Should the Bank be returning automatic debits from a deceased persons account? Account is set-up as a sole owner account. I just found out that is a procedure our deposit operations is doing. I can see returning checks that were written after the DOD, but I'm just not sure about automatic debits. Anyone have any advise?

Authorization dies with the customer (after the appropriate amoount of days as determined by State law). It is now the estates money.

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).

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.

I'd think about them one at a time before I sent them back. It's February in Vermont. Here's the bill for last month's utilities and we're looking at a record low this weekend...

Of course, if it's one of those banks that uses file maintenance to change ownership from the name/TIN of the decedent to the name/TIN of the estate they're never going to know. At least they won't know until the personal representative comes in questioning the payment of the decedent's gym club membership 60 days after he died.