this post was submitted on 27 Sep 2023
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It was a certified cheque. That means the bank has guaranteed that the cheque will clear no matter what. If it were invalidated, the cheque would not clear, violating the guarantee. Cancelling the cheque would call all future guarantees into question.
Given that, the bank was quite willing to issue another cheque. However, they asked that the retiree indemnify the bank for the original cheque should it also get cashed in the future. In other words, if both cheques were cashed, seeing $600k paid out in total, the retiree would be required to pay back $300k of it. The retiree refused.
Ahh, see, this is the kind of thing I figured I was missing. Thanks for the context!
Why was that a certified cheque though? That's literally like sending 300k in cash... by mail.
I typically see those used like when buying a car off Kijiji or Facebook where you can't really trust a random person's check to go through or trust the seller to give you the car when the cheque goes through. Hand over a certified cheque, you're safe to deposit it and hand over the keys.
I don't see how that kind of guarantee was needed to deposit an inheritance cheque. There's plenty of legal ways to approach this if it bounces or whatever.
That's odd. I had my bank issue a certified check to pay a contractor years ago. I forget what happened but they didn't cash it within the expiration period so the bank cancelled it and returned the funds to my account. Generally a certified check just means the bank holds the funds separately from your account until the expiration date or it gets reported as lost or damaged. Or at least that is how my credit union handles them.
Welcome to our American participants.
To reduce confusion, we spell it in a pre-Webster fashion.
Sometimes I like to feel fancy and call them negotiable instruments. Ya know, like trombones on a debate team, but with money.
this is one of the "omelette du fromage"s Americanisms that I always end up spotting, for some reason I take "personal cheques" personally when someone spells it wrong in Canada.
You find it odd that a guarantee with an explicit expiration date was not guaranteed after the expiration...?
I must not be reading your comment correctly.
No, my point is that the bank doesn't need to be indemnified to cancel the first check and issue a second check. A certified check can be reported lost or stolen and reissued without a lot of fuss. It is the bank that holds the money drawn on for a certified account which they take out of your account. They haven't sent it to escrow or something where there is risk of them being out 2x.
No you're understanding is incorrect. There is a big difference between an expired cheque and a reissued cheque.
If I walk into a bank with an expired cheque, they will not honour it, so there is no risk of 2 people cashing the separate cheques. If I walk in with a valid certified cheque, they MUST honour it, even if someone already cashed the reissued cheque.
You are correct that the recipient could wait ~1.5 years for the cheque to expire and then issue a new cheque, but that's a significant delay and the estate likely wants to close its books before then.
Right, I understand the distinction. What I'm saying is that at my credit union, I can report that a certified check has been lost. They have a waiting period of like 5 days and will then reissue the check. I mentioned my experience with the expired check because that is when I spoke to them about it.
Not all certified checks have an expiry date on them.
I imagine it varies depending on the financial institution. Seems crazy though to issue certified checks without an expiration. I don't recall the last time I saw one printed without one, but I don't see many in any given year.
It would be very rare because of the exposure. Another option is that the expiration date was 10 years from now or something similar; not really something an elderly person wants to gamble with.
If it was ever cashed they were on the hook, sure probably no one would be stupid enough to try and put their name on it - but the retiree reasonably didn't want to imagine the risk given all the trauma