Frozen Accounts, Court Delays, and Grief: What Happens in the Probate Process

Your mother reassured you not to stress; she had everything under control. You were her power of attorney, assisting her with bill payments and account management. After her passing, you thought you would just keep managing things as you always had.

Then you attempted to deposit the insurance check. The bank clerk examined the check, glanced at your power of attorney documents, and shook her head. “I’m sorry, but we can’t process this. You’ll have to go through probate court first.”

All of a sudden, you’re confronted with a legal procedure you’re unfamiliar with, at a time when you’re struggling to cope with your sorrow. The mortgage payment is approaching. Bills are accumulating. And everything you believed was taken care of has turned into a tangled situation.

To understand why this occurs, it’s essential to recognize the changes that happen when someone passes away.

Authority Disappears

Many individuals are unaware that any legal power granted through a Power of Attorney during a parent’s life ceases to exist the moment that parent passes away. The documents that once enabled you to oversee accounts, make financial choices, and manage daily affairs turn into worthless scraps of paper.

This situation often surprises families, as it appears counterintuitive. Just yesterday, you were entrusted with these responsibilities. So why are you unable to continue today? The explanation lies in the legal perspective on death. When a person dies, their legal status transforms. The assets that were owned by a living individual now belong to an estate, which is recognized as a distinct legal entity that must be properly managed through the judicial system.

If proper arrangements are not made in advance, no one automatically possesses the authority to oversee estate assets. Not even the closest relative. Not the individual who had been assisting with financial matters. Not even someone designated in documents that functioned seamlessly during the person’s life.

This abrupt loss of authority leads to immediate practical challenges that leave loved ones entirely unprepared.

Accounts are Frozen

Financial institutions enforce strict regulations regarding who can access accounts after a person’s death. They are legally obligated to safeguard assets until someone demonstrates they have the appropriate authority to manage them. As a result, accounts are frozen, checks are issued to estates instead of individuals, and transactions are halted.

This situation creates immediate practical challenges for loved ones. How can you cover funeral expenses when account access is denied? What will happen to the mortgage payment due next week? How do you manage utility bills, insurance premiums, or other ongoing costs? Are you in a position to pay for all these expenses out of your own pocket? Many individuals cannot, particularly if they are also responsible for their own mortgage, utilities, health insurance premiums, college tuition, and more.

The frustration intensifies when you are aware that the funds are available. You can see the account balance and know there are enough funds. Yet, you cannot access any of it without first undergoing a formal legal process.

Regrettably, gaining access to those frozen assets involves navigating a complicated legal system.

The Court Process No One Wants

When adequate planning hasn’t been carried out, family members must seek the court’s permission to manage estate affairs. This requires submitting documents, paying fees, attending hearings, and waiting for the court to provide the necessary legal authority.

The duration of this process can differ, but typically, families should anticipate it taking several months rather than just weeks. Throughout this period, you’re balancing your personal responsibilities while trying to navigate a complex legal system. You find yourself taking time off work for court dates, collecting necessary documents, and waiting for approvals on urgent decisions. Additionally, you’re also waiting for relatives to sign legal forms and send them back to you.

The expenses can accumulate quickly as well. Court filing fees are merely the starting point. Many families require legal assistance to ensure they follow the process correctly, which leads to attorney fees. There might also be accounting obligations. All these costs are deducted from the estate before any distribution to beneficiaries can occur.

The court system is inherently prone to conflict, which can lead to further delays. Heirs must be notified of court filings, and they have the right to submit claims against the estate, contest the proceedings, or dispute the amounts they are set to inherit. This conflict not only prolongs the court’s ability to reach a significant resolution but can also strain family relationships, sometimes irreparably.

While you are managing court processes and paperwork, the law is making critical decisions regarding your family’s future.

When the Law Makes Decisions for You

In the absence of a will or trust specifying otherwise, state law dictates who inherits what. These regulations adhere to a strict formula based on familial connections. In simple family scenarios, the outcome may coincide with what the deceased would have preferred. However, the process still incurs time and expenses.

The real challenges arise in complicated family dynamics. Blended families. Unmarried partners. Estranged relatives. Family members with unique situations. When state law steps in to make these choices, the outcomes may not truly represent the wishes of the deceased or what is best for their loved ones.

You also forfeit control over important details. Who receives the family heirlooms? How should cherished items be allocated? What becomes of the family home? Without clear instructions, these choices are either left to the court or can spark disputes among survivors as they attempt to determine what is fair.

In addition to the legal and financial issues, there is an unseen cost that families feel most acutely.

The Emotional Toll That Numbers Fail to Reflect

In addition to the time and expenses, there’s an emotional weight that’s difficult to measure. You’re in mourning while also navigating through bureaucracy. You’re making countless phone calls, completing paperwork, and attending court sessions when you’d prefer to be surrounded by family and friends who are grieving too.

Family dynamics can be affected as well. Even in tight-knit families, the pressure of handling estate issues without clear direction can lead to friction. Siblings might clash over decisions. Doubts emerge about whether everything is being managed justly. Past grievances can come to light when individuals are already emotionally fragile.

Amidst all this, you find yourself questioning why it has to be so challenging. Your parent never meant to impose this burden. They simply didn’t understand the importance of planning – or that the planning they did was insufficient.

The silver lining is that none of this needs to happen to you or your loved ones.

A Different Path Awaits

This whole scenario can be avoided. With effective planning and a reliable advisor, families can steer clear of court processes, access their assets promptly, and concentrate on healing rather than dealing with paperwork.

The key difference lies in formulating a thorough plan that is effective after death, not just while alive. This involves considering who will have the authority to handle affairs, how assets should be distributed, and what guidance family members will require when the moment arrives. It entails crafting a plan that articulates your desires and will function when you and your loved ones need it most.

Additionally, it is crucial to have professional assistance on hand to help your family navigate the process. Collaborating with someone who knows you and comprehends your choices provides your family with a trusted advisor to rely on for support, rather than just a pile of documents they are left to decipher alone.

Ultimately, the time to take action is now, while you can make informed choices and establish appropriate safeguards. Your loved ones deserve more than to be left to traverse a complicated legal system during one of the most challenging periods of their lives.

Schedule a complimentary 15-minute consultation to learn more.

This article is a service of Kristen Wong of Seasons Estate Planning, APC, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Life & Legacy Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Life & Legacy Planning Session™.

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.