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I have a decedent who died on June 30, 2007 in the afternoon. I have a trustee that I have to pull teeth, in order to get information from him. He claims that social security benefits and benefits paid by the VA near the beginning of June, had to be returned, because the decedent did not live through midnight of June 30. In this particular case there was auto deposit for the decedent, and the trustee did not give me the July statements.
I know I've seen estates where the decedent died very early in the month and SS benefits had to be returned for that month. I know that I've also had estates where the beneficiary died on the 10th or later, and there is no record that the payment made on the 2nd or 3rd was ever returned.
The social security site has the following on their site:
It of course looks like you must return the benefit for the month the decedent died, no matter if the decedent lived most of the month. However they use a poor example by showing a return of payment that was received for the next month and not the month of death.
Does anybody know for certain that the benefit must be paid back if the decedent dies before midnight on the last day of the month?
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I tried to put the social security paragraph in bold and it didn't print on my post.
Here is the paragraph from Social Security:
If the deceased was receiving Social Security benefits, you must return the benefit received for the month of death or any later months. For example, if the person dies in July, you must return the benefit paid in August. If benefits were paid by direct deposit, contact the bank or other financial institution. Request that any funds received for the month of death or later be returned to Social Security. If the benefits were paid by check, do not cash any checks received for the month in which the person dies or later. Return the checks to Social Security as soon as possible.
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The Social Security 'Question/Answer' website indicates the following:
Social Security benefits are paid in the month following the month for which they are due. For example, if your first benefit qualification bithdate is on August 19, your first month of entitlement is September, and you would receive your first benefit check in October.
The web-site further states that Social Security benefits are not pro-rated. To be entitled to a benefit check for a given month, the person must be alive the entire month. No benefit is payable for the month of death.
In your specific case, the decedent died on June 30 (P.M.). Therefore, the June benefit check does not have to be returned since that benefit was for the May entitlement. However, the July benefit check would have to be returned since it represented the entitlement for the month of June in which the decedent did not survive the entire month of June.
I hope this clears up a very confusing issue for many practitioners.
heh@stoughtoncpa.com
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Thank you for your response.
I made the assumption that payment was made at the beginning of the month for the upcoming month, when in fact you are saying that it is paying for the prior month. Under that definition that makes sense.
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