Detailed answer — How to close an estate bank account and obtain the required closing statement in New Mexico
Short answer: The personal representative (executor or administrator) must collect the legal documents that give authority to act, notify the bank, pay valid debts and taxes, create a final accounting (the estate closing statement), distribute the remaining funds to beneficiaries, and then ask the bank for an official account closing statement. If the estate is supervised by the probate court, the final account and a court order approving distribution are usually required before the bank will release funds. If the estate qualifies as a small estate, New Mexico provides simplified procedures that may let you close accounts without full probate.
Who can close the account?
The person authorized to close an estate bank account is the estate’s personal representative. That is the person named in the decedent’s will (executor) or the person appointed by the probate court (administrator). Banks will want to see proof of authority: usually a certified copy of Letters Testamentary or Letters of Administration, or a written court order. If there is a payable-on-death (POD) or transfer-on-death (TOD) beneficiary or a joint owner with rights of survivorship, the bank may transfer the funds directly to that person outside of probate.
Step-by-step process
- Gather documents showing your authority: Certified Letters Testamentary or Letters of Administration from the probate court or the decedent’s will if the account is payable to the surviving beneficiary outside probate. Also bring a certified copy of the death certificate and photo ID for the representative.
- Open an estate account (if required): Many banks require you to move assets from the decedent’s individual account into an estate or fiduciary account before paying claims and distributing funds. To open that account you will often need the court documents and an Employer Identification Number (EIN) for the estate from the IRS. Apply online for an EIN: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
- Notify the bank: Contact the bank’s estate/fiduciary department, provide certified Letters and the death certificate, and ask about the bank’s requirements for closing the account and for the bank’s final closing statement or account history.
- Collect information and preserve records: Keep the bank statements, canceled checks, invoices, receipts, and any records of deposits and withdrawals. These records are the basis of the final accounting the personal representative must prepare.
- Pay debts, taxes, and expenses: Before distributing estate funds, valid creditor claims, estate administration expenses, and outstanding taxes must be paid or reserved for. If the estate is supervised by the court you will usually file an inventory and then a final account showing how debts and expenses were handled.
- Prepare a final accounting (closing statement): The final accounting shows the estate’s opening balance, all income received, all expenses and debts paid, distributions to beneficiaries, and the ending balance (usually zero after distribution). If the estate is supervised by the court, the personal representative files the final account with the court and seeks approval. The court’s approval or signed order is often required for the bank to accept the closing signature and to release funds.
- Get the bank’s official closing statement: After the account is closed, ask the bank for a bank-issued closing statement or a final account history showing dates, transactions, and a zero balance. Banks will often provide a formal “estate account closing letter” or a final account statement upon request. Keep the bank’s closing statement with the estate records and, if required, file it with the court.
- File any required court documents: In supervised estates, file the final account and request an order approving distribution. The court’s signed order is often the last step the bank needs if there was a dispute or if the account had multiple claimants or co-representatives.
Special situations to watch for
- Joint accounts and POD/TOD beneficiaries: If a joint owner survives the decedent or there is a named POD/TOD beneficiary, the bank usually transfers the funds directly to that person without probate. The bank will still want proof of death and may request a certified death certificate.
- Small estate procedures: New Mexico law provides simplified ways to collect and distribute assets when the estate is small. These procedures may allow you to close accounts using forms or affidavits rather than full probate. Check New Mexico Courts self-help pages or consult the probate clerk about small estate limits and forms: https://www.nmcourts.gov/self-help/probate/
- Creditors and notice periods: Before final distribution, allow for creditor claims. If the estate is being probated, you typically must follow the court’s creditor-notice rules and timelines before final distribution and closing the account.
- Multiple personal representatives: If there are co-personal representatives, the bank may require signatures from all who are authorized by the court.
Where to find New Mexico forms and guidance
New Mexico Courts provide probate guides, forms, and instructions for filing inventory, final account, and petitions. See the New Mexico Courts probate/self-help section for forms and local guidance: https://www.nmcourts.gov/self-help/probate/
For the statutory framework, New Mexico’s probate rules are part of the New Mexico Probate Code (NMSA Chapter 45). The New Mexico Legislature website is a resource for statutory text and legislative information: https://www.nmlegis.gov/
Practical timeline and tips
- Expect banks to take a few days to verify documents; bring certified court documents where possible.
- Get an EIN early if the estate will have ongoing financial activity (paying bills, collecting income) — the bank may require it to open an estate account.
- Keep a detailed accounting from day one to speed final accounting and response to beneficiaries or the court.
- Ask the bank in writing for a formal closing statement and confirm whether they will provide copies for the court and beneficiaries.
When you should get a lawyer
If creditors dispute claims, beneficiaries contest the distribution, the estate owes taxes, or the estate is complex (real estate, business interests, or out-of-state assets), consider consulting a probate attorney. An attorney can prepare the required court filings, draft the final account, and help obtain a court order approving distribution if needed.
Key New Mexico resources
- New Mexico Courts — Probate self-help and forms: https://www.nmcourts.gov/self-help/probate/
- New Mexico Legislature — statutes and legislative information: https://www.nmlegis.gov/
- IRS — apply for an estate EIN: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
Disclaimer: This article explains general New Mexico probate procedures and common bank practices. It is educational only and is not legal advice. For advice about a specific estate or your exact legal duties, consult a licensed attorney in New Mexico or contact the probate clerk in the county where the decedent lived.
Helpful Hints
- Bring certified Letters and an original certified death certificate when you visit the bank.
- Ask the bank what exact documentation they require for estate account closure and whether they will accept sealed court documents or certified copies.
- Request an official bank-issued closing statement in writing and keep multiple copies for estate records and the court filing.
- Open an estate (fiduciary) account for ongoing estate business; keep the estate’s funds separate from personal funds.
- Prepare a clear final accounting with receipts, bank statements, and a distribution schedule — this speeds court approval and prevents disputes.
- If the estate is small, ask the probate clerk about affidavit procedures that may avoid full probate.
- Keep beneficiaries informed: providing a copy of the final accounting and bank closing statement can reduce misunderstandings.