What heirs need to know about accessing deposits, handling debts, and avoiding legal limbo after a death.

The death of a family member brings more than mourning and funeral arrangements. Almost immediately, relatives are faced with a practical question that can become emotionally and legally fraught: what happens to the deceased person’s bank accounts, savings, and debts?

With more than eight million Ecuadorians over the age of 15 holding at least one bank account, the issue is far from rare. Yet many families encounter it for the first time only after a death, often without clear guidance on what steps to take or what obligations they may be inheriting along with any money.

Accessing bank accounts after death

Contrary to a common fear, money in a deceased person’s bank account does not remain frozen forever. Banks are required to follow a legal process that allows heirs or a surviving spouse to claim the funds, provided they can demonstrate their right to do so.

The first step is almost always the same: approaching the bank where the account is held with the official death certificate. From there, the requirements depend on the institution and, crucially, on the amount of money involved.

For smaller balances, banks typically allow a simplified process. Identification documents of the heir or surviving spouse, written authorization to withdraw the funds, and proof that inheritance taxes have been paid may be sufficient. Once balances exceed the thresholds set by each bank, the process becomes more formal.

When effective possession is required

For larger sums, heirs are required to present a deed of effective possession. This legal document establishes who the legitimate heirs are and identifies the assets that form part of the estate when there is no will.

Without this deed, banks will not release significant balances. The process ensures that funds are distributed according to the law and protects financial institutions from disputes among potential heirs.

Each bank applies these rules differently. Some require all heirs to appear in person, while others accept notarized authorizations. Documentation often includes identification copies for every heir, formal written requests to withdraw or close accounts, and proof that inheritance taxes have been settled.

Inheriting money also means inheriting obligations

An inheritance is not limited to cash and property. Outstanding debts are also part of the estate. Mortgages, personal loans, and credit card balances do not disappear when the account holder dies.

Under Ecuador’s Civil Code, heirs are not forced to accept an inheritance. They may reject it entirely and, by doing so, avoid responsibility for the deceased’s debts. If they accept, however, they assume those obligations, though only up to the value of what they inherit.

The law establishes a clear order of responsibility. The surviving spouse is first, when a marital partnership existed, followed by children. If there are no children, responsibility passes to the parents, and only then to siblings, each within the limits of the inherited assets.

The protection of inventory benefit

To reduce risk, heirs can choose to accept an inheritance with the benefit of inventory. This legal option allows them to receive assets while capping their liability for debts at the total value of the inheritance.

If debts ultimately exceed the assets left behind, the heir is not personally responsible for the difference. This mechanism is particularly important in cases where the deceased’s financial situation is unclear or where hidden liabilities may exist.

When debts and accounts expire

Not all financial obligations last forever. Ecuadorian law includes time limits for creditors to enforce debts. Executive debts prescribe after five years, while ordinary debts expire after ten years if no legal action is taken.

An unpaid executive debt that is not pursued in time may convert into an ordinary debt, extending the period before it expires. These timelines can affect both heirs and creditors, especially in long-unresolved estates.

Unclaimed money and the state

When no one steps forward, bank balances do not remain untouched indefinitely. Accounts that are inactive and unclaimed for periods ranging from five to ten years are transferred to the Single National Treasury Account, effectively becoming state funds.

This outcome is often avoidable. Clear records, informed heirs, and timely action can prevent money from quietly leaving the family altogether.

For families, the lesson is simple but often learned too late. Planning for succession, keeping clear records of accounts and debts, and understanding basic inheritance rules can spare loved ones unnecessary stress at a difficult moment, and ensure that what was earned over a lifetime does not vanish into paperwork, disputes, or the state treasury.