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IT’S IMPORTANT TO BE familiar with what happens with Social Security benefits when someone dies. Otherwise, you may find yourself in a long, painstaking battle to get the payment to which your loved one was entitled. I found this out the hard way.
My father-in-law Bernard died in September 2015. My wife was his executor and the agent under his power of attorney (POA). But I’d earlier served as POA and executor for my mother, so I handled Bernard’s estate as well, except for signing documents.
The Social Security rules relevant to this situation are as follows. First, the check you receive in any given month represents the benefit for the previous month. Second, you don’t receive a benefit for the month in which you die. You will, however, receive a payment in the month you die, since that payment is for the previous month. Your estate can keep that payment.
I wasn’t clear on these rules, which led to much frustration and gnashing of teeth.
Bernard died in September, and he received a payment that month—which was the payment for August. On Oct. 2, when Bernard would normally have received a direct-deposited Social Security payment for September, he didn’t get a payment, as Social Security had been notified of his death, presumably by the funeral home.
On Oct. 9, we received a letter saying Bernard “is not entitled to monthly benefits beginning September 2015.” It also said, “Since we did not stop [Bernard]’s payments until October 2015, he was paid $2,041.20 too much in benefits.” The letter concluded: “You should refund this overpayment within 30 days.”
This was incorrect. The payment for September would have been received in early October, and Social Security didn’t send an October payment. I didn’t catch that error at the time. Instead, I did what the letter requested and sent a check on Oct. 10.
On Oct. 11, we received another letter from Social Security saying, “Since we were able to stop [Bernard]’s October 2, 2015 payment for $2,041.20, he no longer owes us any money.”
Okay, I thought, Social Security won’t cash the check.
No such luck.
On Nov. 10, Social Security deposited the check, so it now owed us $2,041.20. In the months that followed, we called 10 times to try to get this resolved. Each time, we had to wait to get someone on the line, and each time we explained the whole sequence of events. We were assured they were “submitting an action” and to check back in two weeks or a month. Finally, on Aug. 9, 2016, we got a check. This was just in time to close Bernard’s estate before the one-year deadline, after which we would have had to pay for an extension. The rest of the estate had long been settled.
The lesson: If you get a notice from Social Security demanding money back, make sure you really owe money, because it’s hell to get Social Security to correct its errors after it has your money. In this case, if I’d carefully examined the letter it sent or just waited a couple of days, I could have avoided a seemingly endless hassle.
Thanks Brian. A very timely article because I’m going through that now. My mother passed away last month and I’ve already received the SS letter stating they are recovering her October payment due to her death but haven’t received one yet saying her estate owes them. Also, the payment from them upon death, I understand to simply be a death benefit. Any more letters I’ll just sit on for a few weeks until the dust settles. Rich
Good plan.
Sorry to read about your experience, Brian, but even sorrier to learn that this exact mistake by the Social Security Administration happens to others as it did to me. I described my experience in a comment last week to another article and previously. In my case, I knew the timing of the payment, so when my husband’s direct deposit was mistakenly reclaimed from his bank account, I knew it was a mistake right away. It took two months for them to refund his last check. I was able to get people on the phone without too big a hassle. Since the calls were made in the immediate aftermath of his death, they also had to listen to me cry.