Does a Bank Have to Return Money to an Estate that it Let the Wrong Person Withdraw?

Robert Ray

In two recent cases in the San Antonio area, the Texas Supreme Court was asked to decide if two banks were required to return money to an estate that the banks had paid out to a person with fraudulent papers. The facts were that a former county employee who worked in the probate section of the county clerk’s office stole a stamp that the clerk used to stamp Letters Testamentary or Letters of Administration. When the employee would learn that someone had died intestate, he would prepare forged Letters of Administration and seal them with the stolen seal. The forged documents listed the employee as the duly appointed Administrator of the estate. He would then go the the bank, present his letters and gain control of the accounts.

In both cases, the Supreme Court held that the banks were liable to the estates if the estates took prompt action. The Court ruled  for the bank in one of the cases and for the estate in the other. The rulings were based on procedural matters rather than the obligations of the bank to return the money. The Court explained the obligation that the bank has to the estate to return the money to the estate even if the bank was also a victim of a fraud. Because the Court decided both of the cases on procedural matters and how quickly claims were made against the banks, it is important that an estate take action as soon as it is aware of any suspicious activities involving the estate’s bank accounts. 08-0908, Federal Deposit Insurance Corp. v. Christa C. Lenk

Copyright by Robert Ray a Texas inheritance attorney. The foregoing information is general in nature and does not apply to every fact situation. If you are concerned about inheritance laws, inheritance rights, have a family inheritance dispute, a property dispute or want information about contesting a will and need an inheritance lawyer, we can help. Please go to our main site and use the contact form to contact us today. We are Texas inheritance lawyers and would love to learn about your case and there is no fee for the initial consultation.


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Robert Ray

Robert Ray handles inheritance disputes of all kinds. He takes cases throughout Texas.
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