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Dealing With Social Security and Final Benefits & Expenses

In May the Inspector General of the Social Security Administration reported that the government continued to pay benefits to over 182,000 people previously reported as deceased. It’s only a small percentage of the estimated 2.5 million deaths reported to the SSA each year, but it shows how even death can become lost in the bureaucracy. If you’re on the other end–as the executor or administrator of a deceased loved one’s estate–it’s equally important you understand the law as it relates to “last” benefits.

Social Security and Pension Benefits After Death
Let’s say your widowed, elderly mother recently died. She was receiving Social Security and her monthly check came in a few days after her death. Can you cash the check? No. Under the Social Security Act, the federal law governing benefits, a person must be alive for the entire month covered by the check. So if you’re mother normally received her check on the 15th of the month and she died on the 12th, you must return the check. Likewise, if Social Security direct deposited your mother’s benefit into her bank account, the government will instruct the bank to debit her account to reverse the transaction.

Keep in mind, other benefits your mother received, such as a pension from a private employer, may prorate payments for the month of her death. You’ll need to contact the pension plan administrator. And if your mother was still working at the time of her death, she would be entitled to a final paycheck and, in many cases, a lump-sum payment for any accrued benefits earned. Again, that is something you will need to check with the specific employer.

Dealing With Final Rent and Related Bills
On the other side of the equation, if your mother had any regular outstanding utility bills, those charges may also be prorated to exclude the days of the month following her death. Rent is a different story. Under California law, if your mother had a month-to-month lease on her apartment, her tenancy would automatically terminate 30 days after the last rent payment she made before death. You would not have to provide any further notice to the landlord. However, if your mother had a lease with a specified term, like a year, her estate would be responsible for fulfilling the full term. That means if you’re executor of your mother’s estate, you would have to make arrangements with the landlord.

What About Credit Cards?
If your mother had unpaid credit card bills, that debt transfers to the estate and not you or her other heirs. As executor, you would publish a notice to any creditors to present their claims against the estate within a certain time period. If the estate doesn’t have sufficient assets to cover the debts, the credit card companies may not get paid in full or at all. In many cases, if you notify a creditor that the estate is insolvent, they will decline to even pursue a claim.

Be Prepared
These are just a few of the hundreds of details that arise after a person’s death. That’s why it’s important to get your affairs in order before a loved one has to sort through your final bills and payments. A qualified San Diego probate attorney can walk you through all the details involved in preparing your future executor for his or her role in managing your affairs. Contact the Law Office of Scott C. Soady in San Diego today at 1-877-435-7411.

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