What Is the Punishment for Taking Money From a Deceased Account?
Learn how unauthorized access to a deceased person's account can lead to legal, financial, and investigative consequences.
After someone passes away, their financial accounts are not automatically available. These assets become part of the deceased’s estate and must be managed through a legal process to ensure distribution according to the person’s will or state law. Taking money from such an account without authorization can lead to significant legal consequences.
Confusion over these rules can arise during emotional times following a death, potentially leading family members to inadvertently break the law. Understanding the legal framework surrounding a deceased person’s accounts is crucial.
Criminal Charges
Withdrawing funds from a deceased person’s bank account without legal authority can result in criminal charges. Upon death, money in solely owned accounts belongs to the estate, a legal entity holding assets until distribution under a will or state intestacy laws. Taking money without completing the required legal process constitutes theft from the estate.
The primary charge is often theft, also known as larceny, which involves unlawfully taking property belonging to another with the intent to permanently deprive the owner. Here, the estate is the owner, and taking funds for personal use implies intent.
Other charges may apply. If the person taking the money held a position of trust, such as a power of attorney (which terminates at death) or was named executor but acted before court appointment, the charge could be embezzlement, the fraudulent appropriation of property by someone entrusted with it.
Fraud charges might arise if accessing the account involved deceit, like misrepresenting oneself as the estate’s representative or forging a signature. Using the deceased’s personal information (Social Security number, account details) to access funds can lead to identity theft charges, sometimes called “ghosting” when involving a deceased person’s identity.1NYS Department of State. After Death “Ghosting” Scam
Possible Penalties
Penalties for unlawfully taking money from a deceased’s account vary, primarily based on the amount involved. Conviction can lead to fines, restitution, incarceration, and probation. These consequences are generally more severe for larger amounts.
Courts may impose substantial fines, potentially thousands of dollars, especially if the theft is classified as a felony. Jurisdictions set different monetary thresholds (often around $1,000 to $2,500) to distinguish misdemeanors from felonies; amounts above the threshold trigger more serious felony charges and penalties.2The Pew Charitable Trusts. The Effects of Changing Felony Theft Thresholds
Restitution, requiring the offender to repay the full amount taken back to the estate, is almost always ordered. This ensures the rightful heirs or beneficiaries receive the assets they were due. Restitution is separate from punitive fines, and payment plans may be arranged based on the defendant’s ability to pay.
Incarceration is possible, ranging from jail time (typically less than a year for misdemeanors) to prison (potentially over a year for felonies). Felony theft, particularly involving large sums or abuse of trust, can result in lengthy prison sentences.
A court might also impose probation, allowing the individual to remain in the community under supervision with specific conditions, such as meeting with a probation officer, paying fines and restitution, and avoiding further criminal activity. Violating probation can lead to imprisonment.
Civil Liability
Beyond criminal charges, taking funds without authorization creates civil liability. The person who took the money can be sued in civil court by those with a legal interest in the estate, primarily to recover the improperly removed funds for distribution to heirs or beneficiaries.
The estate’s personal representative (executor or administrator appointed by the court) usually initiates such lawsuits. This representative has a fiduciary duty to manage estate assets responsibly, including recovering misappropriated property. Beneficiaries might also sue if the representative fails to act.
A common legal claim is “conversion,” the civil equivalent of theft. It involves intentionally interfering with the estate’s right to the funds by exercising unauthorized control over them. Proof requires showing the estate’s right to the money, the defendant’s intentional and unauthorized taking, and the resulting deprivation.
If the person taking the money held a position of trust (like a former power of attorney or an improperly acting executor), a claim for breach of fiduciary duty may apply. This duty requires acting loyally and carefully for another’s benefit; misappropriating estate funds violates this duty. A successful claim can result in a court order for repayment and potentially other damages.
Investigations
When unauthorized withdrawals are suspected, an investigation often follows, typically initiated by the estate’s personal representative, a beneficiary, or the bank itself upon noticing irregularities. Banks usually freeze accounts upon notification of death pending legal authorization.
Investigators, potentially including law enforcement, forensic accountants, or bank personnel, gather evidence like bank statements, withdrawal slips, and transaction histories. They look for discrepancies or unusual activity, especially around the time of death. Interviews with bank staff, family members, or others with access to financial information may occur. Forensic analysis might trace funds or examine digital footprints from online access.
Financial institutions cooperate by securing accounts and providing records under legal processes like subpoenas. Banks might also file Suspicious Activity Reports (SARs) if they suspect illicit activity related to a deceased person’s account, potentially alerting authorities.3Financial Crimes Enforcement Network. Suspicious Activity Report Supporting Documentation The investigation aims to establish the facts surrounding the movement of funds.
Aggravating Factors
Certain circumstances can increase the perceived severity of taking funds from a deceased’s account. A significant factor is a pre-existing relationship of trust, such as if the person was a power of attorney holder, caregiver, or improperly acting executor nominee. Abusing such a position is viewed seriously.
The amount of money taken, while determining the basic charge level, can also be an aggravating factor if particularly large, indicating greater harm and disregard for property rights.
Sophisticated methods used to access funds, involving extensive planning, deception, forgery, or complex schemes to hide the theft, suggest greater culpability than simple opportunistic acts.
The vulnerability of the beneficiaries who ultimately lose out can be considered. If heirs are minors, elderly, disabled, or financially precarious, knowingly depriving them may be seen as more severe. A pattern of repeated withdrawals over time might also be viewed more seriously than a single incident.
When to Consult an Attorney
Navigating the financial aspects after a death requires careful attention to legal procedures. Seeking legal counsel is advisable in several situations involving a deceased person’s bank account. If accused of improperly taking funds, an attorney can explain your rights and the specifics of the allegations.
If you are the personal representative of an estate and discover missing funds, consulting an attorney is crucial. You have a legal duty to protect estate assets, and a lawyer specializing in estate administration can advise on recovering misappropriated funds, potentially through legal action, ensuring you fulfill your obligations.
Beneficiaries who suspect funds were improperly taken, particularly if the personal representative seems inactive, should also consider legal advice. An attorney can clarify beneficiaries’ rights, review estate accountings, and help address concerns about estate management or potential breaches of duty.
Legal consultation can also be beneficial even in seemingly straightforward situations. Questions about payable-on-death designations, joint accounts, or the correct procedures for accessing funds before a representative is formally appointed can arise. Banks require specific legal documents (like Letters Testamentary or Letters of Administration) before releasing funds. An attorney can help navigate these requirements and ensure compliance with state law, preventing errors during a difficult time.
