Why Do You Need an Estate Account? Here’s What Every Executor Should Know

If you’re handling a loved one’s estate, one of the first questions that comes up is, “Why do I need an estate account?”

It’s a question we hear all the time.

I’m Brad from Probate Resource. We’re a real estate solutions company that specializes in probate and inherited properties. We buy houses for cash, and we also work with a hand-picked network of real estate agents across the country who specialize in probate and inheritance real estate.

To help answer this question, I sat down with Mike, an attorney I’ve worked with on many probate transactions here in Atlanta.

Why Does an Estate Need an Estate Bank Account?

According to Mike, it starts with understanding how probate works.

The two most common probate situations are:

• Someone passes away with a will (known as testate).
• Someone passes away without a will (known as intestate).

In either case, someone is appointed to handle the estate.

If there’s a will, that person is usually the executor. If there isn’t a will, the court appoints an administrator.

Here’s the important part: any money received on behalf of the estate doesn’t belong to the executor or administrator personally. They’re simply acting as the representative of the estate.

Because of that, they have what’s called a fiduciary duty to properly manage those funds.

An estate account keeps the estate’s money completely separate from personal finances. It protects the executor or administrator while also giving the court a clear way to ensure that estate assets are handled fairly and ethically.

In other words, it keeps the waters from getting muddy.

Instead of depositing proceeds into a personal bank account, all funds go into the estate account. From there, any legitimate estate expenses, debts, or bills are paid directly from that account.

Why Estate Sale Proceeds Can’t Be Paid Directly to an Heir

One thing we always try to explain before closing is whether the estate account has already been set up.

If it hasn’t, it can delay the process.

When an estate property sells, the proceeds can’t simply be wired directly to an individual—even if there’s only one heir.

The check or wire has to be made payable to the estate, which means those funds must first go into the estate account.

Only after the estate’s obligations have been handled can the remaining money be distributed to the heirs.

In some cases, creditors must be paid before beneficiaries receive any inheritance, which is another reason the estate account is so important.

Selling an Inherited Property?

If you’re preparing to sell a probate or inherited property, it’s a good idea to make sure your estate account is already in place before closing. It helps keep the transaction moving smoothly and avoids unnecessary delays.

Whether you’re looking for a fast cash offer or want to maximize your sale price with a probate-experienced real estate agent, we’re happy to help you explore your options, simply fill out the form below and we will connect with you ⬇️⬇️⬇️

What Do You Need to Set Up an Estate Account?

The good news is that setting up an estate account is usually straightforward.

First, you’ll need to obtain an Employer Identification Number (EIN) from the IRS.

You’ll also need your probate court documents showing that you’ve been appointed as the estate’s representative.

With those two items, most banks can open an estate bank account for you.

I’ve also created another video that walks through how to obtain an EIN if you need additional guidance.

Need Help Selling a Probate Property?

If you have an inherited property that needs to be sold, we’d be glad to help.

If speed and convenience are your priority, we buy probate properties for cash and can provide a straightforward cash offer.

If you’d rather list the property and try to maximize every dollar, we also have a hand-picked network of real estate agents across the country who specialize in probate and inheritance sales. They understand the unique challenges of probate and can guide you through the process.

Fill out the contact form, or give us a call. A member of our team will be happy to discuss your situation, answer your questions, and help determine whether we’re the right fit for your needs.