Mama Texas has three children: (a) Bevo, (b) Reveille, and (c) Masked Rider.
Mama Texas passed away and her only assets were bank accounts.
Mama Texas intended for all her assets to be payable to her three sons in equal shares so she had set up Pay on Death instructions on her account so each account paid equally to each of her sons following her death.
The sons presented a death certificate to each bank and got their one third share of Mama Texas’ accounts.
However, several months later the nursing home issues a refund check payable to Estate of Mama Texas. The nursing home declines to reissue the check under any other name.
How can the children cash the check?
Nursing Home’s Concerns
The nursing home is not necessarily trying to be unreasonable.
If the nursing home does not know the children of Mama Texas from Cain, it does not want to get in the middle of figuring out who Mama Texas wanted to leave her nursing home refund.
Possible concerns of the nursing home:
1. How do I know what the sons are telling me is true?
2. What if there are other family members involved I do not know?
3. What if I pay the refund to the sons and then unknown disgruntled family members show up and sue me for paying the refund to the wrong person?
Overview of Solutions
We’ll give a brief overview of common solutions for cashing a check payable to an estate.
Please note that depending on the size of the check from the nursing home, the cost of some of these solutions may outweigh the amount of the check from the nursing home.
If Mama Texas Has a Will
If Mama has a Will and the Will is valid, you can go through the probate court process.
Probate is the process where a court signs an order declaring a Will is valid and appointing an Executor with signing authority to sign for assets in the name of the Decedent.
In our example, if Bevo Texas is named under the Will as Executor, he would have court authority to open an estate checking account once a judge signs an order declaring the Will valid.
Bevo Texas would take the following items to a local bank to open an estate checking account:
1. Letters Testamentary (issued after judge signs order declaring Will valid)
2. Death Certificate
3. Estate EIN (tax ID for Mama’s estate)
The estate checking account would read:
Estate of Mama Texas,
Bevo Texas, Executor
Result: this checking account can receive checks payable to Estate of Mama Texas AND Bevo would have authority to sign for this estate checking account in his capacity as Executor for Mama Texas’ estate.
In Travis County, Texas, the probate court process requires an attorney.
If you Google for Travis County Probate Court, you can find several PDFs with very helpful guidance from the court.
In particular, their PDF, CHECK 10 KEY POINTS IN THE WILL gives an idea of common problems a Will may have such as:
1. Not having an original Will
2. Not having a self-proving affidavit in the Will
3. Possible options if the Will does not have 2 witness signatures
4. Possible options if the Will does not have a self-proving affidavit.
Estimated budget for a valid Will with no problems, with rounded figures:
1. Initial filing fees, $350
2. Subsequent filing fees, $50
3. Required newspaper notice to creditors, $200
4. Attorney’s fees – varies by attorney
Your attorney will help you with the other requirements as Executor such as filing an inventory of Mother’s assets and sending notices to each of the beneficiaries who receive under Mama’s Will.
Your bank may also accept another probate procedure called Muniment of Title which is slightly less expensive because it does not require a newspaper notice to creditors but is outside the scope of this article.
If Mama Texas Does NOT Have a Will
If Mama Texas does NOT have a Will you generally have two options:
1. Small Estates Affidavit
2. Determination of Heirship
A Small Estates Affidavit is a form that you submit to the court. It has NUMEROUS requirements and if you do not fill out the form correctly you will still be out of pocket the filing fees for the form.
The Travis County Probate Court has a VERY helpful SMALL ESTATE AFFIDAVIT CHECKLIST that I personally review when I am considering a small estates affidavit.
We’ll finish off this discussion in the next blog post!
I hope this has been helpful! If you are looking for personalized advice to your specific situation, please feel free to contact us to see if we can help!