How an Indiana estate can respond when an heir withdraws funds from a deceased parent’s accounts

Disclaimer: This article explains general Indiana law and common steps estates use to recover improperly taken funds. It is educational only and does not constitute legal advice. Consult a licensed Indiana attorney about your specific situation.

Detailed Answer

When a parent dies, their money and property become part of the decedent’s estate. In Indiana the personal representative (also called an executor or administrator) has the legal duty to gather estate assets, pay valid debts, and distribute what remains under the will or under Indiana’s intestacy rules. See Indiana Probate Code, Title 29: https://iga.in.gov/legislative/laws/2024/ic/titles/029.

If an heir withdraws money or charges on a decedent’s bank account or credit card after death without legal authority, the estate generally can try to recover that money. The available remedies and the practical path to recovery depend on several facts:

• How the account was titled. If the bank account was a joint account with rights of survivorship or held as payable-on-death (POD) to a named beneficiary, those funds typically pass directly to the joint owner or beneficiary and are not estate assets. If the account was solely in the decedent’s name, the funds belong to the estate.
• Whether a personal representative has been appointed. Once a personal representative files paperwork and obtains letters testamentary or letters of administration, banks and others must usually deal with that representative for distribution of estate assets.
• Whether the withdrawal was authorized. Authorization can come from a will, a court order, written permission from the personal representative, or statutory allowances. Unauthorized withdrawals can be treated as conversion, unjust enrichment, or theft.

Common legal paths the estate can use in Indiana:

1. Demand and accounting. The personal representative or beneficiaries typically start by demanding return of the funds and an accounting. Banks often freeze accounts once they learn of the death, and they commonly require letters testamentary before releasing funds.
2. Civil claims. The estate can sue the person who took the money for conversion (wrongful exercise of control over property), unjust enrichment, or breach of fiduciary duty if the person had a fiduciary role. The estate may seek return of the money, interest, and sometimes attorney fees or court costs. Indiana civil procedure and remedies are governed by Title 34: https://iga.in.gov/legislative/laws/2024/ic/titles/034.
3. Probate-specific relief. If the person who took funds is a named or de facto fiduciary, the court that supervises the estate can order an accounting, surcharge the fiduciary (require repayment plus possible interest), and remove the fiduciary from office. The probate court handles disputes over estate administration under Title 29 (Probate).
4. Criminal referral. If the conduct appears to be theft or fraud (for example, knowingly using a decedent’s credit card without authority), the estate can report the conduct to law enforcement. Indiana criminal statutes that address theft and related offenses are in Title 35: https://iga.in.gov/legislative/laws/2024/ic/titles/035. A criminal conviction may help the civil case, but criminal prosecutors act in the public interest and may not pursue every dispute.
5. Quick remedies and preservation of assets. The personal representative can ask the probate court for emergency relief such as a temporary restraining order or writ of attachment to prevent further dissipation of estate assets while the court resolves the dispute.

Practical examples

Example 1: The decedent had a sole bank account. An adult child withdrew $10,000 one week after the parent’s death and spent it. The personal representative obtains appointment, demands repayment, and sues for conversion and unjust enrichment. The probate court can order the child to repay the estate and may assess interest or recovery costs.

Example 2: The decedent’s checking account named a co-owner with survivorship rights. The co-owner withdrew the money. Because the account passed directly to the co-owner by operation of law, the estate likely cannot recover those funds as estate assets—unless the co-ownership itself was fraudulent.

What evidence and documents help the estate recover funds

• Certified copy of the death certificate.
• Bank statements showing the withdrawals and account title.
• Any will, beneficiary designation, or account documentation showing joint tenancy or POD language.
• Communications or receipts showing unauthorized use (text messages, emails, eyewitness accounts).
• Letters testamentary or letters of administration once the personal representative is appointed.

Timing and practical considerations

Act promptly. Evidence disappears and statutes of limitation apply to civil claims. Banks may have already released funds to a joint owner or payee. If the person who withdrew funds spent them on third parties, recovery becomes more complicated. Even if the estate wins a judgment, collecting money can require additional steps such as garnishment or turnover proceedings.

How to start (step-by-step)

1. Notify the bank and credit card companies of the death and freeze accounts if possible.
2. If no personal representative exists, ask the probate court to appoint one and obtain letters testamentary/administration.
3. Gather documentation of the withdrawals and any account titles or beneficiary designations.
4. Send a written demand for return of funds to the person who withdrew them.
5. If the demand fails, consult an Indiana probate or civil attorney about filing a probate petition or civil suit for recovery.

Helpful Hints

• Check how the account is titled right away—joint accounts and POD designations change who owns the money.
• Get a certified death certificate early; banks usually require it before releasing funds.
• If you are the appointed personal representative, keep a written inventory of all estate assets and actions taken.
• Preserve electronic evidence (bank records, texts, social media messages) that show unauthorized withdrawals.
• Consider mediation with the heir before suing; that can be faster and less costly for modest sums.
• Remember that civil recovery and criminal prosecution are separate: a criminal case is decided by the state, not by the estate, but it can support civil claims.
• Consult an attorney early—probate timelines, document requirements, and remedies vary by county and by the precise facts.

For statutory background see Indiana Probate Code (Title 29): https://iga.in.gov/legislative/laws/2024/ic/titles/029, Indiana civil procedure and remedies (Title 34): https://iga.in.gov/legislative/laws/2024/ic/titles/034, and Indiana criminal statutes on theft and fraud (Title 35): https://iga.in.gov/legislative/laws/2024/ic/titles/035.

If you need help assessing whether funds can be recovered in your specific situation, contact a licensed Indiana probate or civil attorney to review the facts and advise on next steps.