What Probate Does
The purpose of probate is simply to change ownership of the deceased person's assets in an orderly fashion. It is not always necessary to probate an estate, but when you do so, the court offers you some protection. It monitors the actions of the estate administrator or executor and ensures that all parties involved with the estate are following current probate law and the wishes of the deceased.
Probate and Checks
When a person dies, his estate becomes a separate entity. Individuals and businesses obviously can no longer deal with the deceased person, but they can deal with the deceased's estate. When a person or organization makes a check out to the estate of a person who has passed away, this means that the estate is the legal owner of the check. In order for someone to cash the check, he would need to get legal authority to handle the check for the deceased. Because probate is the only real way get authority to cash checks intended for the deceased individual and thereby transfer ownership of the funds, you usually cannot cash a check made out to an non-probated estate if no one else is named on the check. If the check is made out to the estate and someone else, then the other person named on the check might be able to cash it, but some banks still may require the authorization of the estate administrator or executor to accept the check, says BankingQuestions.com.
If you do not wish to open a probate account for a deceased individual because of a single check, one option is to contact the issuer. If you can produce documentation clearly showing who has a right to the funds, such as a will, the issuer may consent to reissue the check in the name of those individuals. If the issuer refuses to write a new check, you'll have to go to the probate court and get authorization to work with the deceased's estate.
To get authorization to cash a check made out to the estate of a deceased person, you must file a petition for authorization with the probate court. This petition asks that you be appointed the administrator of the estate. After this, you'll need to attend a hearing to establish your right to administer the estate and verify the validity of any will that the deceased might have left. Once the court formally appoints you as the administrator, you may apply for an Employer Identification Number (EIN) with the Internal Revenue Service, which is necessary to handle taxes related to the administration of the estate. Open a bank account in the name of the estate -- for example, "Estate of Some Person, deceased" -- by presenting your EIN, authorization letter and current identification to the bank representative. Endorse the check as the estate representative. After endorsement, you may either cash the check or deposit the check amount into the new account.