There was a huge debacle this year with the stimulus checks. The government sent out quite a few checks made out to a deceased person. Family members were distraught because of the unexpected reminders of their loved one. Moreover, they were confused by what to do with these checks. Stimulus checks are different from other checks, but it made many people start to wonder: How do I deposit a check made out to a dead person?
Is It Illegal to Deposit a Check Made Out to a Deceased Person?
In the case of stimulus checks, the deceased individuals weren’t supposed to get that money. Therefore, people were supposed to give that money back if they received it.
However, it’s not always illegal to deposit a check made out to a deceased person. There are instances in which it is perfectly legal. However, in most instances, you must deposit the check into an estate account.
In other words, you can’t just take a check made out to a deceased person and deposit it into a regular bank account. An individual bank account isn’t the appropriate place for those funds. But the money often does belong to the dead person’s estate. Therefore, the estate account is allowed to take the deposit.
What to Do With a Check Made Out to a Deceased Person
So, you’ve received a check and aren’t sure what to do with it. You or your family would really benefit from making use of that money. However, you can’t just deposit it into your account. So, now what?
Become the Executor of the Estate
Not just anyone has permission to deal with the estate of a deceased person. Therefore, you need to go through the process to become named the executor of the person’s estate. Usually the will names this person.
If it wasn’t, though, then you can go through the probate court system. They can issue you a letter allowing you to open an estate account. They do so after naming you the administrator of the estate.
Get an EIN
Interestingly, you then need to get an Employer Identification Number. You get this through the IRS. Essentially, you’re the boss of the account.
As a side note, if you’re the one handling the finances of the estate, then you might also have to deal with the dead person’s final year of taxes. The IRS offers additional information about that here.
Get an Estate Account
Finally, you need to set up that estate account.
It’s often easiest to do so at the bank where the deceased person held an account before their death. However, you can set one up at any bank. The estate account can be a savings or checking account.
As the administrator or executor of the estate, you’ll be able to deposit a check made out to a deceased person into that account. You’ll also be able to make withdrawals. However, each bank establishes rules around this, so make sure that you read the account terms carefully.
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Kathryn Vercillo is a professional writer with more than a decade of experience writing about healthy living and personal finance. She lives in San Francisco, where she has learned to maximize frugal living tips in order to thrive as a freelancer in one of the nation’s most expensive cities. When she’s not writing, she’s exploring the city on foot with her rescue dog. Learn more about her at www.kathrynvercillo.com. Kathryn also writes about saving money with coupons over at GroceryCouponGuide.com .