What is "Legal Authority"?
When someone passes away, their bank accounts, investments, and property don't automatically transfer to family members. Before anyone can access these assets, close accounts, or distribute funds, they need legal authority - formal, legally recognized power to act on behalf of the estate.
Think of legal authority like having the right keys to a locked house. Being related to the homeowner doesn't give you the right to enter; you need the actual keys that the law recognizes.
Common Misconception: "I'm Family, So I Have Authority"
This is not true. Being a spouse, child, parent, or sibling does NOT automatically give you legal authority to handle someone's estate.
Real-World Example:
Sarah's father passes away. Sarah is his only child and closest family member. She has:
His passwords
Access to his house
His mail
A copy of his will
But Sarah does NOT have legal authority to:
Close his bank accounts
Sell his property
Transfer his investments
Access his retirement accounts
Why? Because she hasn't obtained any legal document that grants her this power. Banks will refuse to work with her until she does.
What Creates Legal Authority?
Legal authority comes from specific legal sources. Here are the most common:
1. Court Appointment
Letters Testamentary - If there's a will and you're named as executor, you must petition the court to officially appoint you. The court issues Letters Testamentary, which prove your authority.
Letters of Administration - If there's no will (or no executor named), someone must petition the court to be appointed as administrator. The court issues Letters of Administration.
What this means: You must file paperwork with the probate court, potentially attend a hearing, and wait for the court to issue official letters. Only then do you have authority.
2. Small Estate Affidavit
Many states allow simplified procedures for smaller estates. You complete a sworn affidavit stating you meet specific requirements (estate value under a threshold, proper relationship to deceased, waiting period met, etc.).
What this means: You don't need court involvement, but you must follow the exact requirements of your state's small estate laws. The statute itself grants you authority once you properly complete the affidavit.
3. Trust Documents
If assets are held in a trust, the successor trustee named in the trust document has authority to manage those trust assets.
What this means: You must have a valid trust document that names you as successor trustee. You may need to provide a "Certification of Trust" to financial institutions.
4. Beneficiary Designations
Some assets pass directly to named beneficiaries (life insurance, retirement accounts with beneficiary forms, payable-on-death accounts).
What this means: If you're named as the beneficiary on the account paperwork itself, you can claim that specific account by providing a death certificate and proof of your identity. This doesn't give you authority over other assets.
What is NOT Legal Authority?
These common situations do NOT create legal authority:
❌ Just being the closest family member
Being the spouse, child, or parent doesn't automatically grant you power to act.
❌ Being named in the will
Until the will is admitted to probate and the court appoints you, you have no authority.
❌ Having account passwords or PIN numbers
This might give you access, but it doesn't give you legal permission to use them.
❌ Power of Attorney
Powers of Attorney automatically terminate when someone dies. Even if you had POA while they were alive, you have no authority after death.
❌ Having physical possession of assets
Having their checkbook, credit cards, or keys doesn't create legal authority.
❌ Verbal agreements or family consensus
Even if all family members agree you should handle things, financial institutions require legal documentation.
Why Do Banks Require Legal Authority?
Financial institutions are legally required to protect the deceased person's assets and can face serious liability if they release funds to the wrong person. They need proof that:
You have the legal right to access the accounts
You have the power to make binding decisions for the estate
They won't be sued for releasing funds to you
What banks need to see:
Official court documents with raised seals or court clerk stamps
Properly completed Small Estate Affidavits with notarization
Trust documents with trustee certifications
Death certificates plus beneficiary designation forms
They cannot and will not accept:
Your word that you're the legal representative
Copies of wills without court appointment
Family letters stating you have permission
Informal arrangements between family members
How to Obtain Legal Authority
Step 1: Determine What Type of Authority You Need
Ask yourself:
Is there a will? Was an executor named?
What's the total value of the estate?
Are assets held in a trust?
Which state did the person live in?
Step 2: Choose the Appropriate Path
If there's a will and you're named as executor:
File a petition for probate in the county where they lived
Provide the original will and death certificate
Attend a hearing if required
Receive Letters Testamentary from the court
If there's no will:
File a petition for administration
Provide proof of your relationship and priority to serve
Receive Letters of Administration from the court
If the estate is small (typically under $50K-$184K depending on state):
Complete a Small Estate Affidavit
Wait for the required waiting period (typically 30-40 days after death)
Have it notarized
No court filing required in most states
If assets are in a trust:
Locate the original trust document
Prepare a Certification of Trust
Gather required identification
Step 3: Obtain Multiple Certified Copies
Once you have your authority document, get multiple certified copies. You'll need to provide original or certified copies to each financial institution.
Key Takeaways
✓ Legal authority must come from a recognized legal source (court, statute, or valid legal document)
✓ Being family doesn't equal having authority
✓ You cannot access estate accounts without proper legal documentation
✓ Different types of authority documents are appropriate for different situations
✓ Financial institutions are legally required to verify your authority before releasing any funds
✓ Sunset Estate Services can help you determine what type of authority you need and guide you through the process of obtaining it
Need Help Determining Your Path?
If you're unsure what type of legal authority you need or how to obtain it, Sunset can help you:
Determine which authority document is appropriate for your situation
Understand your state's specific requirements
Prepare the necessary documentation
Navigate the process step by step
The type of authority you need depends on factors like estate value, whether there's a will, your state's laws, and how assets are titled. We'll help you figure out the right path forward.
Frequently Asked Questions
Q: I found my parent's will that names me as executor. Can I start closing accounts now?
A: No. Being named in a will doesn't give you authority until the court officially appoints you and issues Letters Testamentary. You must first petition for probate.
Q: My spouse died and we had joint bank accounts. Do I need Letters Testamentary to access those?
A: No. Joint accounts with right of survivorship typically pass directly to the surviving account holder. However, you will need legal authority to close accounts that were in your spouse's name only.
Q: The bank is asking for "Letters" but my state uses a Small Estate Affidavit. What do I do?
A: Provide your Small Estate Affidavit along with a death certificate. If the bank insists on Letters, explain that your state allows the small estate process and refer them to their legal/estate department. Most banks are familiar with small estate procedures.
Q: How long does it take to get legal authority?
A: It depends on the path:
Small Estate Affidavit: Immediate once completed (after required waiting period)
Probate/Administration: 2-8 weeks for court appointment, depending on the court's calendar and complexity
Trust: Immediate if you're the named successor trustee
Q: Can I handle the estate without getting legal authority?
A: No. Financial institutions will not release funds or close accounts without proper legal documentation. Attempting to access accounts without authority could be considered fraud.
Q: I have Power of Attorney. Doesn't that let me handle my parent's estate?
A: No. All Powers of Attorney automatically terminate at death. You'll need to obtain estate authority through one of the methods described above.