EIN/SSN? Check Payable to Estate for Beneficiary

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Question:

An account owner dies with a beneficiary. A check is brought in by the beneficiary payable to the estate. Must the account be changed to an estate account with an estate EIN or can the individual's account be changed to an estate account using their SSN for a short time?

Answer:

The account should be closed and a check issued payable to the beneficiary. Do not allow the beneficiary to deposit any checks into the account or change ownership of the account as the bank could be held liable by any beneficiaries of the estate for allowing this individual to take ownership of funds to which he is not entitled.

The court appointed executor/administrator must open up a new account in the name of the estate to deposit this check. This person is then responsible for issuing checks to the appropriate individuals/entities who have a claim to the estate's funds.

First published on BankersOnline.com 9/3/12