Disclaimer: This article provides educational information only. It does not constitute legal advice. Consult a California attorney to discuss your specific situation.
Detailed Answer
Under California law, a personal representative—often called an executor or administrator—must collect, manage, and distribute estate assets under a strict fiduciary duty. Establishing a separate estate account is a key step to meet this duty.
Why Open an Estate Account?
- Asset separation: Probate Code §16002 requires fiduciaries to keep estate property separate from personal property (Prob. Code §16002).
- Transparency: A dedicated account creates an audit trail for deposits and disbursements, aiding court oversight and beneficiary trust.
- Bank requirements: Financial institutions typically require certified letters testamentary or letters of administration before opening a fiduciary account.
Statutory Authority
Probate Code §8502 allows deposit of estate funds into California trust accounts or government securities (Prob. Code §8502). Letters testamentary or administration under Probate Code §8000 provide the authority you need (Prob. Code §8000).
Steps to Open an Estate Account
- Obtain certified letters testamentary or letters of administration from the probate court.
- Select a bank or credit union that offers fiduciary or trust accounts.
- Present certified court documents, personal identification, and the estate’s taxpayer identification number.
- Deposit all estate funds promptly and record the opening balance.
- Use the estate account exclusively for estate transactions.
Consequences of Commingling Funds
Mixing personal and estate funds can lead to court intervention, removal as a personal representative, and financial liability. Probate Code §286 authorizes courts to surcharge fiduciaries for any loss caused by mismanagement (Prob. Code §286).
Helpful Hints
- Open the estate account immediately after receiving court authority.
- Maintain a separate checkbook and debit card for estate transactions.
- Keep detailed records: ledgers, receipts, and bank statements.
- Provide periodic accountings to beneficiaries and the court under Probate Code §10800 et seq. (Prob. Code §10800).
- Consult a probate attorney for complex estates or disputes involving beneficiaries.