How your bank could help during the loss of a loved one: What to expect

If grieving for a loved one is not tough enough, when you add the logistics of funeral planning, contacting family and friends, locating key documents and managing everything else that must happen shortly after someone has passed away, the prospect of managing their finances can feel incredibly daunting.

In fact, 86 per cent of people who took part in a recent Westpac survey said they weren’t sure what steps to take with their bank if a loved one passed away, while 40 per cent said they had no idea where to start.

So where do you start if you must sort out your loved one’s finances shortly after they’ve passed away, or supporting someone who’s facing that task?

Locate key documents

When beginning to deal with your bank and other organisations, it’s helpful to get prepared by gathering important documents. This helpful checklist from Westpac will guide you about who to call. It also has space for you to write down a case reference number and the date you spoke with each organisation.

Two of the first documents you’ll need are:

• A verification of death, which is issued by a doctor, registered nurse or paramedic
• A medical certificate of cause of death, which is usually issued by the state-based registry of births, deaths and marriages.

These documents will allow you to begin to act on your loved one’s behalf with most (if not all) organisations you’ll be dealing with. It’s worth making multiple copies of each, and having them signed by a justice of the peace (JP) to verify them as being true copies of the original documents.

It’s also important to locate the will and other key documents such as insurance policies or a funeral plan. This article explains some of the vital first steps to take when a loved one passes away.

You’ll need to be able to identify yourself as next-of-kin or the executor when dealing with organisations from insurers to funeral providers, so it’s worth having your own driver’s licence, passport, Medicare card and other forms of identification on hand.

Have the conversation with your loved one’s banks or credit unions

Finance-wise, the next step is to contact the relevant banks or credit unions where your loved one may have had accounts. Locating debit or credit cards in their purse or wallet and paper statements in their files may help you identify which organisations to start contacting.

Felicity Duffy, head of segments at Westpac, says that discussing finances following the passing of a loved one might seem overwhelming, but she encourages people to make contact as soon as is practically possible so that their financial institution can provide guidance and support.

Westpac offers three different ways of notifying them of a customer’s death – visiting a branch, calling or notifying the bank online.

“One of the reasons that we’re passionate about opening up this conversation is because we know that almost one third of our customers who lose a loved one can face financial difficulties in their first 12 months,” Duffy says.

Not only does Westpac have an estates management team that specialises in helping customers manage a passed customer’s estate, but the bank has recently put more than 2,000 of its customer service employees through training to better support conversations with families who have lost a loved one, and provide them with the help they need. The program is being rolled out to all Westpac’s customer service employees this year.

Duffy explains that Westpac can provide assistance to the families of the deceased person, and having the initial conversation can determine what type of assistance is available. 

The cost of a funeral, for example, can come as a shock to many families, she says.

“Not everybody is in a position to be able to fund a next-of-kin or loved one’s funeral out of their own pocket. So the ability to be able to access [the deceased’s] accounts for that is important,” she says.

While previously customers could request access to the account of a loved one that had passed away, specifically to fund a funeral, Westpac recently expanded this policy. The bank now recognises that families may prefer to celebrate loved ones in their own way and use the money for something personal to the person instead of a traditional funeral.

“We’re pleased to be able to ease the financial pressure people may be facing in a difficult time, and being able to say ‘actually, we’re able to release funds beyond just a funeral, and provide the right service for what’s important to you’,” Duffy says.

Similarly, banks will often be able to assist on a case-by-case basis if the family of the deceased person is concerned about the financial road ahead. In Westpac’s case, they can refer people to the Westpac Assist team, who can discuss options such as flexible payment arrangements or variations to loan repayments, and other avenues depending on the situation.

What happens if a will is not in place or able to be located?

Dying intestate – that is, without a will – makes navigating the closure of bank accounts and all aspects of winding down a deceased person’s estate more challenging.

Many studies suggest that about 50 per cent of Australian adults don’t have a will, and Westpac’s own customer data confirms more than half of its customers who passed away last year did not have a valid will.

“It’s a massive number,” Duffy says. “This makes what’s already a difficult time even harder in navigating through the process. There’s a really strong message here about making it easier for your loved ones by starting to plan, and getting the information that’s needed.”

She recommends visiting Westpac’s website, which has a range of resources to help Australians with some of the steps and decisions around the loss of a loved one. The Australian Securities and Investment Commission’s Moneysmart site is also a helpful source of independent advice on the will-making process.

If your loved one doesn’t have a will or it can’t be found, it’s still best to notify their bank as soon as possible with the death certificate, and let them know that a will has not been located. In this instance, the next-of-kin may need to be appointment by the courts to act on behalf of the estate.

The nitty gritty of closing accounts

There are various complexities in winding up savings and everyday accounts, terms deposits, home loans and credit cards, superannuation and insurances, but these are some of the more common scenarios people face when closing the accounts of a late loved one.

If your spouse (or someone with whom you shared a joint account) passes away, you can usually still access your joint account once the bank has received a certified copy of the death certificate. You can then transfer the account to the surviving account holder’s name only, although in some cases, Duffy explains, new accounts for surviving spouse may need to be established.

“A credit card is one that’s worth noting,” she says. “You could have had a credit card where the primary holder has passed away, and you had a secondary card attached to that credit card. That primary credit card will need to be closed.”

“But we do want to be sure that we’re in a position to assist the person with the secondary card to then have access to the credit that they may need. They’ll need to apply for that credit card themselves, which is just a slightly different nuance to the joint account where you’re both liable for that account.”

Duffy emphasises that the key point is to start the conversation with the bank sooner rather than later. Doing this allows the bank to put a hold on the deceased person’s account, which stops any unauthorised use of the funds, and protects against fraudulent use.

“We live with complex financial situations and the aim of the resources we’ve got online, as well as starting these conversations, is to make it as simple as possible and ensure people stay in a healthy financial position during a difficult time,” Duffy says.

Useful resources for dealing with finances when a loved one passes away

• Westpac’s Loss of a Loved One resources
• Westpac’s downloadable Loss of a Loved One support guide
• ASIC’s MoneySmart website for information on wills
• Australian Funeral Directors Association’s website for information on funerals
• Centrelink for information on bereavement payments

Have you had to wind down a loved one’s estate? What was your experience?

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.