Tag: EIN

Video

Good morning. It’s Andy Stautz at Stautz Law, and I am back today for another talk about a probate and estate administration topic. Today’s topic is the estate bank account.  

When Do You Need an Estate Bank Account?

Now, this is one of the things that a personal representative, (also called an executor, if you’re more familiar with that term), needs to do right at the beginning of an estate administration. So, you know, you petition the court to open an estate for the person who’s died. If the court approves that petition, they’ll grant it, they’ll issue the letters of administration, congratulations, now you’ve got a personal representative with an open estate, and the personal representative has these letters of administration. And that means it’s time to gather estate property.  

Well, where do you put it once you have it?  

And the answer is you have an estate bank account, which is separate from the personal representative’s personal accounts and separate from the decedent’s bank accounts, right?  

The Estate as a Separate Entity

This bank account is going to be just for the estate itself, which is like a separate entity. It’s like its own company for the duration of the estate administration. So you need a separate account so that you can keep track of what comes in and what goes out and so that the accounting can be separate so that you can show to the other beneficiaries, to the court if necessary, how the personal representative has handled the estate property.  

I always give my personal representative clients an instruction sheet to take to the bank when they go to open this estate bank account. And probably the most important two items are, one, it’s a separate account. I keep harping on this, but that’s because it matters. 

EINs for Estates

We want an account that’s just for the estate. And to do that, the estate needs an identity, right? It’s not the personal representative, it’s not the decedent, so you have to get your own ID number. And that is an employer identification number, an EIN, which is obviously usually for companies, usually for businesses, but it’s the same type of ID number that the IRS federal tax authority uses for estates. So the personal representative has to go apply for an EIN for the estate, and then they’ll take that EIN to the bank to show that the estate is a separate entity that can have its own account.  

So I provide instructions to my clients on how to request an EIN. It’s really easy and it’s online these days. Sometimes I apply for an EIN for the estate on the personal representative’s behalf, but you need a separate authorization sheet, right? Not just anyone can go around willy-nilly applying for other people for these tax IDs.  

Conclusion: Putting It All Together

But that’s kind of the process: Right at the start, your estate, you’re spinning it up, you’re kind of starting administration. You need a place to put the estate property as you gather it, so the personal representative gets an EIN, goes to the bank, opens an estate bank account, and then that lasts for the duration of the administration.  

And like I said, I give all my clients an instruction sheet on this because, you know, it’s kind of the first item of business.  

So that’s all I’ve got for today on this topic. I think I’ll probably talk more about accountings and inventories later. This was just kind of a what you need to know about this particular step in Indiana state administration. So you’re on my website, obviously. The end card will have my contact information. Give me a call or e-mail me if you’ve got questions about this or you want to work with me on this or any other matter. Hope this informational talk’s been useful and bye for now.