What Should I Do If I Receive a Check Made Out to the Deceased?

Finding a check addressed to your deceased loved one creates a challenge during an already emotional time. Tax refunds, insurance payouts, final paychecks, or dividend checks can’t be deposited or cashed like normal, even if you’re the next of kin.

You might think signing the back with “for deposit only” would work, but North Carolina banks will refuse such checks without proper legal authority. State law provides clear steps for handling this situation, and following them correctly prevents legal complications while ensuring these funds properly benefit the estate.

Who Can Cash or Deposit a Check Made Out to the Deceased?

Only the person with legal authority to act on behalf of the deceased person’s estate can handle checks made out to the deceased. In North Carolina, this person is typically:

1. The executor named in the will (who receives “Letters Testamentary” from the court)
2. The administrator appointed by the court, if there is no will (who receives “Letters of Administration”)
3. A collector by affidavit in cases of small estates

Without this court-approved authority, banks will refuse to accept checks made out to someone who has died, even if you’re the surviving spouse or next of kin.

Steps to Take When You Receive a Check for a Deceased Person

When you find a check made out to someone who has died, taking the correct actions in the right order will help you handle it properly and legally.

1. Determine If Probate Is Necessary

Before you can cash or deposit a check made out to someone who has died, you need to determine if the estate requires formal probate.

In North Carolina, probate may not be necessary if:

• The estate’s personal property (everything except real estate) is worth less than $20,000
• The estate’s personal property is worth less than $30,000 if the surviving spouse is the sole heir

If the estate qualifies, you can use a simplified procedure called “Collection by Affidavit” under North Carolina General Statutes § 28A-25-1.

2. For Small Estates: File an Affidavit for Collection

If the estate qualifies as small:

1. Wait at least 30 days after the person’s death
2. Complete the “Affidavit for Collection of Personal Property of Decedent” form (available from the Clerk of Superior Court or North Carolina courts website)
3. File this with the Clerk of Superior Court in the county where the deceased lived
4. Pay the filing fee (typically $120)
5. Receive a certified copy of the affidavit

You can then take this certified affidavit to the bank, along with the death certificate and your ID, to deposit the check into an estate account or cash it.

3. For Larger Estates: Open Formal Probate

If the estate doesn’t qualify for the small estate process:

1. File a petition with the Clerk of Superior Court in the county where the deceased lived
2. Submit the original will (if there is one) and a certified copy of the death certificate
3. Pay the filing fee ($120 plus a percentage based on estate value)
4. Take an oath as executor or administrator
5. Receive Letters Testamentary or Letters of Administration

Once you have these documents, you can proceed to handle checks made out to the deceased.

4. Open an Estate Bank Account

As the authorized representative, you’ll need to:

1. Obtain a tax ID number for the estate (called an EIN) from the IRS
2. Open an estate bank account using the Letters Testamentary/Administration and the EIN
3. Deposit all checks made out to the deceased into this account, not your personal account

5. Endorse the Check Correctly

When endorsing the check, use the proper format:

“Estate of [Deceased’s Name], by [Your Name], Executor” (or Administrator)

For example: “Estate of John Smith, by Jane Smith, Executor”

Some banks may have their own specific requirements for endorsement, so it’s best to check with the bank first.

What About Checks That Could Skip Probate?

Some checks might be able to bypass probate, depending on how they’re made out:

1. Joint Accounts: If the check is for a joint account with right of survivorship, the surviving account holder might be able to deposit it.
2. Payable on Death (POD) Accounts: If the deceased set up a POD account and the check relates to this account, the named beneficiary may be able to claim it directly.
3. Small Estate Refunds: Some government agencies and insurance companies may reissue checks to surviving spouses or next of kin for small amounts if you provide a death certificate and proof of relationship.

However, most checks made out solely to the deceased will require proper estate authority to handle.

What If the Check Is for a Tax Refund?

For IRS tax refund checks:

1. If it was a joint tax return and the check is made out to both spouses, the surviving spouse may be able to deposit it
2. If the check is made out only to the deceased, you’ll need to:
   • Return the check to the IRS
   • Submit Form 1310 “Statement of Person Claiming Refund Due a Deceased Taxpayer”
   • Provide a copy of the death certificate
   • Include your Letters Testamentary or Administration

The IRS will then reissue the check to the estate or qualified person.

Common Mistakes to Avoid

1. Don’t sign the deceased’s name: This can be considered forgery, even if you have good intentions
2. Don’t deposit into your personal account: Even if you’re the sole heir, the check must go through the estate
3. Don’t delay too long: Some checks expire after a certain period (typically 6-12 months)
4. Don’t assume banks will make exceptions: Banks have strict rules about deceased customers to prevent fraud

What If the Check Was Made Out to “The Estate of” the Deceased?

If the check is already made out to “The Estate of [Deceased’s Name],” you still need legal authority to deposit it. The process remains the same – you must be the court-appointed executor, administrator, or collector by affidavit.

How Cary Estate Planning Can Help

Dealing with checks made out to a deceased loved one is just one of many complexities that arise during estate settlement. At Cary Estate Planning, we can help you:

• Determine if probate is necessary for your situation
• Guide you through the small estate or formal probate process
• Assist with obtaining the proper authority to handle estate checks
• Advise on opening and managing estate accounts
• Ensure all financial matters are handled legally and efficiently

Don’t risk problems with the bank or legal issues by mishandling checks. Contact us today to ensure you’re following the correct procedures for your loved one’s estate.

Frequently Asked Questions

What if I already cashed or deposited the check without proper authority?

You may need to contact the bank immediately to explain the situation. Banks may freeze the funds and require you to complete the proper estate process. If the money has been spent, you could be personally liable to the estate and other heirs.

Can I ask the check issuer to reissue the check in my name instead?

Some organizations may accommodate this request for small amounts if you provide a death certificate and proof that you’re the rightful heir. However, most will require you to go through the proper estate channels, especially for larger amounts.

How long does it take to get authority to handle estate checks?

For small estates using the affidavit process, you may receive authority within a few days after the 30-day waiting period. For formal probate, the process typically takes 2-4 weeks to receive Letters Testamentary or Administration, though this can vary by county.