Bank account when owner dead

What does a bank typically do when the account owner dies, and nobody came to claim the money?

Do they leave the money in that account ad vitam aeternam, or does it get collected and used at one point by the bank?

Although the question is non country-specific it would be interesting to know how it happens in USA and Canada for comparison.

Because it just seems to be that it would be a big waste to keep that money there.

2 thoughts on “Bank account when owner dead

  1. ErikF

    In Canada, the Banking Act RSC 1991, c.46 regulates most banks (except for provincially-created credit unions and caisses populaires.) There are two sections that deal with unclaimed balances: s. 438 (for domestic banks) and s. 557 (for foreign banks).

    From the Bank of Canada’s unclaimed balances site:

    When there has been no owner activity in relation to the balance for a
    period of ten years, and the owner cannot be contacted by the
    institution holding it, the balance is turned over to the Bank of
    Canada, which acts as custodian on behalf of the owner. Balances are
    transferred to the Bank of Canada once a year, on 31 December.

    The Bank of Canada holds unclaimed balances of less than $1,000 for 30
    years, once they have been inactive for ten years at the financial
    institutions. Balances of $1,000 or more will be held for 100 years
    once they are transferred to the Bank of Canada.

    If the balance remains unclaimed until the end of the prescribed
    custody period, the Bank of Canada will transfer the funds to the
    Receiver General for Canada.

    The original bank is required to send a notice to the account holder on January of the 2nd, 5th, and 9th years after the account has gone dormant (ss. 439(1), 558(1)), and interest is accrued until the account is transferred to the Bank of Canada (ss. 438(1), 557(1)). After the 30 or 100 years (depending on the amount) are up, the federal government receives the money and it goes into general revenue.

    Credit unions are different, as provincial legislation affects them. For example, in Alberta the Credit Union Act RSA 2000, c. C-32, s. 117, requires credit unions to notify the account holder after 12 months and 2 years, after which the money goes into the credit union’s unclaimed money account (s. 117(2)). If the amount is less than $100, after 5 years the credit union can claim the money (s. 118(5)); otherwise, after 20 years the provincial government receives the money and it goes into general revenue (s. 120(6)). Other provinces will have similar provisions.

  2. D Stanley

    In the US, this is mostly governed by state law, with some federal oversight. (if your question pertains to a different country I will delete this answer)

    The estate owns the account upon the owner’s death. The bank is required by the SEC to make reasonable attempts to notify the account holder, and ultimately report the unclaimed property after a period of time determined by state law (typically 5 years). If the estate fails to claim the property, it then becomes property of the state (is escheated) and falls subject to the unclaimed property laws of the state. The laws vary from state-to-state, but typically the owner (estate) can file a claim to the money that the state must honor if the identity can be verified.

    The bank holding the money cannot take ownership through any process that I am aware of.

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