Generally, a check made out to an estate should be deposited only into an estate account, and depositing the check into a trust account could result in a breach of the Uniform Commercial Code (UCC) warranties. We do not recommend accepting checks payable to the deceased customer’s estate for deposit into the new trust account, unless your bank can confirm that the individual serving as successor trustee has authority to endorse on behalf of your customer’s estate and properly endorses the checks for deposit into the new trust account.

When delivering a check to the payor bank for payment, the UCC requires your bank to warrant that the check was paid to the payee or to the payee’s account. Your bank could be viewed as breaching that warranty if you deposit a check into an account that does not belong to the payee, which would be the deceased customer’s estate — not the successor trustee’s new trust account. This concern is particularly pronounced in the context of a probate estate, where there could be some question as to whether the funds belonging to the estate were properly distributed.

Additionally, the UCC requires your bank to warrant that a check does not have any missing endorsements. Consequently, your bank should ensure that the successor trustee has authority to endorse a check on behalf of the deceased customer’s estate. The successor trustee may have authority — for example, as an executor or administrator of the estate — but not necessarily in their capacity as successor trustee.

For resources related to our guidance, please see:

• Illinois UCC, 810 ILCS 5/4-205(2) (“If a customer delivers an item to a depositary bank for collection: . . . (2) the depositary bank warrants to collecting banks, the payor bank or other payor, and the drawer that the amount of the item was paid to the customer or deposited to the customer’s account.”)

• UCC, 810 ILCS 5/3-417(a)(1) and 810 ILCS 5/4-208(a)(1) (“Presentment warranties. (a) If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft, (i) the person obtaining payment or acceptance, at the time of presentment, and (ii) a previous transferor of the draft, at the time of transfer, warrant to the drawee making payment or accepting the draft in good faith that: (1) the warrantor is or was, at the time the warrantor transferred the draft, a person entitled to enforce the draft or authorized to obtain payment or acceptance of the draft on behalf of a person entitled to enforce the draft. . . .”)

• UCC § 3-417 cmt. 2 (“Subsection (a)(1) in effect is a warranty that there are no unauthorized or missing indorsements.”)