PayPal, Wise and the Balances Nobody Knew About

When someone dies with money sitting in a PayPal or Wise account, that money does not disappear and it is not lost to the family. It is an asset of the estate, exactly like a bank balance, and an executor or administrator can claim it. What is different is how you claim it, how long it takes, and the fact that the money was never protected in quite the way it would have been in a bank.

These are e-money accounts rather than bank accounts, and that distinction — invisible in day-to-day use — starts to matter the moment the holder dies. The provider will release the balance, but only to the right person and only once it has seen the right paperwork, and the timescales tend to run longer than a high street bank's. The other difficulty is often just discovering the account was there at all, because nothing about it arrives in the post.

This guide covers how PayPal, Wise and similar services hand a balance over to an estate when the account holder dies, why the money sat outside the protection a bank account carries, and where the evidence of the account is usually hiding.

The short answer: it is estate money, claimed a different way

Whatever is held in a PayPal or Wise account belongs to the person who died and, through them, to their estate. It has to be gathered in, valued and distributed like any other asset. The family cannot simply log in and move it — operating the account after the holder's death is not allowed, and trying to do so can freeze it or breach the provider's terms — but the provider will pay the balance to the estate once it has verified who is entitled to deal with it.

The practical route is the provider's bereavement or account-closure process, not the ordinary customer support line. You tell them the holder has died, send what they ask for, and they close the account and release the money. It is deliberately not instant, because the provider has to be sure it is paying the right person.

Why an e-money account is not a bank account

PayPal and Wise are authorised as electronic money institutions, not banks. In everyday use the difference is invisible — you hold a balance, you send and receive money — but it changes what stands behind the money if the firm itself ever fails.

A bank or building society account is covered by the Financial Services Compensation Scheme, which protects eligible deposits up to a set limit per person per authorised firm if the firm goes under. An e-money balance is not covered by that scheme.

Instead, the rules require these firms to safeguard customer money — to keep it separate from the firm's own funds, either in a segregated account at a bank or in low-risk assets — so that if the firm fails the money can be returned to customers. That is a genuine protection, but it is not the same as compensation: there is no scheme to top up a shortfall, and returning safeguarded money can be slow and can have the administrator's costs taken out of it first. None of this is a reason to panic about a balance today, but it is a reason not to leave large sums sitting in an e-money account for years, and it is worth knowing when you are weighing up where the estate's money is safest. You can read on the FSCS website what deposit protection does and does not cover, and the limit that applies now.

How PayPal releases a balance to the estate

PayPal runs a bereavement process. You provide the death certificate, evidence that you are the executor or administrator — a grant of probate, or letters of administration where there is no will — and your own identification. Once PayPal has verified all of that, it closes the account and releases the balance to the estate, usually by cheque or bank transfer.

Two things are worth knowing before you start. PayPal balances are often tied to other activity — an eBay selling account, subscriptions billed through PayPal, or money still owed on recent sales — so the closure may need those loose ends tied off first. And because PayPal is not a branch you can walk into, everything happens by email and upload, which is part of why it tends to take longer than closing a bank account. Where you are paying costs out of your own pocket while you wait, keep the receipts — our guide on keeping receipts for the bills you pay before probate explains how to get that money back from the estate.

Wise and other e-money providers

Wise handles it in much the same way, with one wrinkle: a Wise account can hold balances in several currencies at once, so there may be more than one pot of money to gather, and the amounts will move slightly with exchange rates until they are converted and paid out. As with PayPal, you contact the provider's bereavement route, supply proof of death and of your authority to act, and the balance is released to the estate.

The same approach applies to other e-money and payment apps the person used. Treat each one as a separate small account that has to be found, claimed and recorded. It is the same care you would take with money that can still be reclaimed from a bank account after a death — nothing gets spent quietly, and everything is written down.

It is also worth checking which of the person's app-based accounts are actually banks and which are e-money, because it changes both the protection and the way the money comes back. Some familiar app names hold a full banking licence; others operate as e-money or payment firms. The provider's own bereavement page or its terms will say which it is, and that determines whether the balance is a protected bank deposit or safeguarded customer money — a distinction that is invisible until exactly the moment it matters.

Pending money, disputes and a negative balance

An e-money account is not always a simple positive balance waiting to be collected. Money can be tied up in ways that take time to resolve, and it is worth knowing about them before you assume the figure on the screen is what the estate will receive.

If the person sold things online, there may be payments still clearing, funds held back against the risk of a return, or open buyer disputes and chargebacks that have not settled. A chargeback can even pull a completed sale back out again weeks later. In the other direction, an account can carry a negative balance — most often where a chargeback or a refund has left it owing the provider money — and that is a debt of the estate to be dealt with alongside the others, not something that disappears because the holder has died.

Tell the provider the position and ask it to hold the account while it works through anything outstanding. Do not try to complete sales, issue refunds or resolve disputes yourself through the account: that is operating it, which you are not entitled to do, and it can make the eventual reconciliation harder rather than easier.

Finding out the account existed at all

The hardest part is often simply knowing to look. E-money accounts generate no post, no passbook and no branch, so the family may have no idea one was ever opened. The evidence is almost entirely digital, and it is worth searching for deliberately:

• The email inbox. Search for the provider names, and for terms like "receipt", "payment sent", "you've been paid" and monthly statement emails. This is where most e-money accounts give themselves away.
• Bank statements. Look for transfers to or from PayPal, Wise and similar names. A top-up going out, or a withdrawal coming in, tells you the account exists even if you cannot yet get into it.
• The phone and tablet. The apps themselves, and any notifications or saved logins, are often the clearest sign.
• Card and subscription trails. A recurring charge routed through PayPal points to an account that needs closing so the billing stops.

If you find evidence of an account you cannot open, you do not need to break into it. The provider's bereavement process is the proper route, and proof that the account existed is enough for them to act on.

Valuing it, and reaching the family faster

Whatever is recovered goes into the estate accounts and is valued at the date of death for probate and, where relevant, for inheritance tax. Balances in foreign currency are converted to sterling. Keep the provider's confirmation of the closing balance as your evidence, and record the payment into the estate when it arrives. If the person was owed refunds or a tax rebate as well, our guide on reclaiming overpaid tax and marriage allowance after a death covers the ones that are easy to miss, and if there were ongoing subscriptions billed through the account, the rules on exit fees on a dead person's contracts are worth a look before you cancel anything.

Two smaller points are easy to miss as you close things down. Any interest or rewards the account paid may carry a small tax angle, so keep the paperwork if the estate has to report income to HMRC. And cancel, or let the provider cancel, any subscriptions and recurring payments that ran through the account, because those can keep trying to collect and generate failed-payment clutter long after the balance itself has gone. Recording each closure as you go saves you reconstructing it months later when you draw up the estate accounts.

All of this takes time, and that is the real lesson families draw from it: the money you can reach quickly after a death is rarely the money sitting in accounts that have to be claimed. A life insurance policy written in trust is different — it is designed to pay the people named in it directly, outside the estate and without waiting for probate or a provider's closure process. If there is no cover in place, you can get life insurance quotes and have an FCA-authorised broker price it against your circumstances.

Scotland and Northern Ireland

An e-money balance is treated as part of the estate wherever in the UK the person lived, and the provider's bereavement process is the same. What changes is the document that proves your authority to claim it. In Scotland that is confirmation from the sheriff court rather than a grant of probate, and the executor produces that to the provider. In Northern Ireland the grant is obtained through the Northern Ireland Courts and Tribunals Service. The provider will tell you which document it needs; the underlying position — that the money is the estate's, and that it is claimed rather than simply withdrawn — does not change. There is more in our guide to bereavement admin, assets and contracts, including how sibling contracts are handled, such as what happens to pet insurance when the owner dies.

Frequently asked questions

How does an executor claim a PayPal balance?

PayPal has a bereavement process: you send the death certificate, proof that you are the executor or administrator, and your own identification. Once that is verified the account is closed and the balance is released to the estate, usually by cheque or transfer. Timescales run longer than a bank's.

Is money in an e-money account protected like a bank balance?

No. E-money firms such as PayPal and Wise are not covered by the Financial Services Compensation Scheme. Customer money must instead be safeguarded in separate accounts, which is a different form of protection. It matters if the firm fails, and it is worth knowing before leaving a large balance there.

How do I find out whether these accounts existed at all?

Search the email inbox for receipts and statements, look for transfers to or from the provider on bank statements, and check the phone for the apps. Nothing arrives by post, so the paper trail is thin and the digital trail is where the account will show itself.