Terri, you are correct in that you have an incomplete gift and thus the amount would be included in the decedents estate.

Off the top of my head and one of the other members may have a different take, the gift may be incomplete but you still have a transfer by the decedent to the payee of the check. The proceeds shouldn't be added to either trust but considered a pecuniary testamentary transfer to the payee. If it isn't the spouse, which it doesn't appear to be, it is subject to estate tax. Beacuse of this it would reduce the amount going into your bypass trust.