If an employee dies without a will, here’s what to do with their last paycheck

Q           We have an employee who recently passed away. He wasn’t married, didn’t have a will, and didn’t have company life insurance or death benefits. How do we handle his final paycheck? Do we continue with our regular payroll procedures, should we wait for the beneficiary for his estate to be identified, or something else?

When considering what to do with a deceased employee’s last paycheck, you must consider the laws of your state. In some states, the final wages may be claimed directly by a spouse. Because your employee wasn’t married, the best practice would be to pay the wages to the deceased employee’s estate.

The estate is administered by a personal representative or executor. The powers and duties of a personal representative or executor may vary by state, but their goal is identical: to administer the estate and resolve all outstanding issues for the deceased employee.

The personal representative will petition the court to open an estate. This isn’t always a speedy process, so it’s likely the funds owed to a deceased person will be held by your company until an estate has been opened. Some states provide specific requirements for the timeline in which to pay funds owed to the survivors or an estate. Most states don’t have clear timelines. Therefore, it’s wise to speak with local counsel to determine what timelines you may be bound to follow.