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#1650356 - 01/12/12 03:01 PM Depositing check into deceased customer's account
Anonymous
Unregistered


Quick explanation:

We have a customer who has died this morning. Customer's daughter informed us over the phone about this, and indicated that she has a check made payable to her mother (now deceased) that she wants to deposit into her mother's account. She of course doesn't have a death certificate or anything like that yet.

My question is: can we deposit that check without having to fear any legal complications, given that we're aware the customer is no longer alive?

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#1650372 - 01/12/12 03:06 PM Re: Depositing check into deceased customer's account [Re: Anonymous]
Doug Hendrickson Online
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Registered: 10/01/09
Posts: 3504
Loc: NE New Mexico
I would not allow the deposit now that you are aware of the facts. Once someone has been named as the personal representative then that person can deposit the check with the proper endorsement.
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I hear and I forget. I see and I remember. I do and I understand.--Confucius

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#1651549 - 01/17/12 11:32 AM Re: Depositing check into deceased customer's account [Re: Anonymous]
John Burnett Offline

10K Club

Registered: 10/27/00
Posts: 31523
Loc: Cape Cod
If the check is payable to the decedent and the account was only in the decedent's name, the bank can accept it for deposit unless it's a Social Security or similar recurring check payment from the Treasury or a check from an insurance company dated on or after the date of death. But no one can write checks or otherwise remove funds from the account other than the personal representative of the estate (unless the account is closed out by next of kin under state laws addressing small balance accounts.
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John S Burnett
BankersOnline.com

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#1651755 - 01/17/12 02:32 PM Re: Depositing check into deceased customer's account [Re: Anonymous]
Compli(cated) Online
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Registered: 03/21/11
Posts: 127
Loc: Wisconsin
John, under what authority would the daughter be indorsing the check?
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Opinions are my own.
"I was gratified to be able to answer promptly. I said I don't know." - Mark Twain

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#1651761 - 01/17/12 02:40 PM Re: Depositing check into deceased customer's account [Re: Anonymous]
BrendaC Offline
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Registered: 09/18/01
Posts: 6029
Loc: Sweet Home AL
I would stamp or endorse as..."For deposit only into the account of the within payee."

If the item isn't one of those mentioned by John, there is no conversion of assets so there shouldn't be a problem. Would I do it for a $50,000 check? No. Would I do it for a $50 check within only a few days of death (and obviously written to individual prior to his/her death). Probably.
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#1652770 - 01/19/12 10:46 AM Re: Depositing check into deceased customer's account [Re: Anonymous]
John Burnett Offline

10K Club

Registered: 10/27/00
Posts: 31523
Loc: Cape Cod
Thanks, Brenda. I'd not want the daughter to indorse the check at all. I'd fall back on UCC 4-205, which addresses deposited unindorsed checks.
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John S Burnett
BankersOnline.com

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#1655739 - 01/25/12 12:23 PM Re: Depositing check into deceased customer's account [Re: Anonymous]
Compli(cated) Online
100 Club

Registered: 03/21/11
Posts: 127
Loc: Wisconsin
John, isn't UCC 4-205 limited to customers depositing/cashing checks? The daughter is not a customer in this case, nor does she have authority to act on behalf of the customer.

4-205. DEPOSITARY BANK HOLDER OF UNINDORSED ITEM.
If a customer delivers an item to a depositary bank for collection:

(1) the depositary bank becomes a holder of the item at the time it receives the item for collection if the customer at the time of delivery was a holder of the item, whether or not the customer indorses the item, and, if the bank satisfies the other requirements of Section 3-302, it is a holder in due course; and
(2) the depositary bank warrants to collecting banks, the payor bank or other payor, and the drawer that the amount of the item was paid to the customer or deposited to the customer's account.
_________________________
Opinions are my own.
"I was gratified to be able to answer promptly. I said I don't know." - Mark Twain

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#1656203 - 01/26/12 08:55 AM Re: Depositing check into deceased customer's account [Re: Anonymous]
John Burnett Offline

10K Club

Registered: 10/27/00
Posts: 31523
Loc: Cape Cod
You are definitely no dodo, doedoe. UCC 4-205 would probably not be the best on which to rely.

There will be checks payable to the decedent that could be a problem if deposited after the date of death. Examples are annuity payments and certain Treasury payments. There will also be checks that a bank could safely accept for deposit to the decedent's (formerly individually-held) account since they represent funds due the estate.

As a practical matter, endorsements are concerns when there are problems or claims after the fact. When there aren't any other claims to the funds, whether or not there's an endorsement isn't usually a concern. I don't say this to advocate chaos; I'm just pointing out that there are "gray areas" where things just get done in the name of expediency. There's no rule saying it's OK to do it that way, but it often falls into the "no harm, no foul" zone.
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John S Burnett
BankersOnline.com

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#2003774 - 03/24/15 05:20 PM Re: Depositing check into deceased customer's account [Re: John Burnett]
Anonymous
Unregistered


We have a new twist on this subject.

One of our customers issues annuities. They recently found out that one of their annuity customers passed away in 2013. The annutity named no beneficiaries and so should have ceased on the owners death. Since his passing the company has sent three annuity payments that appear to have been deposited by the son of the decedent.

What can we do to retrieve a refund from the son or the bank who has been depositing funds made payable to the deceased.

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#2003786 - 03/24/15 05:45 PM Re: Depositing check into deceased customer's account [Re: Anonymous]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 52451
Loc: Galveston, TX
Well, the endorsement has either been forged or the named payee has not received the funds, which represents a breach of the presentment warranty by the BOFD. State law will dictate how long you can go back to make a claim against the BOFD.
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#2003942 - 03/25/15 12:04 PM Re: Depositing check into deceased customer's account [Re: Anonymous]
Anonymous
Unregistered


Thanks Randy!

Our state is three years.

In this case we will send a letter to the BOFD explaining the situation and requesting a refund.

Are we at all obligated to refund our customer if we don't receive a refund from the BOFD?

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