Unfortunately, when a loved one passes away, there is a great deal to worry about on top of mourning their loss. The confusion of settling a friend or family member's estate can make things even more difficult. Furthermore, most people don't know how to process estate checks. Learning to properly endorse and deposit such a check is important if you are involved in the settlement of the estate.
Dealing With Estate Checks
"Estate check" is an admittedly vague term that can mean different things depending on the context. For the sake of clarification, the type of estate check being discussed here refers to checks made out to a deceased person or checks from the estate of a dead person. It's essential to do everything legally, but it can be overwhelming to properly handle finances during such a difficult time.
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Just because a person has passed away doesn't mean they have ceased to exist as a financial entity. Someone must settle their outstanding debts, and their inheritors must receive any amounts due to them before the person died. If a check is received that is made out to the deceased person or their estate, the executor is the only person who can endorse and deposit it.
Endorsing Estate Checks
The executor of the estate should endorse an estate check in the same way they would any check, by signing on the signature line. They can sign their name and write "Administrator of the Estate of [the deceased's name]." Alternatively, they can endorse it with the full legal name of the estate. According to the Cornell Law School Legal Information Institute, they must endorse it in some capacity that explains their right to do so, as in the first example, or with the name of the estate if their own name is absent.
It can only be legally deposited into an account in the name of the estate. For that reason, one of the first things that the executor must do is establish an account for the estate. They cannot use their personal accounts, the deceased person's personal accounts or the personal accounts of any beneficiary. Again, this process can be confusing, so it may be helpful to get counsel from a trusted attorney.
Executor Cashing a Check
Technically, the executor of a will can cash a check that's been made out to the estate. This is true in most cases. Various banks and jurisdictions (countries and states) have their own rules about financial transactions from estates, so be sure to familiarize yourself with the rules that will impact you.
Strictly speaking, some banks may not be able to cash the check in the literal sense (exchanging the check for actual cash tender), but executors can usually make withdrawals from the estate's account.
Considerations for Estate Check Cashing
Unless you are the executor of the estate depositing the check into the estate's account, you cannot cash a check that's been made out to someone deceased. It's normal in the days and weeks after a person's passing to receive money from people who have not learned of their death. This is especially true if they had a lot of business transactions.
Be very careful not to cash any checks that have been sent from the Social Security Administration without taking care to make absolutely sure it's legal. Experts recommend erring on the side of safety and letting the executor handle everything that comes from the Social Security Administration. If an executor hasn't been appointed, then wait until they are and let them handle anything financial.
As a side note, if you have an uncashed check from a deceased person, and you're sure that they issued the check themselves before their passing, there is no reason why you can't cash it or deposit it into your account as usual.
Consider also: Executor Rights to a Deceased Person's Checking Account