Israel Faces Billions in Unclaimed Funds from Deceased Bank Account Holders

Approximately 86,000 bank accounts belonging to deceased individuals, holding a combined total of around 1.6 billion shekels (approximately $430 million USD), remain unclaimed within Israel's banking system. These accounts are part of a larger pool of about 530,000 dormant accounts and deposits, collectively worth 6.5 billion shekels. Often, the primary reason for these funds remaining unclaimed is that the information about the account is held by a single individual, and while free search systems exist, they may not be exhaustive.

Under Israeli law, standard powers of attorney and authorizations granted by a parent to a child for bank accounts expire the moment the parent loses legal capacity. This creates a critical gap precisely when families need access to manage financial affairs. A 'continuing power of attorney,' established while the parent is still capable, is designed to bridge this gap and becomes effective when the standard authorization ends.

Families have several access levels while the parent is still managing their affairs: a viewing authorization allows children to monitor account activity and identify unusual charges. A power of attorney grants more operational capabilities, and a joint account allows any partner to withdraw funds. Experts advise starting with the lowest level of access that meets the need and escalating as necessary, noting that a viewing authorization often provides significant benefit without relinquishing control and is more readily approved by parents.

In 2024, 2,639 cases of suspected financial exploitation of the elderly were opened, a 27% increase from the previous year. Small, unusual account movements often serve as the first indicator of such exploitation. Automated alerts sent to both the parent's and child's mobile phones are a cost-effective tool for timely detection.

The article also details the process after a person's death, including applying for an inheritance order or probate order, which involves fees and takes approximately 50 days. It highlights the importance of updating beneficiaries on pension funds and insurance policies, as these designations override wills and can lead to unintended distributions if not kept current. Furthermore, it addresses the management of non-bank credit cards, which can remain active and continue to charge accounts for up to 90 days after an administrator is appointed, requiring separate settlement with the credit card companies.