Social Security After Death

09/21/2016

When an individual passes away, family members often ask me, “do I have to do anything about Social Security?” 

Here are some points to consider if a decedent was receiving Social Security benefits at the time of passing: 

Reporting Requirements. 

Normally the funeral director will contact the Social Security Administration to report a person’s death if you give the decedent’s social security number to the funeral director.  However, family members as well as the personal representative of the decedent’s estate can also report the information directly to the Social Security Administration by calling 1-800-772-1213.  The most important thing is to make sure the Social Security Administration’s records reflect the correct information. 

Survivor Benefits. 

Surviving spouses (and in some cases ex-spouses) and children are entitled to different types of survivor benefits: 

Here are some rules to consider: 

  • If you are already receiving social security benefits on behalf of a decedent, you are eligible for: 
    • A one-time survivor benefit of $255 (surviving spouse or children), which can be automatically processed;
    • Continuation of benefits – Payments should be automatically changed to survivor benefits.  That is, no new application is required for benefits and you do not need to go to a local Social Security office. 
  • If you are not receiving social security benefits on behalf of a decedent and/or you are receiving your own benefits, you are eligible for: 
    • A one-time survivor benefit of $255 (surviving spouse or children), which must be applied for within 2 years of death and is NOT retroactive;
    • New survivor benefits – You need to submit an application to the local Social Security Administration office.  You will need to go to the local Social Security Administration office and take a certified copy of the death certificate as well as proof of your relation to the decedent (e.g. your birth certificate, marriage certificate).  You might be able to make the application over the phone but this can be a long, slow process; Social Security Administration calls are often answered by volunteers who pass along your contact information to a representative for call back later.  Whether you apply in person or over the phone, be sure to have your banking information available if you want the benefits direct deposited. 

Decedent Benefits and Reclamation

It’s just one week after the decedent’s passing and you notice that the decedent’s checking account reflects a direct deposit of a social security payment after the decedent died.  Now what? 

Security payments are: 

  • Retroactive, i.e. a payment made in August represents the benefit due for July;
  • Paid on specific days of the month according to a person’s birthdate and/or the types of benefits received;
  • Not pro-rated, in other words, a person is only entitled to the monthly benefit only if she was alive for the full month;
  • Subject to automatic reclaim. Monthly benefits that are direct-deposited to a decedent’s bank account will be automatically reclaimed if the Treasury Department determines the decedent was ineligible for the benefit. 

Example 1:

Mom died July 15, 2016.  Social security payment was deposited August 2, 2016.  Mom did not live for the full month of July, so the payment will be auto-reclaimed.  If by chance you’ve acted quickly enough to close the account and withdraw the funds prior to the Treasury reclaiming the benefit, you cannot keep the money. Mom was not entitled to the benefit and the government will want it back. You will need to reimburse the government via check sent to your local Social Security office. 

Example 2:

Mom died August 10, 2016.  Social security payment was deposited August 2, 2016. Mom lived for the full month of July so the payment can be kept.  If a deposit is made in September (representing the August benefit), the September payment will be reclaimed because Mom did not live for the full month of August.