Detailed Answer
This section explains what typically happens when an heir withdraws money from a deceased parent’s bank account or runs charges on the parent’s credit card after the parent has died, and whether the estate can recover those funds under New Jersey law. This is an explanation of common legal principles, not legal advice.
Who owns the money immediately after death?
When a person dies, money in accounts that are in the deceased person’s sole name generally becomes an asset of the deceased person’s estate. The estate’s personal representative (executor or administrator) is responsible for gathering those assets, paying valid debts and expenses, and distributing the remainder to beneficiaries under the will or by intestacy rules. If an account is jointly owned with right of survivorship, or if it names a payable-on-death (POD) or transfer-on-death (TOD) beneficiary, the funds typically pass directly to the joint owner or beneficiary and are not part of the probate estate.
When a withdrawal or charge after death is unauthorized
If an heir withdraws money or uses a credit card after the account owner died and the account belonged to the deceased alone (and no surviving joint owner or valid beneficiary exists), the withdrawal or charge is usually unauthorized. Under these circumstances, the action can be treated as conversion or unjust enrichment. The estate (through the personal representative) can demand return of the funds. If the heir refuses, the personal representative can sue the heir in civil court to recover the money.
Common legal routes to recover money in New Jersey
- Civil claim for conversion or unjust enrichment. The personal representative may bring a civil lawsuit to recover funds taken without authorization. New Jersey recognizes causes of action for wrongful taking of property and for unjust enrichment when someone benefits at the expense of another without legal justification.
- Claims brought as part of probate administration. During estate administration, the personal representative has a duty to collect estate assets. If they discover improper withdrawals, they can pursue recovery as part of their fiduciary duties. New Jersey’s probate and estate administration framework governs the personal representative’s powers and duties. For more about New Jersey probate practice and the role of the personal representative, see the New Jersey Courts resources: https://www.njcourts.gov/ and the New Jersey Legislature site for statutes: https://www.njleg.state.nj.us/ (see Title 3B – Probate and Fiduciary Matters).
- Criminal prosecution in some situations. If the taking appears intentional and fraudulent, criminal charges (such as theft) may be possible. Criminal law is a separate path and prosecutors may charge someone who knowingly stole estate funds. New Jersey’s criminal statutes and local prosecutors’ offices govern these charges (New Jersey statutes are available at https://www.njleg.state.nj.us/).
Special account types and credit-card rules
- Joint accounts with right of survivorship: Surviving joint owners typically become the sole owners automatically. Those funds are not estate property unless the account was set up differently.
- POD/TOD accounts and named beneficiaries: These pass directly to the named beneficiary and generally avoid probate.
- Credit cards: If a card is in the deceased’s sole name, the issuer will usually cancel the account when they learn of the death. Unauthorized charges after death can be disputed with the issuer, and the estate may have a claim to recover unauthorized charges. If someone used the card with permission before death or was a joint account holder, liability rules differ.
Timing and limitation periods
New Jersey sets deadlines for bringing civil claims. Many civil claims (including many tort and contract claims) must be filed within a statutory period — commonly six years for many actions at law under New Jersey’s limitation rules. The exact statute of limitations depends on the theory of recovery (conversion, unjust enrichment, fraud, etc.). To locate applicable statutes and exact time limits, consult New Jersey law resources at https://www.njleg.state.nj.us/ and consider speaking with a probate attorney promptly so time limits do not bar recovery.
Who sues — and who pays?
The estate’s personal representative sues on behalf of the estate. If recovery is successful, the money belongs to the estate and is used to pay debts and be distributed to beneficiaries. If a beneficiary took funds improperly, the recovery may reduce what that person would otherwise inherit. In some cases, courts may also award interest, costs, or fees against the person who took the funds.
Practical considerations
- Prove the taking: bank statements, date/time stamps, witness statements, and the account title will matter.
- Know the account type: whether the account was sole, joint, or payable-on-death determines who has a legal right to the money.
- Act quickly: freeze accounts where possible, and begin probate steps so the personal representative can act.
Helpful Hints — Practical Steps to Protect the Estate and Recover Funds
- Notify the bank and card issuers immediately. Ask the bank to freeze the account and flag suspicious transactions. Provide a death certificate when requested.
- Identify whether accounts are joint or have beneficiaries. Look for account titles (joint tenants, POD, TOD) and beneficiary designations; they often determine ownership outside probate.
- Collect and preserve records. Save bank statements, ATM receipts, credit-card billing statements and any text/email evidence about authorizations or permission.
- Contact the personal representative or the person handling the estate. If you are not the personal representative, notify them promptly so they can take legal steps.
- Make a written demand for return of funds. A formal demand letter from the personal representative or the estate attorney sometimes resolves the matter without court action.
- Consider small-claims court for smaller amounts. For modest sums, the estate (via personal representative) might use small-claims procedures for faster resolution.
- Preserve evidence of intent. If the withdrawal was intentional and deceptive, keep all communications and records showing the nature of the act — they matter for civil claims and potential criminal referral.
- Talk to a probate or civil attorney early. A lawyer can explain timelines, prepare demand letters, and file suit if needed.
Where to look for New Jersey-specific law and practice guides
- New Jersey Legislature (statutes, including probate and criminal law): https://www.njleg.state.nj.us/
- New Jersey Courts (probate and estate administration information for the public): https://www.njcourts.gov/
Next steps: If you are the personal representative, start the probate process as soon as possible. If you are a relative or beneficiary concerned about unauthorized withdrawals, gather documents, notify the personal representative, and consider getting legal advice so the estate can evaluate civil recovery or a criminal complaint.
Disclaimer: This article explains general legal principles under New Jersey law for educational purposes only. It is not legal advice, and it does not create an attorney-client relationship. For advice about a specific situation, consult a licensed New Jersey probate/estate attorney.