Answer:
by Randy Carey:
You are not going to find this in the UCC. However, the customer will not be able to provide a proper accounting for the funds under their fiduciary duties and when the beneficiaries of the trust subpoena the bank for copies of all checks cashed by the trustee because he absconded with the funds - what are you going to do - look at every check that you cashed over the last five years? Not cashing checks made payable to a trust should be a Bank policy and there is a reason for it.
Answer:
by Ken Golliher:
As noted, there is nothing in the UCC that says: "If a check is payable to Randy, you cannot allow Ken to cash it." When a check is payable to a trust or any other legal entity the situation is exactly the same, the trust is a different person from the beneficiaries and even the grantor as far as the law is concerned.
What the UCC would do is explain that, by cashing the check for the wrong person, your bank had notice of the breach. Thus, your bank should and would be found liable for any loss to the trust and its other beneficiaries.
print
share