How to withdraw funds from a bank account after the death of a loved one: New regulations will come into effect on June 1

How can beneficiaries access bank deposits after the account holder's death?

The “Notification on the Optimization of Relevant Requirements for the Withdrawal of Deposits from Deceased Account Holders” ( hereinafter, the new regulation) previously issued by the State Financial Supervisory Authority and the People's Bank of China will come into effect on June 1st. This new regulation facilitates the handling of deposit inheritance by increasing the limits of accounts for simplified withdrawals and expanding the scope of such withdrawals. What other changes have been implemented?

Inquiry about bank accounts and balances of a deceased account holder

“In practice, heirs face two main 'obstacles' when withdrawing bank deposits: difficulty in making inquiries and in making withdrawals,” according to sources in the financial sector.

An expert pointed out that the first considerable challenge for heirs is to find out what bank accounts the deceased account holder had.

What to do if the deceased's bank accounts are unknown? An investigation into UnionPay's mobile payment application revealed that it offers a “consultation service for traces of bank accounts of deceased individuals”. Currently, this service is only being tested in the provinces of Sichuan, Jiangsu, Fujian, the city of Chongqing, and Wuhan, requiring the submission of documentation for review at physical bank branches that accept the process. It is understood that the areas and financial institutions covered by this service will gradually be expanded.

After locating the bank account, how do you verify its balance? Visits to different banks revealed that if one has the card and the PIN, the heirs can check directly at ATMs. Without the PIN, they will need to provide supporting documentation to the bank for the inquiry.

According to the “Notification on the Simplification of Inquiries Related to Deposits of Deceased Holders” jointly issued by the former General Office of the China Banking and Insurance Regulatory Commission and the General Office of the Ministry of Justice, the spouse, parents, and children of the deceased holder can present documents that prove their relationship ( such as family registration, marriage certificate, birth certificate, etc. ) and their valid identification. The heirs or legatees designated by the notarial will can present the death certificate of the holder, the notarial will, and their valid identification, individually or jointly, to request in writing from the financial institution where the deposit is held the processing of the inquiry.

The previous notification indicated that the scope of the investigation includes the balances of deposits and financial assets other than deposits issued or managed by the financial institutions themselves. Once the bank verifies compliance with the requirements after a formal examination, it will notify the applicant in writing of the consulted balance. For third-party products sold on consignment whose amount cannot be determined, the bank must inform the applicant to consult with the corresponding institution.

Transaction details inquiry of the account

It is understood that previously, banks could only provide records of transactions after the account holder's death, without allowing inquiries about transactions during their lifetime. However, in practice, there is a need to access the details of transactions while alive.

A district court in Xiangcheng, Suzhou city, Jiangsu province, once issued a ruling on a case. In June 2023, the legal heirs of the deceased Li (his parents, wife, and daughter) sued a bank requesting that it provide bank statements from April 2021 to February 10, 2023, the period during which Li was still alive.

The bank argued that, according to the relevant regulations of the former Commission for Banking and Insurance Regulation, it could currently only provide records of transactions after the account holder's death. As for the records during their lifetime, there was no clear guideline due to personal privacy considerations and information protection, so inquiries would not be conducted temporarily.

After the review, the court held that a contractual relationship of debit card had been formed between Li and the defendant bank. Although the law establishes the principle of confidentiality for account holders, it must be analyzed according to the specific circumstances of the case whether the transaction records of the deceased holder during their lifetime can be provided. The four plaintiffs are legal heirs of Li. They specified the scope of their request for consultation of bank statements and explained that, due to the numerous external debts of the deceased, their investigation had reasonable grounds such as understanding the payment of debts during their lifetime, presenting the corresponding evidence to support their claim.

The new regulation clarifies that banks can provide the details of the transactions of the deceased account holder after death and within the 6 months prior, at the request of the first-order heir, unless the deceased account holder had stipulated otherwise during their lifetime.

An official from the State Financial Supervision Authority declared on April 26 that the details of the transactions of the deceased account holder's bank account record certain personal information during their lifetime, which may involve personal privacy and should be handled with caution. However, in practice, there are also legitimate needs for the heirs to consult the details of the deceased account holder's transactions during their lifetime under certain circumstances, which must be satisfied when they are legitimate and legal.

The official stated that to balance the protection of personal information and the consultation needs of heirs, in accordance with the relevant legal provisions, the new regulations clarify the requirements for consulting the details of the transactions of the account, meeting the needs under specific circumstances. To avoid unnecessary and unrestricted inquiries, protecting the personal information and privacy rights of deceased holders, the new regulations stipulate the authorized applicants and the time limits for inquiries.

In the opinion of an expert, 6 months satisfy the right to know for most family members, being the main reason for verifying the details of transactions to check if the deposits of the deceased account holder were embezzled before their death. If the account holder was older, it is possible that their bank card was not in their possession, and checking six months of bank statements also allows other heirs to clearly see the details of the deceased's account and avoid some disputes over embezzlement of funds. In general, except in the case of sudden death, the deposits of the deceased account holder can basically be formalized within 6 months following their death.

However, the expert believes that in the case of a real dispute, from the perspective of a litigator, consulting only 6 months of records may not be sufficient, generally requiring around 1 year of records.

The official from the State Financial Supervision Authority stated that banks are encouraged to agree in advance with account holders, through contracts or other means, on matters such as the inheritance of deposits and the inquiry of transaction details after their death.

Withdrawal of deposits less than 50,000 yuan

If the account holder passes away, can the heir go directly to the bank to withdraw funds with the bank card and the PIN? A lawyer pointed out in an interview that, according to the new regulations, the procedures for withdrawing small deposits from deceased relatives have been simplified, regardless of whether the heir has the PIN or not, and are no longer the same as before. If necessary, all heirs must bring the relevant supporting documentation to the notary office for the notarial certification of the inheritance.

The lawyer explained that if the deposit does not exceed 50,000 yuan, the heirs can process the simplified withdrawal of deposits from the deceased account holder. The required documents are: the death certificate of the account holder, valid identification of the heir, a signed letter of commitment from the heir, and proof of the relationship between the heir and the account holder.

It is important to note that the limit of 50,000 yuan applies to the balance of the account of the deceased holder at the same financial institution ( excluding pending interest ). That is to say, each bank has a simplified withdrawal limit for small deposits of 50,000 yuan.

It was also observed that the new regulations include gold accumulation products from financial institutions and treasury bonds, as well as wealth management products sold by agents in the simplified withdrawal space, whose principal and actual income will be included in the account limit of 50,000 yuan. Additionally, the new regulations clarify that funeral expenses and pensions are not included in the limit of 50,000 yuan and can be withdrawn in full in a simplified manner.

The lawyer also mentioned that in practice, if the heir has the bank card and the PIN, they can also withdraw small amounts on their own at an ATM. Additionally, if the deceased has an identity document that has not been canceled, the heir can present the deceased's identity document and their own, using the bank card and the PIN to manage the withdrawal, generally for amounts less than 50,000 yuan, without the bank needing to review additional documentation.

Withdrawal of deposits over 50,000 yuan

In practice, if the deposit in the bank exceeds 50,000 yuan, how should the heirs withdraw it?

The lawyer explained that there are two options: first, all heirs with succession rights can go to a notary with their identity documents, family registration certificates, the death certificate of the deceased, the property certificate of the inheritance, and proof of kinship with the deceased to request the legalization of the inheritance. Then take the notarial inheritance certificate and identification to the bank to withdraw the funds. Secondly, if the heirs cannot reach an agreement or cannot complete the notarial procedures for other reasons, one or more heirs may file a lawsuit before the court. Once the court issues a valid judgment, ruling, or mediation, the heir can withdraw the deceased's bank deposit based on this legal document.

“From a legal point of view, bank deposits have a dual nature of property rights and credit rights. But whether it is a property or credit right, once the succession begins, ownership is transferred, meaning that the ownership of the deposit passes to the heir as provided in the Succession Chapter of the Civil Code. Succession begins with the death of the decedent, so when the account holder dies, the ownership of the deposit is transferred to the heir. However, in practice, for the deposit to be withdrawn from the bank and received by the heir, a series of banking procedures must still be followed,” the lawyer explained.

How to test “my mother is my mother”

“In everyday litigation, there are indeed cases where it is difficult for heirs to withdraw cash after the death of a relative, including colleagues in the environment who have faced similar situations,” commented the lawyer.

He explained that, on one hand, this situation is due to the fact that banks must maintain the minimum level of security required of financial institutions. For security reasons and in accordance with the relevant regulations, banks not only need to verify that the person making the withdrawal is the legal heir of the deposit, but they also require the consent of the other heirs. This seeks to prevent one heir from taking the deposit without the knowledge of the others, generating disputes. Therefore, banks will inevitably be stricter in handling procedures and reviewing information.

The lawyer mentioned that, on the other hand, it can sometimes be difficult to prove that “my mother is my mother.” To verify that the person withdrawing is the heir of the deceased, various documents must be presented, such as the death certificate, identity documents, marriage certificate, family book, etc. However, problems can arise, such as incomplete family records or inconsistent information between documents, making it difficult for the bank to verify the identity of the heir.