Legal Question in Banking Law in California

Re: Money from Unknown Person

First of all, my advice is to return the money. Morally, you aren't sure it's yours. Legally, it's a unique scenario. There are archaic legal principles called trover and conversion which deal with assuming control of property that's not yours. Also, if you currently have (or have had) some sort of contract with this university, a court may find you to be "unjustly enriched" if you did nothing to deserve this money.

But here's my practical explanation:

1. The university has sent you money without any correspondence explaining the payment, but you may be liable for paying the money back if it's a mistake. The university isn't likely to find out whether it's an error until the end of its tax year (which could be December 31 or any other time).

2. Even though the university can't explain why you received the money, you should be more diligent than just "calling." You should go directly to the specific university office that issued the check and even ask to speak to the specific person whose signature is on the check. Be EXTREMELY diligent before doing anything with this money.

3. After speaking to the highest person on the university financial accounting ladder, if you still can't get any answers then you should probably return the money anyway. MY ADVICE IS TO RETURN IT REGARDLESS, BUT ...

If you decide to keep it, you should put it in a safe, high liquidity tax-deferred vehicle for at least one full year. That way, if the university finds a financial error in its yearly tax report and asks you to give back the money, then you can refund it easily. The advantage is that you'll be earning interest in the meantime.

If you decide to keep it (which I suggest you don't do), then call me regarding how to best preserve this money and earn interest until the situation is resolved.

In addition to being an independent attorney, I work in private client banking (wealth management) in Beverly Hills.

BUT, you asked for LEGAL advice, not FINANCIAL advice so ... RETURN THE MONEY!:-)

Re: Money from Unknown Person

You may cash the check and put it in an account that you cannot touch (i.e. a trust account). If you are concerned about the temptation, you can deposit it in your attorney's trust account. You must hold the money for five years. After 5 years, the statute of limitations has expired and you may enjoy the money.

Re: Money from Unknown Person

your factual circumstances sound quite "unique"

to say the least. if you have no idea "why" you were issued such a payment from this university and no one from the school has assisted you in such a determination to date, you definitely should continue in pursuing the "reasoning" before you even consider cashing it for personal use. you definitely do not want this possible "mistake" to come back and haunt you in the future at some point. your best bet right now would be to consult with an attorney regarding what you should do with the check in the meantime and/or further assist you in getting "straight answers" from the university regarding its issuance to you. if you would like a free phone consultation, email us with your direct contact information today.