Gary writes a check drawn on Hilltop Bank for $400 "payable to Ivan" on May 1. Gary dies on May 3. Ivan presents the check to the bank on May 5. Unaware of Gary's death, the bank
A) may pay the check.
B) must consult with Gary's heirs before paying the check.
C) must certify the check.
D) can do nothing until Ivan claims an interest in the account.

Question

Gary writes a check drawn on Hilltop Bank for $400 "payable to Ivan" on May 1. Gary dies on May 3. Ivan presents the check to the bank on May 5. Unaware of Gary's death, the bank​
A) ​may pay the check.
B) ​must consult with Gary's heirs before paying the check.
C) ​must certify the check.
D) ​can do nothing until Ivan claims an interest in the account.

Quizplus · Accepted Answer

A check becomes a negotiable instrument once it has been written and signed by the drawer. The bank has no way of knowing if the drawer is deceased unless the account is flagged or frozen due to a request from the executor of the estate or a court order. As Ivan is the payee and the check was written before Gary's death, the bank will likely pay the check.

Gary Writes a Check Drawn on Hilltop Bank for $400