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Deposit of Check Payable to Individual & Estate
by John Burnett, BOL Guru
Guru Bio
Question: A branch employee accepted a check that was payable as follows: "John Doe Execs" and the second payee line was "Estate of Jane Doe". The check was deposited into John Doe's personal account. The reasoning was that this was a distribution from the estate account. There is discussion that it should have been deposited into an estate account, is this transaction correct?
Answer: The wording on the check makes it payable to the estate of Jane Doe, since John is named in his executor capacity. That may not have been the intent of the drawer of the check, but that's the way the check reads. If there are claims against the estate that are left unpaid and suit is brought against the estate, it's possible the court will drag the bank into the suit, since it could be considered to be on notice of a breach of the executor's fiduciary duty.
First published on BankersOnline.com 3/24/08
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