First, with respect to an account solely owned by the decedent, a bank may pay or certify checks drawn on the account no more than ten days after the date of the decedent’s death, unless ordered to stop payment sooner by a person claiming an interest in the account. If the bank does not learn of the customer’s death until more than ten days have passed since the customer’s death, the account should be frozen as soon as the bank receives notice of the death.

Following the death of the customer and the freezing of the account, the bank should wait until a representative of the customer’s estate comes forward to conduct transactions on the account or to close the account. If no duly authorized estate representative comes forward, the account will become unclaimed property after two years pass from the last indication of interest by the decedent.

Regarding joint accounts, the account’s funds automatically pass to the surviving joint owner upon the death of the deceased joint owner. Assuming that your bank’s account agreement establishes a joint account with rights of survivorship, upon confirmation of the death (such as receipt of a death certificate copy), your bank may remove the deceased owner from the account. After doing this, you should list the surviving owner as the account holder for tax reporting purposes to avoid improperly reporting interest to the IRS under the decedent’s SSN.

We note that your question also references receiving “final disbursements” apparently made into the account after the death of the accountholder. In the case of a joint account with rights of survivorship, no “disbursements” from government agencies, retirement accounts, or other sources of income attributable to the decedent should be deposited into the joint account, since that account is no longer owned by the decedent (or the estate).

For resources related to our guidance, please see:

• Uniform Commercial Code, 810 ILCS 5/4-405(b) (“Even with knowledge [of a customer’s death], a bank may for 10 days after the date of death pay or certify checks drawn on or before that date unless ordered to stop payment by a person claiming an interest in the account.”)

• Joint Tenancy Act, 765 ILCS 1005/2(a) (“When a deposit in any bank or trust company transacting business in this State has been made or shall hereafter be made in the names of 2 or more persons payable to them when the account is opened or thereafter, the deposit or any part thereof or any interest or dividend thereon may be paid to any one of those persons whether the other or others be living or not, and when an agreement permitting such payment is signed by all those persons at the time the account is opened or thereafter the receipt or acquittance of the person so paid shall be valid and sufficient discharge from all parties to the bank for any payments so made.”)

• IRS Publication 550, SSN for Joint Account (“If the funds in a joint account belong to one person, list that person’s name first on the account and give that person’s SSN to the payer. (For information on who owns the funds in a joint account, see Joint accounts, later.) If the joint account contains combined funds, give the SSN of the person whose name is listed first on the account. This is because only one name and SSN can be shown on Form 1099.”)

• Illinois RUUPA, 765 ILCS 1026/15-201 (“Notwithstanding anything to the contrary in this Section 15-201, and subject to Section 15-210, a deceased owner cannot indicate interest in his or her property. If the owner is deceased and the abandonment period for the owner’s property specified in this Section 15-201 is greater than 2 years, then the property, other than an amount owed by an insurance company on a life or endowment insurance policy or an annuity contract that has matured or terminated, shall instead be presumed abandoned 2 years from the date of the owner’s last indication of interest in the property.”)