An authorization for automatic debits ceases to be effective upon the death of the grantor of that authorization. In this case, since the account had only one owner, any authorization for debits from the account ended with his death. The so-called "ten day rule" in the UCC (§4-405) only applies to checks (ACH items aren't covered by the UCC in any event).
Last edited by John Burnett; 11/03/11 05:46 PM.
The debits should be returned R15 (account owner deceased).
Do banks sometimes "cheat" on this if the debits are for things like homeowner's insurance or utilities? Sure, I know it happens when the bank knows the family and is assured the family or estate will take care of getting the authorizations canceled or changed to come from another account. But the bank should realize that if a beneficiary or creditor of the estate has a claim to funds in the account and determines the bank knowingly allowed debits post mortem, the bank can be pursued for recovery.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8