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Check returned by deceased's bank


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Ok, hears a weird one that I hope someone can help me with. My mother wrote me two checks back in April of this year and she passed away about a week later. Today, Oct 7, I get a call from my bank saying that these two checks have just been returned to them and that my account has been deducted this amount.

I asked the person that I spoke with at my bank what the deal was and she said that she did not know but that the bank the checks were written on were saying that there was insufficient funds to cover the checks. I asked my bank if they had received the funds from the original bank back in April and she wasn't really clear on the answer. She just kept saying that they had received the checks back today and that the money had to be deducted because the checks didn't clear.

I think that what may have happened is that she wrote the check before her SS check was deposited in the expectation that the deposit would be made before the check was cashed.

For a little background, I paid the majority of her bills and took care of her and she gave me a little money each month.

I guess my main question is, does anyone have any experience in the banking industry and does this sound right to you? It doesn't make sense to me that the checks would clear back in April and then in October the bank would send the checks back. Also, there has been no mail that has come for her that says anything about these checks being returned.

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I am sorry to hear your mother passed away.

It is awful that a bank would take advantage of this situation six months after the fact.

I do not know enough about banking to completely answer the question, but it seems there are a couple of issues:

1) Date the checks were deposited and cleared in your account

2) What funds were used to pay the checks? (eg Social Security Funds or other funds) Apparently the bank that the checks were drawn upon has some liability from the time that they know of your mother's passing (see below).

What is the name of the bank that returned these checks six months after clearing them?

Do you think that the ss payment was made to her after she passed away? If so, the bank may have returned the funds back to social security - although in the below information it references 24 hours as being adaquate - not six months. I think first of all you need to contact the bank that reclaimed the funds from your account.

I found something about bank liability that may help you when you are speaking to your mothers bank representative:


see recap here for part of the discussions:

VI. 210.10&11 - RDFI Liability & Limited Liability

Q1. Must a financial institution return a benefit payment if the recipient is deceased on the payment date?

A1. No. The financial institution must return a benefit payment only if the financial institution has actual or constructive knowledge of the recipient's death at the time the post death payment was credited to the recipient's account. 210.10(a).

Q2. How long does a financial institution have to take action after it learns of a recipient's death by whatever means?

A2. One business day, i.e., twenty-four hours (excluding holidays and weekends). 210.2(B); 210.10(a); 210.11(a)(1).

Q3. If a financial institution fails to comply with the requirements of 31 CFR 210, Subpart B, does it lose its right to limit its liability under Subpart B?

A3. No. However, the financial institution will be liable for any loss resulting from the financial institution's failure to comply with the requirements of Subpart B in a timely and accurate manner. For example, if the financial institution learns of a recipient's death and fails to notify the paying agency, the financial institution could be liable for losses incurred by the agency because it continued to send payments to the recipient's account. 210.11(d).

Q4. Will a financial institution be liable to an agency for ATM withdrawals from an account that occur after the financial institution has received a notice of reclamation?

A4. The basis for calculating a financial institution's reclamation liability is the "amount in the account," which is the account balance at the time the financial institution receives a notice of reclamation and has had a reasonable opportunity to take action on the notice. One business day will normally constitute a reasonable opportunity to take action. Thus, a financial institution's liability is not affected by any ATM withdrawals that occur within one business day of the financial institution's receipt of the notice of reclamation. 210.2(B); 210.11(a).

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Seems like six months after notification of her death is too long to reclaim as the above references 'one business day' - but you would need to hear from banking experts on this.

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