This regulation defines when an RDFI has actual or constructive knowledge of the death:

An RDFI has actual knowledge of the death or legal incapacity of a recipient or the death of a beneficiary when it receives information, through whatever means, that the recipient has died and has had a reasonable opportunity to act on such information. An RDFI has constructive knowledge if the institution would have learned of the death if it had followed commercially reasonable business practices. [31 CFR Part 210.2(b)]

The phrase "commercially reasonable business practices" is a flexible concept since, for example, what is a commercially reasonable practice for a large bank may not be commercially reasonable for a small rural bank, and vice versa.

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