

If you put your assets into living trusts and bequeath the trusts to your survivors, your assets will not go through the probate process. Living trusts work similarly to joint accounts in that the account transfers to the beneficiary immediately upon your death. Thus, the courts are not involved and cannot freeze the accounts until the estate is settled, and your beneficiaries will receive the bequeathed funds more quickly.