Proceeds: Check-Writing Procedures for Closings

General Rule: For all ATG transactions, the proceeds check should be made payable to the seller as shown on the title commitment.


Multiple Sellers: For a transaction that has multiple sellers, the proceeds check should be made payable to all sellers. In some instances with a valid reason, ATG, upon written direction from all sellers, may issue a separate check to each seller. Be sure to plan for this well in advance of closing, since obtaining original signatures from the sellers at the closing table could be difficult or time-consuming.


Living Trust as Seller:

[Example: Jane Miller, as Trustee of the Jane Miller Living Trust]

For a trustee who is the trustee of his/her own trust, ATG will allow the proceeds to be issued to the individual, provided ATG has written directions from the trustee to do this. Without written direction, ATG will issue the check to the trustee of the trust.


[Example: Jane Doe, as trustee of the John Miller Living Trust]

For a trustee who is the trustee of someone else’s living trust, the seller should already have a bank account opened in the name of the trust in order to be able to deposit the proceeds check into that account. ATG requires the proceeds check to be made payable to the trustee of the living trust. ATG does not pay individuals when the seller is a trust for two reasons: (a) a trustee has a non-delegable fiduciary duty to the beneficiaries of the living trust; and (b) ATG wants to make sure that the proceeds are properly distributed to the trust for the benefit of all beneficiaries in that trust.


Land Trusts as Sellers: Upon written direction of the trust administrator, the proceeds check may be made payable to the payee or payees designated by the land trustee.


Corporations or LLCs as Sellers: Proceeds check should be made payable to the corporation or the LLC.


Partnership as Seller: Proceeds check should be made payable to the name of the partnership.


Husband and Wife Sellers During or Following Marriage Dissolution: Both husband and wife should give direction, in writing, directing ATG as to what amounts to issue the proceeds check and  who the payees should be. If ATG is directed to split the proceeds into two different checks, the payees will be both spouses or ex-spouses in most cases. While a divorce decree may direct how the proceeds are to be split, a divorce decree is not necessarily binding on a title company. The parties are able to agree to some other arrangement as long as it is in writing and signed by both parties.


Paying Bills from Proceeds: ATG does not split proceeds checks in order to pay various bills of the sellers. Occasionally, on a second transaction, the sellers may be required by a lender to pay certain bills. To facilitate this, ATG requires written authorization from that lender directing what needs to be paid off; this must also be disclosed on the HUD-1 Settlement Statement.


Proceeds Check Used for Buyer’s Incoming Funds on a Subsequent Transaction: Upon written direction from a seller or sellers that are attending a subsequent closing wherein they are then the buyers, ATG is willing to issue a proceeds check made payable to the title company in the second transaction, since the Illinois Good Funds law allows incoming funds to be in the form of a title company check.


If you have any questions about these procedures, please contact the Underwriting Department at 800.252.0402, ext. 2020, 312.752.1990, or


Posted on: Wed, 03/06/2013 - 2:43pm