How to closed a deceased person's bank account from abroad?

August 21, 2023 2:01 PM

Trying to close an Indian bank account for my mom who passed away earlier this year but being told I have to journey to India to do it. Help?

My mom passed away at the beginning of the year but had an account with SBI (State Bank of India.) She had designated me as her "nominee" which I believe is basically a beneficiary. She was a naturalized US citizen so that may complicate things? She also didn't seem to have online banking set up.

Unfortunately I have been told in multiple ways (SBI employees at US branches, the SBI website, every South Indian auntie I know, reddit, etc) that the only option for me to withdraw the money and close her account is to fly myself to India. Apparently opening a SBI account in the States and transferring money from her account is not possible, according to an SBI employee I spoke to.

I've only done this journey to India with my mom and it feels impossible for me to do solo (23 hours of plane travel and then a 10 hour train ride to a small town, oh and also, I barely speak the language.) I do have extended family there but I'm not particularly close to them and they WILL pester me about my mom and her manner of passing and for multiple reasons I just do not have it in me to deal with this after dealing with everything else related to her death this year.

My question are: have any of you dealt with this situation? Do I have ANY other options for getting this taken care of without having to journey to India??

posted by KarmicKintsugi to Work & Money (9 answers total)

The traditional way this kind of thing is handled is that you get a lawyer in India to handle it. The lawyer will either want a flat fee or a percentage.

As always, these things have costs. You’re entitled to $X, but getting it will cost you $Y. We cannot tell you whether it’s worth Y to get X.
posted by PaulVario at 2:15 PM on August 21, 2023 [2 favorites]

Best answer: First, the SBI staff are being honest. Banking in India is an unholy nightmare of strange inflexible rules designed to break various types of scams.

The only possible way of handling this from the US will involve hiring one or more Indian lawyers, which I do not have expertise in -- but I very VERY strongly recommend that you find the most upright professional lawyer you possibly can. Do NOT pick someone based on "friend of a friend" recommendations, and now is probably not the time to play hardball on professional fees.

Secondary point, however: unless the account contains very little money it may have been subject to FBAR disclosures that should have been filed with FinCEN. If that was not done there will be penalties to be paid, which a lawyer can explain.

...all of the foregoing being reasons why nearly all indian-diaspora persons use the old route of flying back to India, spending a few weeks sorting things out at great hassle, and then arrange to fly any remaining money back to the US in locked carry-on bags with bundles of cash that very carefully add up to $500 less than the US Customs declaration limit per trip. DO NOT exceed the customs limit unless you want to see the money get seized and "disappeared".

Step One, if you can possibly manage it, would IMO be to figure out how much money is in the account and decide if you really want to bother.
posted by aramaic at 5:19 PM on August 21, 2023 [13 favorites]

Another thing to look into is whether this needs to be done anytime soon, or whether it can wait until a time when you're more up to dealing with it.

I hope this year is a better one
posted by trig at 12:10 AM on August 22, 2023 [1 favorite]

I suggest going to India yourself if the amount of amount is large enough. I wouldn't even know where to begin hiring an Indian lawyer sight unseen. I'm inclined to tell you not to risk it.

FWIW I received a small part of my great-grandfather's estate about ten years ago (he passed away thirty years ago and it took that long to settle his estate, go figure) - this was about 25,000 rupees deposited for me in a HDFC bank account. I had no idea how to even access the account from the US, because the bank kept saying I needed a PAN card and an Aadhaar card and this and that. I just let it go, and basically over the next five years the bank ate up those 25,000 rupees in account fees. I get weekly nagging reminders from HDFC bank to formally close my account. I've filtered these emails away from my inbox and ignore them completely. They can fuck right off.
posted by MiraK at 3:01 AM on August 22, 2023 [3 favorites]

Response by poster: Thank you all, and thanks for the in-depth explanation @aramaic.

There are some dynamics that make going to India difficult (family unaware of her cancer diagnosis per her wishes, but they'll see it on the death certificate for sure and I may bear the brunt of that fall out as I told them something else entirely) but it seems I have to go as the balance on the account is around $35K (I had no clue, I don't know why that money wasn't in the States where it could have been helpful, and I'm not sure what it was intended for.)

Quick follow up questions given this

- it seems I have to declare taking more than $5K USD out of India to *Indian* customs? I find this confusing and given past experience in India, ripe for corruption/requests for bribes. If I can only take out $9.5K at a time for US customs purposes then is it worth it to just try and set up a wire transfer to a US bank and eat the fees/penalties?
posted by KarmicKintsugi at 8:29 AM on August 22, 2023

It’s absolutely not true that you have to limit yourself to bringing in less than $10,000 in a trip. This is a common point of confusion. You need to DECLARE it on your customs form and they may confirm the amount when you’re going through customs. But if you go over and close out the account, on the US side, you’re okay bringing that money back in. I can’t speak to taking the money out of India, though.

Good luck, and my condolences on the loss of your mom.
posted by kate blank at 11:13 AM on August 22, 2023 [1 favorite]

US$10k is only the limit for declaring at US customs; you can bring as much cash as you wish back home as long as you declare it properly, and as long as you have paperwork and other evidence to show the source of the money. They will probably hassle you a tiny bit but the more documentation you can provide as to the source of the cash, the easier it will be. Death certificate and any legal documents indicating you as the beneficiary of her accounts would all help I imagine. The more the better.

I don't know for sure but I'm assuming it's the same for Indian customs; the 5k might be only the limit for reporting / declaring it, but it's probably perfectly ok to have more on you if you can document it.
posted by SquidLips at 11:16 AM on August 22, 2023 [2 favorites]

[The reason to bring in sub-US declaration amounts is to avoid drawing attention to the fact that the bank account in question was subject to FBAR (mother was clearly a "US Person" for FinCEN purposes) and was very likely not properly reported (if the FBAR paperwork was filed there'll be copies in her tax files; there will be no trace on the Indian side because they don't care [rightly so]). Bringing in more can draw attention to that (via the paper trail) and thereby incur a $10K penalty if it is deemed "non-willful". If it's deemed "willful" then it's up to 50% of account value. Which penalty applies gets tricky with the account owner being deceased, and will probably ride on the good graces of whomever makes the intercept (can you prove she didn't keep the account secret to avoid taxes? I couldn't.). Of course, pre-9/11 you could have just called your havala guy and been done with the whole affair. The other option, of course, is to hire a US lawyer to "regularize" matters with the IRS, which will generally yield a fine + lawyer fees, and then after that they'll stop caring so you can just bring in what's left in one go as long as you have enough paperwork and are prepared to face the possibility that a racist asshole in the CBP will just take your money "because you look brown enough to be a drug courier" (this is a thing that happens, and they know exactly how much they can seize without most people being able to afford filing suit to recover).]
posted by aramaic at 1:21 PM on August 22, 2023 [1 favorite]

Wiring funds over X amount also raises the same flags with the IRS (I believe). Although at least it doesn't raise those flags in person while going through customs, which is an advantage (as is not having to worry about physically carrying enormous sums of cash).

The bank itself should be able to tell you what the FBAR situation is, at any rate. It might be fine - technically non-US banks are required to report accounts held by "US persons", and my bank had me fill out the FBAR paperwork itself.

I'm surprised at the idea that fines for noncompliance would be levied when the noncompliant party is no longer alive, but I guess it may well be.


Regardless, and with the big caveat that my experience is not with India and your situation with this bank might be completely different, I'd find out if it's possible to get an international ATM or credit card on that account that will be usable in the US. That would give you yet another option in terms of how to actually get the money across, and possibly (possibly) have cheaper fees.
posted by trig at 3:50 PM on August 22, 2023 [1 favorite]