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Question on Reporting Death to Social Security

When you report the death of a person to Social Security, is Social Security able to retrieve any payments made by ACH - after the date of death - to the person's bank account? If not, then would a bank have an internal procedure to automatically refund those surplus payments to Social Security?

The concern is the bank account might need to go through a probate process, which might further delay return of funds to Social Security. In the worst scenario, the bank fails to return the funds timely, but reports the death to Social Security. This creates the worst possible situation, where the funds are locked up and Social Security also wants the funds back. What is the best way to speed up return of the funds to Social Security?

Reply to
P
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This isn't exactly a tax question, but (1) SSA can recover money from the account, and (2) only has a claim against the person or her estate, and cannot legally go after other individuals until the estate closes.

Reply to
Arthur Rubin

My understanding of the system is: The Treasury department upon notification from Social Security, will request the funds to be returned via EFT. The bank must return the funds. If there aren't enough funds in the account, the bank sends the partial payment and provides the Treasury the name and address of the entity that made the last withdrawal. If no funds are available (account is empty or closed), the bank has 30 days to return the request with the name and address of the entity that made the last withdrawal. Failure to respond in 30 days will trigger another 30 day letter from the Treasury. Failure to respond within that 30 day period allows the Treasury to debit the bank's account through the Federal Reserve System.

Reply to
Alan

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