§ 4-4-405 — Death or incompetence of customer

(a) A payor or collecting
bank's authority to accept, pay, or collect an item or to account for proceeds of its
collection, if otherwise effective, is not rendered ineffective by incompetence of a
customer of either bank existing at the time the item is issued or its collection is
undertaken if the bank does not know of an adjudication of incompetence. Neither
death nor incompetence of a customer revokes the authority to accept, pay, collect,
or account until the bank knows of the fact of death or of an adjudication of
incompetence and has reasonable opportunity to act on it.

(b) Even with knowledge, a bank may for ten days after the date of death pay
or certify checks drawn on or before that date unless ordered to stop payment by a
person claiming an interest in the account.

Legislative History

Source: L. 94: Entire article amended with relocations, p. 900, � 2, effective January 1, 1995. L. 2004: (a) amended, p. 400, � 1, effective July 1.