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Home >> Special Situations >> Deceased Individuals
Honoring Unnegotiated Checks after Death
How will the bank treat the checks issued by the account holder prior to his death? Can the bank still honor the unnegotiated checks since these were issued before the death of the depositor?
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 The answer to your question is found in state law. Specifically, look to the Uniform Commercial Code of the state in which the bank is located, and review section 4-405.
In general, the bank is permitted to continue to pay authorized items drawn on the account if it has no knowledge of the death of the sole owner of the account. Once the bank learns of the sole owner's death, it may continue paying items authorized before the owner's death for up to ten calendar days after the date of death. However, if the bank gets a notice during the ten day period from anyone claiming an interest in the account, requesting that no further payments be made, the bank must stop paying items on receipt of the notice. Such a notice could come from a family member, a creditor or any other party that might have an interest in the account.
After the ten day period following the date of death, the bank cannot honor items, even if they were authorized by the account owner before his/her death. Check the version of the appropriate state's Uniform Commercial Code for any variation from those requirements.
Published on BankingQuestions.com 8/18/10
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