How Can You Avoid Your Parents' Bank Accounts Getting Frozen After They’re Gone?

Failing to plan ahead can leave you struggling to access your parents' funds when you need them most.

A legally documented will is essential to prevent bank accounts from being frozen.

Without a will, banks are required to freeze the deceased’s accounts until legal procedures are completed.

This process can take months or even years, delaying access to necessary funds for funeral expenses or debts. Encourage your parents to prepare a valid will that clearly outlines their wishes.

The Prophet ﷺ said:

"It is not right for a Muslim who has something to bequeath to stay for two nights without having his will written and kept ready with him." (Bukhari, 2738)

Having a will simplifies inheritance matters and expedites the process.

An LPA allows financial decisions to be made in case of incapacity.

If your parents become unable to manage their finances due to illness or old age, an LPA gives a trusted person the authority to handle their accounts. Without it, even simple transactions could require lengthy legal intervention.

An LPA ensures financial matters can be managed smoothly during difficult times.

Joint accounts can provide immediate access to funds upon a parent's passing.

If your parents add a trusted child to their bank account as a joint holder, the surviving account holder can continue accessing the funds without legal obstacles.

For instance, DBS Bank allows the remaining balance in a joint account to be released to the surviving account holder upon presentation of the death certificate.

However, this should be done with transparency and fairness to avoid family disputes.

Joint accounts can be a practical solution, but it's crucial to understand the legal implications and ensure all parties are in agreement.

Ensure CPF savings are distributed without complications.

In Singapore, the Central Provident Fund (CPF) allows members to nominate beneficiaries to receive their CPF savings upon their demise. Without a nomination, CPF savings will be distributed by the Public Trustee according to intestacy laws, which may not align with your parents' wishes. Encourage your parents to make a CPF nomination to ensure their savings are allocated as intended.

A CPF nomination provides clarity and peace of mind for your family.

Keeping a clear record of all bank accounts prevents unnecessary delays.

Many families struggle to locate important financial documents after a loved one’s passing. Work with your parents to compile a list of all their bank accounts, insurance policies, and financial assets in a secure place that trusted family members can access.

Organized records save time and reduce stress during critical moments.

Wallahu a’lam,

A servant hoping for Allah's forgiveness,
Edited by Shahib Amin