What to Do if an Estate Distribution Check Bounces

[L-1]

My question involves estate proceedings in the state of: California

A friend died several months ago. She had a living trust that named her nephew as Trustee. He has been administering the trust with the assistance of an attorney. I am named as someone who is to receive 10% of the proceeds of the trust.

A few months after my friend's passing, I received a letter from the attorney, on behalf of the Trustee, giving an accounting of the Trust's assets which were close to $2 million dollars. The other day I received a second letter from the attorney, on behalf of the Trustee, containing a check for $75,000 as a preliminary distribution from the trust. The check was dated 12 days earlier, signed by the Trustee (not the attorney) and drawn on the trust account. When I attempted to deposit the check at my bank (which also hosts the trust account) it was declined due to insufficient funds.

I have faxed a letter to the attorney who is assisting the Trustee, advising him of the issue, but have yet to receive a reply. Has anyone run into this before? Any advice on my next step if the Trustee has misappropriated the money?

[adjusterjack]

Has anyone run into this before?

I'm sure somebody somewhere has but I doubt that knowing that is going to help you.

Any advice on my next step if the Trustee has misappropriated the money?

For $75,000 I think it would make sense to hire your own attorney.

[budwad]

I wouldn't get too upset just yet. Just because the trust is valued at $2 million doesn't mean that all that is sitting in a bank account as cash.

[free9man]

I wouldn't get too upset just yet. Just because the trust is valued at $2 million doesn't mean that all that is sitting in a bank account as cash.

Yeah but they shouldn't be writing $75,000 checks without making sure there is $75,000 in the account to cover it.

[budwad]

No doubt. But OP may not be the only one to get a check and maybe assets were liquidated but not transferred. I'm just saying that there may not be any misappropriation of the funds. I'd wait to hear from the trust attorney before jumping to that conclusion.

[L-1]

I wouldn't get too upset just yet. Just because the trust is valued at $2 million doesn't mean that all that is sitting in a bank account as cash.

I agree. There is still real estate to be liquidated, so there should be more to some down the line.

I got a call this morning from a rather embarrassed Trustee. (I assume the attorney called him after receiving my fax.)

He says the funds were in the Trust's savings account and had not been transferred to the checking account. He assumed overdraft protection in checking would automatically draw from savings. In any case, he indicated the funds had now been moved to checking and the check was good. I'll give it a day for the funds to be credited, try to deposit the check tomorrow and see what happens.

As a follow up, the check was redeposited. The Trustee's word was good and funds were made available to cover payment.

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