Can an estate recover money an heir withdrew from a deceased parent’s bank account or credit card?
Brief disclaimer: This is general information, not legal advice. I am not a lawyer. For legal advice about a specific situation, consult a licensed Oregon attorney.
Detailed answer — what typically happens under Oregon law
When a person dies, most of the assets that belonged to them become part of their estate unless the asset has a named beneficiary or is jointly owned with a right of survivorship. Money taken from the decedent’s bank account or charges run on the decedent’s credit cards after death are usually treated as estate property. If an heir (or anyone else) withdraws funds or uses credit cards after the account holder’s death and the withdrawal or charges are not authorized by law, the estate can try to recover those amounts through civil or sometimes criminal remedies.
Who owns the account funds after death?
- If the account was a payable-on-death (POD) or had a designated beneficiary, the funds generally pass to that beneficiary outside probate.
- If the account was a true joint account with right of survivorship, the surviving joint owner may lawfully get the funds.
- If the account was solely in the decedent’s name and no beneficiary or survivorship right applies, the funds belong to the decedent’s estate and are administered through probate or a small-estate process.
When an heir withdraws money after death
If an heir withdraws funds and does not have a legal right to them, that action is often treated as wrongful taking (civil conversion) or unjust enrichment. Possible consequences include:
- Civil recovery by the personal representative (executor) or by heirs through a probate action: the court can order the person to return the money, pay the value plus interest, and sometimes cover court costs and attorneys’ fees.
- Imposition of a constructive trust: the court can declare that the person holds the withdrawn funds in trust for the estate and must transfer them to the estate.
- Criminal investigation and charges: in some cases the state may pursue theft or related offenses under Oregon criminal statutes.
- If the person who withdrew the funds is the appointed personal representative and misused estate assets, the probate court can remove them, surcharge them (require repayment with interest), and take other remedial steps.
Bank and credit card responses
After learning of a death, banks and card companies commonly freeze accounts and require certain paperwork (death certificate, letters of administration or appointment of personal representative) before releasing funds. If a bank paid out on a forged signature or allowed an improper withdrawal, the bank may reverse transactions or have procedures to dispute those withdrawals. Credit card companies will investigate unauthorized charges and may reverse charges if they find them not authorized by the cardholder.
Who can sue to recover funds?
Typically the decedent’s personal representative (executor or administrator) brings claims on behalf of the estate during probate. If no probate has been opened yet, an interested person (an heir or creditor) can petition the probate court to appoint a personal representative. In some small-value situations, a person may bring a small-claims action after appointment of a representative, or an individual heir might sue directly for conversion if the law allows.
Relevant Oregon law resources
- Oregon Revised Statutes — probate and estate rules (see the Oregon Legislature’s ORS pages for chapters on probate and succession): https://www.oregonlegislature.gov/bills_laws/Pages/ORS.aspx
- Oregon statutes on crimes (theft and related offenses), which could apply to wrongful post-death withdrawals: https://www.oregonlegislature.gov/bills_laws/ors/ors164.html
- Oregon Judicial Branch information about probate, appointment of personal representative, and estate administration: https://www.courts.oregon.gov/programs/probate/pages/default.aspx
Practical example (hypothetical)
Suppose a parent dies leaving a sole bank account in their name with $20,000. The parent did not name a POD beneficiary and the account had no co-owner. An adult child sees the death notice, goes to the bank, and withdraws $8,000. The family later opens probate and appoints a personal representative. The personal representative discovers the withdrawal. What can they do?
- Document the withdrawal: bank statements and details about when and how the money was taken.
- Ask the bank for its records and whether it can reverse the transaction (banks sometimes can reverse or place holds pending resolution).
- Demand repayment in writing from the person who withdrew the funds.
- If the person refuses, the personal representative can file a petition in probate court asking the court to order repayment, impose a constructive trust, or otherwise restore estate assets.
- Depending on the facts, the personal representative could also refer the matter to law enforcement for a criminal investigation.
Times to act and practical tips
Take prompt action. Banks and card companies move quickly. Evidence (statements, withdrawal slips, receipts, surveillance footage) may be lost if you delay. The longer the estate remains unsettled, the harder recovery can be.
Helpful Hints
- Preserve evidence: save bank and credit-card statements, photographs of transaction receipts, emails, and messages relating to the withdrawal.
- Notify institutions quickly: inform the bank, credit card issuer, and other institutions about the decedent’s death and provide a death certificate. Ask the bank to freeze the account until the estate is administered.
- Check account ownership and beneficiary designations: determine whether the account was POD or joint; that affects who has a lawful claim to the funds.
- Appoint a personal representative: if no one is appointed, petition the probate court as soon as possible. Only the representative usually has the authority to bring estate claims.
- Demand repayment in writing first: a formal written demand creates a record and sometimes leads to voluntary repayment without court intervention.
- Consider both civil and criminal options: civil claims (conversion, unjust enrichment, constructive trust) commonly recover estate funds. Criminal theft charges may be appropriate in clear cases of intentional wrongful taking.
- Talk to an Oregon probate attorney: a lawyer can explain procedural requirements, file the proper petitions, and advise whether to pursue criminal referral.
- Small-amount options: if the amount taken is small, a small-claims action (after appointment of a personal representative) or settlement demands can be faster and less costly than full probate litigation.
Final summary
Money withdrawn from a deceased person’s account after death generally belongs to the estate unless a valid beneficiary designation or joint ownership lawfully transferred it. If an heir withdraws funds without legal authority, the estate — through its personal representative — can seek recovery through bank procedures, probate court remedies, civil claims like conversion or constructive trust, and possibly criminal charges. Act quickly and collect documentation. For guidance specific to your situation, consult a licensed Oregon probate attorney.
Again, this is general information and not legal advice. Contact a licensed attorney to discuss the facts and legal options in your case.