How to deposit a check payable to the deceased grantor?

[Thank_You]

New York

A grantor creates a revocable living trust.

Grantor dies and the grantor's assets are transferred from the living trust to an irrevocable trust as specified in the original trust document.

A check is received payable to the grantor (not the trust).

How can that check be deposited in the bank account titled to the grantor's irrevocable trust?

Note: Assume the payor of the check refuses to reissue the check payable to the irrevocable trust.

 

[Zigner]

The administrator of the estate and/or the trustee shoudl be able to take care of this.

 

[adjusterjack]

Did the deceased have a "pour-over will"? Google it.

If he/she didn't, then the check is possibly separate property from the trust and would have to be probated.

 

[zddoodah]

Query who you are in this scenario.

Grantor dies and the grantor's assets are transferred from the living trust to an irrevocable trust as specified in the original trust document.

Are they actually transferred? Or do you simply mean that, as a result of the grantor's death, the previously revocable trust has become irrevocable? I'll assume it's the latter, since that would be what normally happens.

A check is received payable to the grantor (not the trust).

How can that check be deposited in the bank account titled to the grantor's irrevocable trust?

The trustee of the trust can try to deposit it into the trust account, and he/she might be successful (depending on how much attention the teller is paying or how carefully the electronic deposit is scrutinized). However, a check payable to the grantor belongs to the grantor's estate, not to the trust (unless there's a pass-through will that leaves the entire estate to the trust).

 

[Thank_You]

The original trust document of the living trust provided for the creation of a separate trust to be established upon the death of the grantor. It is not the same trust as the living trust but a separate trust. The original living trust still exists and holds the property of the grantor's surviving spouse.

I am a trustee of both trusts.

We are getting to where I suspected we might but hoped we wouldn't. The grantor had a pour-over will when he died, but it was never probated because there was no need to probate it. So even though I would be the executor of the pour-over estate, I am not since there was no probate (not even a small estate probate as allowed in NY). All the estate assets were in the trust.

It doesn't seem to me that I could deposit the check as trustee of the irrevocable trust because as both adjusterjack and zddoodah confirmed it is not property of the trust but of the grantor's non-trust estate. So if I as trustee received a check made out to the grantor, I don't see how I could deposit it anywhere.

So I think that changes it from a legal question to a financial one. Is it worth probating the estate in order to be able to deposit the check. In this case very likely not and the money will just have to go unclaimed. The only avenue I see is a possibility that I could have the check issued to the trust instead of the grantor. There is actually a very strong case for doing that. But in practice it might be more trouble than it is worth and very likely impossible to make happen. I will do some preliminary investigation though to see if there is any chance of that.

No check has been issued yet, I am just anticipating what may happen in advance. I have to decide in advance whether or not to do a whole lot of work to collect funds which may in the end amount to a check that I can't deposit.

PS the grantor has been diseased for over three years and this would be the only such check received to date. Settlement of a lawsuit in case you are wondering what the source is.

 

[LdiJ]

The original trust document of the living trust provided for the creation of a separate trust to be established upon the death of the grantor. It is not the same trust as the living trust but a separate trust. The original living trust still exists and holds the property of the grantor's surviving spouse.

I am a trustee of both trusts.

We are getting to where I suspected we might but hoped we wouldn't. The grantor had a pour-over will when he died, but it was never probated because there was no need to probate it. So even though I would be the executor of the pour-over estate, I am not since there was no probate (not even a small estate probate as allowed in NY). All the estate assets were in the trust.

It doesn't seem to me that I could deposit the check as trustee of the irrevocable trust because as both adjusterjack and zddoodah confirmed it is not property of the trust but of the grantor's non-trust estate. So if I as trustee received a check made out to the grantor, I don't see how I could deposit it anywhere.

So I think that changes it from a legal question to a financial one. Is it worth probating the estate in order to be able to deposit the check. In this case very likely not and the money will just have to go unclaimed. The only avenue I see is a possibility that I could have the check issued to the trust instead of the grantor. There is actually a very strong case for doing that. But in practice it might be more trouble than it is worth and very likely impossible to make happen. I will do some preliminary investigation though to see if there is any chance of that.

No check has been issued yet, I am just anticipating what may happen in advance. I have to decide in advance whether or not to do a whole lot of work to collect funds which may in the end amount to a check that I can't deposit.

PS the grantor has been diseased for over three years and this would be the only such check received to date. Settlement of a lawsuit in case you are wondering what the source is.

How much money is involved?

 

[Thank_You]

How much money is involved?

Unknown. It's a class action suit and the final payment cannot be known until it is distributed.

I'll have to do some analysis to see if I can come up with an approximate range which will hopefully give me an idea whether or not to pursue it further. If any kind of probate is required to deposit the check I doubt it would be profitable.

There is a possibility I may be able to get them to make the check payable to the original trust, which is still open but now only holds the grantor's spouses assets. Since both trusts have the same beneficiaries, and the spouse is the sole current beneficiary of the irrevocable trust, and I as trustee have the authority to make disbursements of principle to the spouse from the irrevocable trust, there are unlikely to be an issues. So I could just add it to the spouses assets in the trust and either leave it there or alternatively transfer it to the irrevocable trust. That is my thinking at the moment because I am much more likely able to get them to issue the check to the living trust than the irrevocable trust.

 

[zddoodah]

I am a trustee of both trusts.

Then you owe fiduciary duties to the beneficiaries of the trusts and would be utterly foolish not to retain the services of an attorney.

 

[Thank_You]

Then you owe fiduciary duties to the beneficiaries of the trusts and would be utterly foolish not to retain the services of an attorney.

Already have more than one attorney who has done work for the trusts.

 

[Zigner]

Already have more than one attorney who has done work for the trusts.

If you had to guess, how much do you think you are actually talking about? I'm not asking down-to-the-penny, but just a roundabout number.
(Most class-actions have a relatively small payout for the average member of the class.)

 

[Zigner]

Note: Assume the payor of the check refuses to reissue the check payable to the irrevocable trust.

Why must one assume that the payor won't issue the check to the trust?

 

[doucar]

Unless the decedent was a named plaintiff in the class action lawsuit, the payout is usually small.

 

[Zigner]

Unless the decedent was a named plaintiff in the class action lawsuit, the payout is usually small.

Yep - wish I'd thought to say that