Is it legal for a bank to withhold funds in the account of a deceased in order to apply it to other accounts?

UPDATED: Sep 20, 2014

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Is it legal for a bank to withhold funds in the account of a deceased in order to apply it to other accounts?

My dad passed and I am listed to receive his money out of his account. However, the bank said that it had the legal right to keep the money and apply it to other accounts he had with the bank. Is it legal for them to receive it?

Asked on September 20, 2014 under Bankruptcy Law, Georgia


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

They most likely can do this. You need to check the various account agreements, terms of service, etc. your father had with the bank, but those agreements not infrequently state that the bank may use funds in any account posed by the account holder to pay any amounts the account holder owes but did not pay in relation to other accounts. If he signed anything giving the bank this right, or the more general right to withhold funds to address deficiencies or arrears, they can do this.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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