The Executor's Guide to Estate Bank Accounts: Setting Up, Funding, and Tracking

If you take away one thing from this guide, make it this: the estate's money lives in the estate's own account, and your money never touches it. That single discipline — no commingling — is the spine of clean estate administration and the strongest protection you have as a personal representative. Break it, even with good intentions and a spreadsheet, and you expose yourself to personal liability, beneficiary suspicion, and in serious cases removal by the court.

I am a probate real estate specialist, not an attorney or a CPA, and the estate account sits at the intersection of both of their worlds. So treat this as an orientation, not legal or tax advice — confirm the specifics with your attorney and accountant. But I have watched enough probates from the sale side to know that the estates that run smoothly almost always have one thing in common from week one: a properly opened estate account that every dollar flows through. The estates that turn into messes almost always skipped it.

The reason this matters to me, specifically, is that the home sale is usually the largest single transaction the estate will ever see. When that escrow closes, a very large wire needs somewhere clean and correct to land. If the estate account is not set up properly before then, the sale proceeds can create exactly the chaos this account exists to prevent. Setting it up early is part of getting ready to sell.

So let us walk it in order: get the estate its own tax ID, open the account correctly, fund it without ever crossing your own finances, run every dollar through it both directions, and keep records so complete that the final accounting nearly writes itself.

An estate is a separate legal and taxable entity from the person who died and from you. So it needs its own taxpayer identification number — an Employer Identification Number, or EIN — and you should never run the estate on the decedent's Social Security number. That SSN belongs to a person who has died; using it to hold assets or earn income after death creates reporting problems and crosses lines you do not want to cross.

Getting the EIN is genuinely one of the easier steps. The IRS issues them free, and the online application typically generates the number immediately on completion. On the application, the reason is a banking purpose, and the date the 'business' started is the date of death — that is the moment the estate came into existence. Most banks will not open an estate account without this number, so it tends to be the gating item.

A practical sequencing note: many representatives apply for the EIN as soon as they expect to be appointed, so it is ready the moment Letters issue. You generally need the Letters to actually open the bank account — that document proves your authority to the bank — but having the EIN in hand removes one delay from an already slow process. Ask your attorney whether to apply before or after appointment in your specific case.

Keep the EIN confirmation letter from the IRS. The bank will want it, your CPA will want it for the estate's income tax return, and you will reference it more than you expect. Treat it as a foundational document of the estate, right alongside the Letters and the death certificate.

When you go to the bank, the account is opened in the estate's name with you as the fiduciary signer — something like 'Estate of [Name], [You], Administrator/Executor.' It is not your personal account, and it is not the decedent's old account renamed. It is a new account that belongs to the estate, with you authorized to sign on its behalf because you hold the Letters.

Bring the full kit: a certified copy of your Letters (Testamentary or of Administration), the estate's EIN confirmation, a certified death certificate, and your own identification. Banks vary in exactly what they require, so a quick call ahead saves a wasted trip. Certified copies matter — banks generally will not accept a plain photocopy of the Letters for opening a fiduciary account.

Choose the account features deliberately. Most estates want a simple checking account for the flow of receipts and disbursements; some add a savings or money-market account when the estate holds significant cash for a while, such as sale proceeds waiting out the creditor period before distribution. Order checks and keep the debit card discipline tight — every card swipe is a transaction you will have to justify in the accounting.

One more setup decision: where to bank. Opening the estate account at a bank where you already hold personal accounts is convenient, but be deliberate that the two never blur — same institution is fine, same money is not. Some representatives prefer a different bank entirely precisely to keep the mental and paper separation crisp. Either works; the discipline is what matters.

Now you fund it, and this is where commingling either does or does not happen. The rule is absolute and simple: every dollar that belongs to the estate goes into the estate account, and every dollar the estate spends comes out of it. Nothing estate-related flows through your personal account, and nothing personal flows through the estate account. Not 'mostly.' Not 'I'll reimburse myself later.' Both directions, every time.

Funding typically means consolidating the decedent's accounts into the estate account — closing or transferring the checking and savings the bank will release to you on the Letters, depositing final paychecks or refunds payable to the estate, and collecting other liquid assets as they come in. Each of these is a deposit into the one account, documented as you go.

The most common commingling trap is well-intentioned: a representative pays an estate expense — a utility bill on the vacant house, a repair, the filing fee — out of their own pocket because the estate account is not funded yet, then never cleanly reconciles it. Do not do this loosely. If you must advance personal funds early, document it precisely as a loan or advance to the estate and reimburse yourself from the estate account with a clear record. Better, fund the account first so the estate pays its own bills from day one.

When the house sells, the escrow proceeds wire directly into the estate account. This is the moment all the earlier discipline pays off: a large, clean deposit lands in an account built to receive it, fully documented, ready to wait out the creditor period and then be distributed. Confirm the wire instructions with escrow carefully — proceeds going to the wrong account is the kind of mistake that is very hard to unwind.

The estate account is not just where the money lives — it is the source record for the final accounting you will eventually present to the court and the beneficiaries. Every deposit and every disbursement needs a what, a when, and a why. Build that record in real time and the final accounting is a summary of work already done. Reconstruct it at the end from a year of statements and you will lose days and probably accuracy.

Keep a running ledger from the first deposit: date, amount, source or payee, and purpose. Pair it with the evidence — invoices for repairs, the property tax bill, the closing statement from the home sale, receipts for the cleanout. Reconcile against the bank statement every month. A simple spreadsheet plus a folder of receipts is enough for most estates; the discipline of doing it monthly matters more than the tool.

Categorize as you go, because the accounting and the tax return both want categories: administration expenses, creditor payments, property carrying costs, professional fees, and eventually distributions. When your CPA prepares the estate's income tax return and your attorney prepares the accounting, a clean categorized ledger turns a painful reconstruction into a quick handoff. The same records serve both.

And remember who the records protect. The accounting is how beneficiaries verify you handled their inheritance honestly, and complete records are your defense if anyone ever questions a transaction. A representative with a clean, contemporaneous ledger has nothing to fear from scrutiny. A representative reconstructing from memory has everything to fear, even when they did nothing wrong.

The estate account stays open through the whole administration — receiving the sale proceeds, paying valid creditor claims after the claim period, covering ongoing carrying costs and professional fees — and it is the last thing to close. Resist the urge to distribute to beneficiaries early just because there is cash sitting there after the house sells. Premature distribution before creditors and taxes are settled can leave you personally on the hook for what you handed out too soon.

Distributions, when they come, flow out of the estate account on the court's authority and your attorney's guidance, with each beneficiary's payment documented and ideally accompanied by a receipt or release. Those receipts close the loop on the accounting — proof that the right people received the right amounts.

Only after distributions are complete, the accounting is approved, and there is nothing left to pay does the account get closed. Keep the final statements and your full ledger well beyond closing; questions and tax matters can surface after the estate is officially wrapped, and your records are the only memory the estate has left.

If this sounds like a lot of bookkeeping for a non-accountant, it is — and it is also completely doable with one account and steady habits. The representatives who struggle are not the ones who found it hard; they are the ones who let the account go loose for a few months and then tried to catch up. Open it correctly, run everything through it, track it monthly, and the estate account quietly does its job: keeping the money clean, the beneficiaries confident, and you protected.