Checks Given By Decedent With Intent To Make Gift

If a person signs a check with a recipient's (donee's) name, intending to make a gift, and then the donor (the person who wrote the check) dies before the check is deposited, is the gift effective?

Answer: Normally no. If a check is not paid during the donor's lifetime, it generally does not constitute a valid gift of the funds it represents, even if the check was presented for payment prior to the donor's death. (See 38 Am. Jur. 2d Gifts Section 60.) The reason is that a completed gift requires not only intend (which arguably exists) but also delivery. Complete delivery does not occur until the funds are actually transferred. If the donee cashes the check before the donor's death, then there would be a completed delivery and thus a completed gift.

If the check were certified (a cashier's check), then the delivery to the recipient (donee) would be completed.

The result is that if recipient does not receive the funds from the check until after the drawer's (person who wrote the check) death, that person will be required to return the funds to the deceased person's estate.

I hope this information is helpful. Paul Deloughery
(You can contact me directly by email at paul@delougherylaw.com or phone at 602-443-4888. For more information, visit www.delougherylaw.com)

The information in this blog is general in nature and is not intended to address any particular situation.