Pre-Arranged Payments – Simple Solution

It seems like there should be a simple solution, but often the simplest solutions have the most complex ramifications and pitfalls. In this blog, I review two posts from Reddit about different options to make sure critical transfers or payments from an account will continue even after death. But can it be done without involving the probate court and its complicated processes?

Can you set up pre-arranged payments that will happen even after you have passed on? The question sounds pretty simple, but the answer really isn’t.

Can you leave post-debt instructions with a bank?

Can a person instruct a bank to still honor pre-arranged auto payments upon their death? For instance, suppose someone arranged a one-time payment to be made on a specific date and then died before that date. If the bank learns of their death prior to payment, would such pre-death instructions guarantee payment without the involvement of an executor?

To clarify, do auto pay debits still pay out after someone dies? Does the bank freeze the account and not make the payment, or is it considered a prior debit and be honored?

It is a lot more complicated question. It sounds like the person wants to avoid court complications and that’s smart. The reason is you can’t just have an executor walk in and say here’s the will, I’m the executor, go ahead and do this auto payment.

Wait a minute. We don’t know you are the executor, you’re just named in the will. The Court hasn’t approved you. You need to go and file the application with the court and get the letters testamentary. Then when you bring it down to us we can follow instructions. But the way it is really going to have to work is your going to have to set up an estate account, move the money into the estate account, and then you can authorize payment…

Now suddenly it is this HUGE thing. The fact is when someone dies and there is an account in their name, banks are just going to freeze the account. They don’t want to end up having money paid out for someone who dies because the account could have been hacked, there could be some fraud going on, it could be family members, and on and on.