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What if a beneificary of a trust refuses to cash checks that have been sent to him?
Anonymous3 views3 answers
I am the the trustee of my father's trust. One of my brothers has refused to cash two checks that were sent to him as a beneficiary of the trust. I know he has received them as they were sent with tracking numbers from both the US POst Office and Fedex. The 1st was sent last October, a replacement was sent in June of this year along with another check that represented the final disbursement of the trust. I want to close the trust bank account but am worried what my legal responsibilities are to get the money to my brother.
Your duty as trustee is to tender payment to the beneficiary.
Is there a reason he does not cash the checks? e.g. no bank account?
If he does not want the money, he may be able to "disclaim" the gift of money, and then it would go to others according to the terms of the trust.
After what I think is three years, you may deliver the funds to the state of California as an unclaimed account in his name. You could check on this to be sure.
As a lawyer, this is what I would do: As trustee, file a petition in the probate court for instructions under PC 17200, serve brother with the papers, and ask the court for permission to distribute the money to the other beneficiaries according to the terms of the trust because brother will not accept the money. If brother does not show up in court, the judgeshould grant the request, and the other beneficiaries will get the $.
You could issue a cashier's check to your brother which would take the money out of the bank account. Then send him the check certified return receipt requested. He will have 6 months to cash the check. You can close the account because there will be no funds left in the account. The bank will then deal with him not cashing the check.
Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.
Interesting question that I have not had come up previously. I do think you have received two good responses prior to this one. I would recommend that you file a petition with the court asking for the court's instructions unless it is a very small amount of money.
You appear not to have spoken with your brother and you have not explained why he is not cashing the checks.
I wish you good luck!
