South Dakota: Can an estate recover money an heir withdrew from a parent’s bank account or credit cards after death?

The information on this site is for general informational purposes only, may be outdated, and is not legal advice; do not rely on it without consulting your own attorney. See full disclaimer.

Detailed Answer

Short answer: Under South Dakota law, money taken from a deceased person’s bank account or charges run on that person’s credit cards after death generally belong to the decedent’s estate unless the account or card had a valid non‑probate beneficiary (for example, a surviving joint owner with right of survivorship or a named payable‑on‑death payee). If an heir withdraws funds or incurs charges after the owner dies and the money should have become estate property, the personal representative (the executor or administrator) can usually demand return of the funds, ask the bank to reverse transactions, and, if needed, sue the person for return (civil conversion/turnover) or seek other remedies through probate court. Criminal charges are also possible in serious cases.

Why this matters: When someone dies, their assets generally become part of their estate and must be gathered and administered by a personal representative to pay debts and distribute remaining assets according to the will or South Dakota intestacy law (see South Dakota Codified Laws, Title 29A for probate rules: https://sdlegislature.gov/Statutes/Title/29A). Funds removed without authority can interfere with the estate’s ability to pay debts and distribute assets fairly.

Step‑by‑step overview of what the estate (through the personal representative) can do

  • Confirm ownership and beneficiary designations. Check account titles, signatures, and beneficiary/POD designations and any account agreements. Joint accounts with rights of survivorship and properly named POD beneficiaries typically pass outside probate to the surviving owner or beneficiary.
  • Freeze or restrict accounts promptly. If the bank has not already released funds, a personal representative or an interested heir should provide a death certificate and ask the bank to freeze the account(s). Banks often have procedures for handling accounts after a customer dies.
  • Demand return and reversal. If an heir withdrew money after death, the personal representative should send a written demand for return and ask the bank to reverse unauthorized withdrawals or unauthorized credit‑card charges. Banks sometimes reverse post‑death transactions if notified quickly.
  • Use probate turnover and civil remedies. The personal representative can petition the probate court for turnover of estate assets. The estate can also bring civil claims (for example, conversion or unjust enrichment) to recover funds taken without authorization.
  • Consider criminal referral. If funds were knowingly stolen, the personal representative may refer the matter to law enforcement. Criminal theft or fraud charges are separate from civil recovery and depend on prosecutors’ decisions.
  • Document everything and act fast. Preserve bank statements, transaction details, communication, and the death certificate. Time is important: banks may have limited windows to reverse transactions, and statutes or probate deadlines can limit remedies.

How common scenarios are treated

  • Sole account in the decedent’s name: Funds belong to the estate. A withdrawal after death is typically unauthorized. The personal representative can demand return and sue for conversion or turnover through probate.
  • Joint account with surviving co‑owner (right of survivorship): Properly titled joint accounts generally pass to the surviving joint owner outside probate. If a joint owner takes all funds immediately but the account did not include survivorship rights or was manipulated, the estate may challenge the transfer.
  • POD/transfer‑on‑death designation: Funds go directly to the named beneficiary outside probate. The estate cannot recover those funds unless the designation was invalid or procured by fraud.
  • Credit card charges after death: Charges made by family members on the deceased’s card are often unauthorized. The card issuer’s contract and federal rules may allow the issuer to refuse to pay those charges; the estate is generally not responsible for individual family members’ unauthorized charges. The personal representative can dispute charges with the issuer, and the issuer may reverse them or pursue the person who ran up the charges.

Remedies and likely outcomes

The estate’s primary civil remedies are:

  • Turnover in probate: Ask the probate court to order the person who took the money to return it to the estate.
  • Civil actions: Claims such as conversion, unjust enrichment, or breach of fiduciary duty (if the person had fiduciary responsibility) can seek return of funds plus interest and possibly other damages.
  • Constructive trust or equitable remedies: If funds were taken by improper means, a court may impose a constructive trust on the money or property in the taker’s possession.

Outcomes vary: if the taking was inadvertent and the funds remain available, the person will likely be ordered to return them. If funds were spent, the estate may obtain a money judgment and try to collect, which can be harder if the taker has no assets. Criminal prosecution may be an option if the taking was intentional theft or fraud.

Timing and practical considerations

  • Act quickly: contact the bank and consider opening probate to establish the personal representative’s authority.
  • Keep records: transaction details, account statements, communications, and the death certificate matter.
  • Understand costs: lawsuits and probate take time and money. The likely size of recovery versus legal costs matters when deciding whether to litigate.
  • Talk to the bank: many banks have an estate or fiduciary department and can advise on their procedures for post‑death transactions.

Statutory framework: Probate administration and the powers and duties of personal representatives in South Dakota are governed by the Uniform Probate Code as adopted by South Dakota (see South Dakota Codified Laws, Title 29A): https://sdlegislature.gov/Statutes/Title/29A. That statutory framework sets out how assets are gathered, how claims are handled, and how a personal representative may act to collect estate property. Banks’ procedures, account agreements, and federal rules for credit cards may also affect what happens in practice.

When the bank or beneficiary disputes the estate’s claim: If the bank paid money to someone claiming rights (for example, a putative joint owner or a named POD beneficiary), the personal representative can bring a probate action to resolve ownership. If the transfer was made by fraud or false statements, state law may allow the estate to challenge the transfer and pursue recovery.

Practical example (hypothetical): A parent dies leaving $20,000 in a checking account titled in the parent’s name only. A child withdraws $6,000 two days after death and spends it. The personal representative opens probate, finds the unauthorized withdrawal, demands return, and sends the child a written demand. If the child refuses, the representative can file a turnover petition in probate or a civil suit for conversion to recover $6,000 plus interest and possible court costs. If the child cannot pay, the estate may obtain a judgment and try to collect later; criminal referral is also possible if the facts show intentional theft.


Disclaimer: This article is for general informational purposes and educational use only. It is not legal advice, and nothing here creates an attorney‑client relationship. For advice about a specific situation in South Dakota, consult a licensed attorney who handles probate and estate matters.

Helpful Hints

  • Immediately obtain several certified copies of the death certificate to present to banks and creditors.
  • Find account paperwork (titles, beneficiary/POD designations, joint account agreements) before assuming funds belong to the estate.
  • Contact the bank quickly to request a freeze or reversal of post‑death transactions; timing can make reversal easier.
  • If you are a potential personal representative, open probate promptly so you have legal authority to act and to compel turnover of assets.
  • Keep records of all communications and bank statements—these are key evidence if you must sue or involve law enforcement.
  • Evaluate costs vs. recovery: small amounts may be reclaimed more cheaply through mediation or demand letters than full litigation.
  • Consider both civil and criminal avenues if the taking appears intentional; criminal prosecution may deter wrongful behavior even when civil recovery is slow.
  • Consult an attorney early to understand deadlines, probate filing requirements, and the best forum for recovery under South Dakota law (probate court vs. civil court).

The information on this site is for general informational purposes only, may be outdated, and is not legal advice; do not rely on it without consulting your own attorney. See full disclaimer.