When someone dies, uncashed checks they either received or wrote become part of their estate and are handled by the appointed executor or personal representative. While it's uncommon for individuals to have a large volume of uncashed checks, it's quite typical for a few to be present.
Understanding Uncashed Checks in an Estate
The fate of an uncashed check depends on whether the deceased person was the payee (the one the check was made out to) or the drawer (the one who wrote the check).
Checks Made Out to the Deceased
If the deceased person was the recipient of an uncashed check (e.g., a tax refund, an insurance payout, or a pension payment), these checks are considered assets of their estate.
- Executor's Role: The executor of the decedent's estate is responsible for collecting all assets. This includes uncashed checks that were issued in the decedent's name prior to their death.
- Negotiability: For the executor to cash or deposit these checks, they must still be negotiable. Most checks remain negotiable for a specific period, typically 180 days (six months) from the date they were issued. If a check is older than this period, the bank may refuse to honor it.
- Depositing Funds: If the check is still valid, the executor can usually endorse it on behalf of the estate and deposit the funds into the estate's bank account. This often requires providing the bank with a copy of the death certificate and letters testamentary (the legal document appointing the executor).
- Expired Checks: If an uncashed check has expired, the executor will need to contact the issuer (e.g., the government agency, insurance company) to request a new check be reissued to the estate.
Checks Written by the Deceased
If the deceased person wrote checks that had not been cashed by the payees before their death, the situation is different.
- Bank Account Status: Upon notification of the death, the deceased person's individual bank accounts are typically frozen to prevent unauthorized transactions and to allow for the orderly distribution of assets.
- Potential for Bounced Checks: Any checks presented after the account has been frozen or closed will likely be dishonored (bounce).
- Estate's Obligations: While the checks themselves may no longer be valid, the underlying debts or obligations they represented still exist. The executor is responsible for identifying and paying legitimate debts of the estate using the estate's assets.
- Claims Against the Estate: Payees who hold uncashed checks written by the deceased should file a formal claim against the estate to receive payment for the outstanding amount. The executor will review these claims and pay valid ones according to the estate's priority of debts.
Summary Table: Handling Uncashed Checks
| Type of Check | Deceased's Role | Handling by Executor | Key Consideration |
|---|---|---|---|
| Received | Payee | Negotiate (cash/deposit) into estate account. | Must be within the typical 180-day negotiability period. If expired, request reissuance. |
| Written | Drawer | Checks may bounce; the underlying debt remains. | Payees must file a claim against the estate for payment. |
It's crucial for the executor to manage all financial aspects diligently, including uncashed checks, to ensure a smooth and proper estate administration process. For more detailed information on the responsibilities of an executor and the probate process, resources such as Nolo's guide to estate administration can provide general insights.
