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  1. #1
    Join Date
    Mar 2013
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    1,279

    Default What to Do if an Estate Distribution Check Bounces

    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?

  2. #2
    Join Date
    Mar 2013
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    18,340

    Default Re: Estate Distrubution Check Bounced

    Quote Quoting L-1
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    Has anyone run into this before?
    I'm sure somebody somewhere has but I doubt that knowing that is going to help you.

    Quote Quoting L-1
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    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.

  3. #3
    Join Date
    Nov 2013
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    7,056

    Default Re: Estate Distrubution Check Bounced

    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.

  4. #4
    Join Date
    Jul 2010
    Posts
    8,006

    Default Re: Estate Distrubution Check Bounced

    Quote Quoting budwad
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    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.

  5. #5
    Join Date
    Nov 2013
    Posts
    7,056

    Default Re: Estate Distrubution Check Bounced

    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.

  6. #6
    Join Date
    Mar 2013
    Posts
    1,279

    Default Re: Estate Distrubution Check Bounced

    Quote Quoting budwad
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    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.

    The sun shines, the birds continue to sing and the ocean gently laps upon the shore. Now, all is right with the world.

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