Detailed Answer: Opening an Estate Account in Alaska
As a personal representative (sometimes called an executor or administrator), you handle an estate’s assets and debts. One of your first duties is to open a separate estate bank account. This account holds all estate funds—income, sale proceeds, dividends, and cash—separate from your personal finances. Keeping estate funds distinct protects you and beneficiaries, ensures accurate accounting, and complies with Alaska law.
Why You Need a Separate Estate Account
- Protects your personal assets from estate liabilities.
- Prevents commingling, which can lead to personal liability or court sanctions.
- Facilitates clear, traceable records for beneficiaries and the court.
- Allows the estate to earn any bank interest owed to beneficiaries.
Alaska Law Requirements
Alaska Statute 13.16.020(d) mandates that you “keep estate property separate from all other property and maintain complete records of all dealings.” Additionally, Alaska Probate Rule 9 requires fiduciaries to deposit funds in a qualified financial institution within 30 days and to obtain court approval for investments outside standard bank accounts.
Steps to Open and Maintain the Account
- Obtain letters testamentary or letters of administration from the probate court.
- Get an Employer Identification Number (EIN) for the estate from the IRS.
- Choose a bank that handles fiduciary accounts and meets court requirements.
- Open the account in the estate’s name (e.g., “Estate of Jane Doe, John Smith, Personal Representative”).
- Deposit all estate receipts promptly and pay estate expenses exclusively from this account.
- Keep detailed records of every transaction and save all bank statements.
Helpful Hints
- Use accounting software or a spreadsheet to track deposits, payments, and fees.
- Retain receipts for funeral expenses, taxes, and creditor payments.
- Reconcile the account monthly to catch errors early.
- Communicate regularly with beneficiaries about account activity.
- Seek court guidance before making any non-routine investments.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified Alaska attorney for advice tailored to your situation.