How to deal with a family member's bank accounts and financial products in the event of their death? We answer these questions with legal basis. It is always a painful subject, but one that needs to be understood, particularly in times of pandemic, with Covid-19 having already claimed thousands of lives in Portugal. Alongside the emotional pain, many families have to deal with inheritance issues.
The death of a family member is always a difficult time in people's lives, with a strong emotional impact and obvious implications for those closest to them. However, the difficulty of the days that follow is not exclusively emotional, but also stems from problems and constraints arising from the deceased's estate, which are often unknown to the heirs.
One of the most common concerns bank balances held at financial institutions, since almost the entire population has a bank account. This article aims to alert readers to the main problems and briefly explain the procedures that should be followed.
Firstly, the deceased's family members must obtain the death certificate, usually provided by the funeral home, and request the identification of heirs, which identifies the heirs. It should be noted that it is necessary to designate the head of the family, who will administer the estate pending distribution, usually the surviving spouse or, if there is more than one heir in the same situation, e.g., two children, the eldest assumes this role, however, this criterion is not mandatory. Next, the head of the family reports the death to the competent tax office, where a tax identification number is obtained for the inheritance.
It is advisable for the head of the family to contact the Bank of Portugal to obtain information about the financial products held by the deceased. This is because there are often financial products (bank accounts and/or others) that are not known to the heirs, and the Bank of Portugal, as the entity that manages a database of financial products existing in various financial institutions, can provide this information.
To do so, they can go in person to a Banco de Portugal branch or submit the request for information by post. The following documents are required to process the request: i) civil and tax identification details of the deceased; ii) original or certified photocopy of the deed of inheritance stating the status of heir, or, alternatively, as a child, original or certified photocopy of the civil registry death certificate; iii) form available on the Banco de Portugal website entitled “Request for Information from Banco de Portugal,” completed and signed by the head of the household or their representative.
It should be noted that Banco de Portugal does not have access to information on products marketed by the Treasury and Public Debt Management Agency (IGCP), so this entity should also be contacted in order for the heirs to obtain information on savings or treasury certificates.
Once the information has been made available by the Bank of Portugal, the head of the household should go to the identified institutions, armed with those documents, and request a statement identifying the financial products and their value.
At this point, the internal procedure for communicating the death of the holder of the financial product(s) begins, and the accounts are blocked until the subsequent steps referred to below have been completed. Participation in the free transfer, using Stamp Duty Form I, with the competent tax authority, indicating the list of assets, namely with the identification of bank accounts and balances, accompanied by the statements submitted by the financial institutions and, usually, accompanied by a bank statement for the last 6 months. In this regard, a final note to warn that this procedure described here must be carried out by the end of the third month following the death of the deceased, otherwise fines will be applied.
With proof of the declaration of participation, it is now possible to unblock the balance of the financial product, provided that all heirs agree. Otherwise, an inventory process must be initiated for the distribution of assets, and only after the inventory process is complete will it be possible to unblock the balance, with the delivery of a certificate of the final judgment.
It should be noted that banking institutions, as mentioned above, generally block financial products in their entirety, whether they are held solely by the deceased or by the deceased and other account holders – joint accounts, only allowing their movement upon completion of the procedure described above. They also assume by default that the balance of a joint account is held by the deceased and heirs or third parties in equal shares, which is why the “unfreezing” of the balance will follow this logic, unless otherwise determined by a court ruling or agreement between the heirs.
Finally, it should also be noted that if nothing is done with regard to financial products, after 15 years the amounts are deposited in favor of the State.
Source: idealistanews