A question about debit cards

Crashnburn

Crashnburn

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Crashnburn
What happens to the money left on a debit card when the card holder dies?
 
The debit card is an instrument tied to a (typically) bank account.

The bank account belongs to the:

  • Account holder
  • Joint account holder
  • Assigned benefactor

If the deceased is married at the time, in California, the almost-automatic choice is the surviving spouse, unless there are other specific directions.

California is a Community Property State. A "community" is that which is created by a marriage or domestic partnership.

Here's a good quick read: https://www.courts.ca.gov/1039.htm?rdeLocaleAttr=en
 
If you mean a prepaid debt card it probably gets used by someone in the estate.
 
Clip4 said:
If you mean a prepaid debt card it probably gets used by someone in the estate.
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If they have the PIN, sure. But who thinks to give heirs the PINs to their prepaid cards? If it's a typical low-value card (I'm thinking also of the ubiquitous gift cards), I suspect the effort involved in proving to the card issuer that you are the rightful heir to the card's value is going to exceed what the card is worth.
 
For a typical prepaid gift card, you don't need anything that isn't printed on the card to reset the pin. They're just like cash. If it's a rechargeable gift card, the pin reset mechanism may be tied to something the owner had, most likely phone number or email address. Whoever has access to one of those could likely reset it.

I'm just speaking of what's technically possible here, obviously, not what's legal or ethical.
 
Thanks for all the answers. It's a high value card and I was afraid any remaining balance would be zeroed out.
 
Crashnburn said:
What happens to the money left on a debit card when the card holder dies?
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That is not how a debit card works. The question you should really be asking is - “What happens to the money left in a checking or savings account after the account holder dies?”

A personal finance class might be very helpful to you.
 
RyanB said:
That is not how a debit card works. The question you should really be asking is - “What happens to the money left in a checking or savings account after the account holder dies?”

A personal finance class might be very helpful to you.
Click to expand...

Are there two different kind of debit cards? The kind that takes money out of a checking/savings account and then the “prepaid” kind, like the cash was already taken out? Maybe I need a finance class.
 
Rushie said:
Are there two different kind of debit cards? The kind that takes money out of a checking/savings account and then the “prepaid” kind, like the cash was already taken out? Maybe I need a finance class.
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Pre-paid cards like the ones you can load from the checkout line at Walmart are not debit cards, as they’re not linked with any banking account.
 
RyanB said:
Pre-paid cards like the ones you can load from the checkout line at Walmart are not debit cards, as they’re not linked with any banking account.
Click to expand...

A true debit card is just a card that you use at an ATM to get cash out of your own account or at a store checkout to authorize them to debit directly your account, correct?

My sister has something she says she “preloads” to a limited amount that she calls a “debit card” and that’s what she uses to buy stuff instead of a credit card. I have no idea what it is, I’ll have to ask her. Makes no sense to me why she’d use that instead of a credit card where your liability is limited to $50.
 
RyanB said:
Pre-paid cards like the ones you can load from the checkout line at Walmart are not debit cards, as they’re not linked with any banking account.
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Then why do all the financial institutions call them "prepaid debit cards"?
 
RyanB said:
Pre-paid cards like the ones you can load from the checkout line at Walmart are not debit cards, as they’re not linked with any banking account.
Click to expand...
...except for the account the pre-paid funds are held in. You might not have access to it like your traditional checking or savings accounts, but it is an account storing your money that is debited all the same.

Nauga,
and mo money, mo problems.
 
NealRomeoGolf said:
Then why do all the financial institutions call them "prepaid debit cards"?
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Because that is what they are called?
Just because there is not a checking or savings account, does not mean there isn't an account that money can be added to.
 
nauga said:
...except for the account the pre-paid funds are held in. You might not have access to it like your traditional checking or savings accounts, but it is an account storing your money that is debited all the same.

Nauga,
and mo money, mo problems.
Click to expand...

Ah ha! So that’s the difference! A standard debit card, you can walk into your bank and take out your cash without needing the card. But the prepaid, the money was already taken out of your account and put somewhere else. You no longer have access to it. The only way you can access it is to use the card.

Am I right? The OP will need to find out what type card that is. If it’s the normal type then joint tenancy in entirety for the account is what you want, the minute someone dies it’s all yours. It was all yours anyway, you could take 100% of it out yourself even before they die. Or if spouse and it was in their name only and you’re in a community property state you might only need to show a death certificate.

But if it’s a prepaid, and wherever the money is, is associated only with the name of the person who dies, then the only ways to access it is to either know the PIN or to go to whatever institution is administering it and go through whatever estate process is needed (assuming you’re the heir) to get it transferred to you. Am I right?

By the way, if I’m understanding that prepaid card, the bank, or some third party, is earning interest on the money that is no longer in your account until if and when you use the card. Why would anyone do that? I think that is what my sister has. She told me “for security”. She doesn’t want a criminal to access all the money in her checking account if they get hold of the card, that’s why she preloads a small amount.

So why doesn’t she just use a credit card? All the times our CCs are compromised we have never had to pay the $50 liability. Pay it off each month, no interest, and get reward dollars back. I don’t understand my sister.
 
A lot of people use prepaids for gift cards rather than giving a gift card tied to a particular business. It gives the recipient more flexibility.

Others use them to give money to their kids, especially kids away at school or on a trip. The parents will add money as they deem necessary.

There are reasons they exist and reasons people use them.
 
Rushie said:
So why doesn’t she just use a credit card? All the times our CCs are compromised we have never had to pay the $50 liability. Pay it off each month, no interest, and get reward dollars back. I don’t understand my sister.
Click to expand...

if it’s for security reasons it makes no sense. If your sister has a spending problem then it makes sense as it limits the amount she can spend to whatever is loaded on the card. Kind of like on demand budgeting. CC users tend to spend more money than cash users and this approach mimics cash use
 
Debit- an amount subtracted from a ledger or account. Credit- an amount added to a ledger or account. Wouldn’t a “pre-paid debit card” be a credit card? ;)

Lachlan,
who knows you can’t triple stamp a double stamp. :)
 
genna said:
if it’s for security reasons it makes no sense. If your sister has a spending problem then it makes sense as it limits the amount she can spend to whatever is loaded on the card. Kind of like on demand budgeting. CC users tend to spend more money than cash users and this approach mimics cash use
Click to expand...

I can see using it for that purpose plus that would be safe from civil asset forfeiture if you get pulled for an “insufficiently bright taillight”. I haven’t heard of the cops seizing debit cards for being suspected drug money.

I don’t think my sister has a spending problem. She’s just nuts. My kids call her the crazy aunt. They love her.
 
Lachlan said:
Debit- an amount subtracted from a ledger or account. Credit- an amount added to a ledger or account. Wouldn’t a “pre-paid debit card” be a credit card? ;)

Lachlan,
who knows you can’t triple stamp a double stamp. :)
Click to expand...
And yet when you debit cash on the balance sheet (in accounting) your cash goes up, not down. Debit is a dangerous word.
 
Lachlan said:
Debit- an amount subtracted from a ledger or account. Credit- an amount added to a ledger or account. Wouldn’t a “pre-paid debit card” be a credit card? ;)

Lachlan,
who knows you can’t triple stamp a double stamp. :)
Click to expand...

It’s all just marketing; any accurate reference to accounting methods and definitions is purely conincidental.
 
NealRomeoGolf said:
And yet when you debit cash on the balance sheet (in accounting) your cash goes up, not down. Debit is a dangerous word.
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That always confused me. Geez, I hated accounting and I took like 3 semesters of it in college.
 
Prepaid debit cards are also an easy way to send money to someone far away on a regular basis. My late mother in law lived below the poverty line and 1300 miles away. We got a prepaid debit card that I could load each month so that she had extra money for groceries and other things. These things work well for college kids too.
 
NealRomeoGolf said:
Prepaid debit cards are also an easy way to send money to someone far away on a regular basis. My late mother in law lived below the poverty line and 1300 miles away. We got a prepaid debit card that I could load each month so that she had extra money for groceries and other things. These things work well for college kids too.
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This is true. However, you can just open a second checking account for that person and give them a regular debit card tied to that account only. Saves you bunch of pre-paid card fees.
 
genna said:
This is true. However, you can just open a second checking account for that person and give them a regular debit card tied to that account only. Saves you bunch of pre-paid card fees.
Click to expand...
Not gonna tell the accountant how to manage his debit cards.
 
genna said:
This is true. However, you can just open a second checking account for that person and give them a regular debit card tied to that account only. Saves you bunch of pre-paid card fees.
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I originally had it setup like that (sort of) until my credit union closed that program down. You have to make sure the overdraft is not an option on the account if you do how you said.
 
NealRomeoGolf said:
I originally had it setup like that (sort of) until my credit union closed that program down. You have to make sure the overdraft is not an option on the account if you do how you said.
Click to expand...

definitely, i forgot about that part :)
 
RyanB said:
That always confused me. Geez, I hated accounting and I took like 3 semesters of it in college.
Click to expand...

I have a double major in business management and economics, and finances still confuse the hell out of me. I gave up and went back for yet another degree, engineering this time. Finally something that makes complete sense.
 
Thanks for the continued discussion. It has been very helpful.
 
Rushie said:
I have a double major in business management and economics, and finances still confuse the hell out of me. I gave up and went back for yet another degree, engineering this time. Finally something that makes complete sense.
Click to expand...
And that's why I get paid the.....medium bucks.
 
When my Mom died, we used her debit card to pay off the last few bills for the house before it was sold. That way there was no balance left in the checking account and it made closing the account easier.

We had a very specific will that made the process easy for my sister, who was the executor. There were no problems with completing the necessary bank and real estate transactions.
 
Someone posted, "Who gives their heirs their passwords?" If you have trustworthy heirs and you want to make life 100% easier for them, figure out a way to do just that. My father entrusted my brother and me with their passwords, and it was hugely helpful in shutting down automatic payments, closing store accounts, moving money, paying their taxes, etc., when they passed away. I have my passwords in a secure app on my phone, and my husband has the access code to my phone and to the app. I have his passwords (we don't have children, but if I die before he does, the passwords will go to my niece).
 
judypilot said:
Someone posted, "Who gives their heirs their passwords?" If you have trustworthy heirs and you want to make life 100% easier for them, figure out a way to do just that. My father entrusted my brother and me with their passwords, and it was hugely helpful in shutting down automatic payments, closing store accounts, moving money, paying their taxes, etc., when they passed away. I have my passwords in a secure app on my phone, and my husband has the access code to my phone and to the app. I have his passwords (we don't have children, but if I die before he does, the passwords will go to my niece).
Click to expand...

Some password managers have a functionality that allows the account access to a designated person after death. This is the strategy I'm using. The account also has notes as far as what is where, what to do, and how things are paid. Other than that, clean out all deceased accounts and then set up your own. Easiest way to transfer money to a single survivor
 
judypilot said:
Someone posted, "Who gives their heirs their passwords?" If you have trustworthy heirs and you want to make life 100% easier for them, figure out a way to do just that. My father entrusted my brother and me with their passwords, and it was hugely helpful in shutting down automatic payments, closing store accounts, moving money, paying their taxes, etc., when they passed away. I have my passwords in a secure app on my phone, and my husband has the access code to my phone and to the app. I have his passwords (we don't have children, but if I die before he does, the passwords will go to my niece).
Click to expand...
I have an excel file for my wife with each website I use (the important ones anyway) and a number of which password it uses. I then have a hand written paper in a certain place that she knows about where she could go and reference the password to the number.
 
I have a document attached to our trust with passwords, accounts, etc. it lists things like who our plane is insured through, etc. and kept in a secure place with trusted people.
 
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