How to Inherit Bank Accounts in Missouri

Inheriting bank accounts in Missouri involves specific state laws, probate procedures, and potential tax considerations.

Understanding these requirements helps beneficiaries properly claim their inheritance while meeting all legal obligations.

Missouri Probate Requirements for Bank Accounts

The process for inheriting bank accounts in Missouri depends on how the account was titled. Different account structures follow different inheritance paths.

Joint Accounts with Rights of Survivorship

Joint accounts automatically pass to the surviving account holder without going through probate.

The survivor needs to provide the bank with:

• A certified death certificate
• Valid government-issued photo ID
• Completed bank inheritance forms

The bank will then transfer the account into the survivor's name, typically within 2-3 business days.

Payable on Death (POD) Accounts

POD accounts also bypass probate. The named beneficiary must present:

• The original death certificate
• Personal identification
• Proof of the POD designation
• New account information for the transfer

Most Missouri banks process POD transfers within 30 days of receiving complete documentation.

Individual Accounts Without Beneficiaries

These accounts must go through probate unless they qualify for small estate administration. Required steps include:

• Opening a probate case with the local court
• Obtaining letters testamentary or administration
• Providing court documents to the bank
• Following Missouri's creditor claim period
• Receiving court approval for distribution

Small Estate Procedures in Missouri

Missouri offers simplified procedures for estates under $40,000. This process requires:

• Filing an affidavit with the probate court
• Waiting 30 days after death
• Providing the affidavit to the bank
• Meeting all small estate criteria

The small estate process typically takes 45-60 days compared to 6-12 months for full probate.

Tax Implications for Inherited Bank Accounts

Federal Tax Considerations

Income Tax:

• Interest earned before death goes on the deceased's final tax return
• Interest earned during estate administration is estate income
• Interest earned after distribution is the beneficiary's income
• Inherited principal is not taxable income

Estate Tax:

• Federal estate tax applies to estates over $12.92 million (2024)
• Missouri has no state estate tax
• Joint accounts may be partially included in the taxable estate
• POD accounts are included in the gross estate calculation

Missouri State Tax Requirements

Missouri specific rules include:

• No inheritance tax on bank accounts
• No state estate tax since 2005
• Income tax on interest earned by Missouri residents
• Special rules for out-of-state beneficiaries

Steps to Claim Inherited Accounts

Immediate Actions

1. Obtain multiple death certificates
2. Contact all banks holding accounts
3. Determine account titling and beneficiary designations
4. Consult with a probate attorney if necessary
5. File required court documents if probate is needed

Documentation Requirements

Banks typically require:

• Original death certificate
• Court letters if probate is needed
• Tax ID numbers for the estate
• New account applications
• Identity verification of heirs
• Estate inventory forms

Managing Inherited Accounts

Immediate Considerations

• Keep detailed records of all transactions
• Maintain separate accounts for inherited funds
• Track interest income for tax purposes
• Consider consolidating multiple inherited accounts
• Review account fees and features

Long-term Planning

• Evaluate FDIC insurance coverage
• Consider investment options for larger amounts
• Plan for tax implications of earned interest
• Update your own estate planning documents
• Review beneficiary designations

Common Challenges and Solutions

Multiple Beneficiaries

When multiple heirs inherit an account:

• All beneficiaries must agree on distribution
• The bank may require joint instructions
• Separate accounts might need creation
• Communication between heirs is essential

Creditor Claims

Missouri law provides:

• A six-month creditor claim period
• Protection for certain joint accounts
• Requirements for notice to creditors
• Procedures for contesting claims

Special Situations

Out-of-State Banks

Additional steps may include:

• Working with multiple state laws
• Extended processing times
• Extra documentation requirements
• Interstate banking regulations

Business Accounts

Inheriting business accounts requires:

• Business succession documentation
• Tax ID number changes
• Signatory updates
• Business structure considerations