Detailed Answer
Under Texas law, a personal representative (sometimes called an executor or administrator) must separate estate funds from personal funds. Opening a dedicated estate bank account helps you track money, fulfill fiduciary duties and comply with court requirements.
Texas Estates Code §402.003 requires a personal representative to deposit estate money into an interest-bearing account or as the court orders. You open this account using your letters testamentary or letters of administration, a certified copy of the death certificate and the estate’s taxpayer ID number. Label the account “Estate of [Decedent’s Name], Deceased” to avoid commingling.
Texas Estates Code §401.003 mandates clear recordkeeping. Keeping all receipts and bank statements in the estate account makes preparing inventories, accountings and final distributions easier. If you mix personal and estate funds, beneficiaries may challenge your administration and the court may remove you or require extra bonds.
By maintaining a separate estate account, you streamline bill payments, creditor claims and distributions to heirs. You also reduce your personal liability if questions arise about how funds moved in and out of the estate.
Key Statutes:
Texas Estates Code §402.003 (Deposit of estate funds)
Texas Estates Code §401.003 (Records to be kept by personal representative)
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified probate attorney in Texas for advice on your specific situation.
Helpful Hints
- Obtain certified letters testamentary or letters of administration from the probate court before visiting the bank.
- Use the estate’s federal taxpayer identification number (EIN), not your personal Social Security number.
- Label the account “Estate of [Decedent’s Name], Deceased” to prevent commingling.
- Choose an interest-bearing account to maximize returns for beneficiaries.
- Keep original bank statements and digital backups for your final accounting.
- Pay funeral expenses, taxes and valid creditor claims only from the estate account.
- Notify beneficiaries and the court before making large distributions from the account.
- Consult a probate attorney or CPA if you have questions about investments or tax reporting.