Answer:
Answer by Brian Crow: Can the customer deposit the check? Yes. However, the bank that accepts the check for deposit to an account other than the estate of the deceased is assuming the liability risk in the event a creditor or heir to the estate seeks restitution because the funds rightfully belonged to them, and the bank allowed the deposit to be made to a personal account. If the bank cannot recover the funds from the customer, the bank could ultimately take a loss. Ultimately accepting a check under these circumstances is a risk-based decision the bank must make based on its relationship with the customer and risk tolerance.
Answer:
Answer by Ken Golliher: If he's right, then any bank should be willing to accept them for deposit. If he doesn't have a glimmer of a clue of what he's talking about, then any bank that understands the situation would refuse to accept them.
The checks he wants to deposit do not belong to him. If the estate is closed, those old orders mean nothing; his authority to negotiate checks payable to the decedent or the decedent's estate is the equivalent of that of a passerby who found them on the street. Your bank would be aware of the breach of fiduciary duty and 100% at risk for the amounts involved.
Banks that rationalize this action generally do it based on the fact that the amounts are nominal and they require that the party presenting them provide a personal endorsement as well.
First published on BankersOnline.com 10/17/11
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