Social Security Issue

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Topic Author
Prudence
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Joined: Fri Mar 09, 2012 4:55 pm

Social Security Issue

Post by Prudence »

My DW's sister passed at age 69 of Covid-19 on April 29. SIL died without a will and she lived alone in a small apartment. Funeral home expenses were incurred and paid. Yesterday my DW was informed by her brother that SIL had a debt to SSA that was being paid off gradually by a reduction to the monthly check DIL received from SSA. SIL had been receiving SS disability benefits for many years (decades). There was a period many years ago when SIL took a consulting job and earned too much money to be eligible for the disability income. SSA and SIL worked out an arrangement to pay off the overpayment over time with a reduction to her benefit check. At the time of her death, SIL had few assets of little value: cash in a bank account, old furniture, TV, jewelry, very old car in bad condition. (There could be other outstanding bills or creditors that may come forward over the next few months; at this time, DW is only aware of SIL's rent which was paid at the time of her death). DW and BIL had arranged to keep the apartment in May and June while they clear out the apartment, so, there is that expense. SIL had designated BIL the "Payee" for her SS disability payments. A couple of days ago, BIL received a letter from SSA requesting $25,000, the unpaid balance of the money due it. My DW knew nothing about the money that SIL owed SSA. SIL, DW and I live in Maryland, BIL in Pennsylvania.
Questions:
1. What happens when there is no will or named Personal Representative? Will county appoint a PR (DW or BIL)?
2. The $25,000 owed SSA plus the funeral home expense and other post-death miscellaneous expenses (e.g. cleaning out the apartment, hauling away furniture etc.) is substantially more than the value of SIL's assets. What money, if any, will DW and BIL owe SSA out of their own pockets?
3. Is DW or BIL obligated to pay off the balance of the money owed SSA?
4. Can the post-death expenses (funeral home, rent, cleaning and disposition, any other claims unknown at the time) be charged to SIL's estate (so DW and BIL are not responsible)?
5. If county or judge appoints an attorney for SIL's estate, can that expense be charged to estate?
6. Please provide any other advice or suggestions.
neilpilot
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Location: Memphis area

Re: Social Security Issue

Post by neilpilot »

I'll let others attempt to answer your various questions, but regarding:
3. Is DW or BIL obligated to pay off the balance of the money owed SSA?
I can't see any basis whereby either would have any liability for their sister's debts. The sister's estate would be liable, but why would liability extend to her non-marital relatives?
trueblueky
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Re: Social Security Issue

Post by trueblueky »

Prudence wrote: Mon May 18, 2020 8:25 am My DW's sister passed at age 69 of Covid-19 on April 29. SIL died without a will and she lived alone in a small apartment. Funeral home expenses were incurred and paid. Yesterday my DW was informed by her brother that SIL had a debt to SSA that was being paid off gradually by a reduction to the monthly check DIL received from SSA. SIL had been receiving SS disability benefits for many years (decades). There was a period many years ago when SIL took a consulting job and earned too much money to be eligible for the disability income. SSA and SIL worked out an arrangement to pay off the overpayment over time with a reduction to her benefit check. At the time of her death, SIL had few assets of little value: cash in a bank account, old furniture, TV, jewelry, very old car in bad condition. (There could be other outstanding bills or creditors that may come forward over the next few months; at this time, DW is only aware of SIL's rent which was paid at the time of her death). DW and BIL had arranged to keep the apartment in May and June while they clear out the apartment, so, there is that expense. SIL had designated BIL the "Payee" for her SS disability payments. A couple of days ago, BIL received a letter from SSA requesting $25,000, the unpaid balance of the money due it. My DW knew nothing about the money that SIL owed SSA. SIL, DW and I live in Maryland, BIL in Pennsylvania.
Questions:
1. What happens when there is no will or named Personal Representative? Will county appoint a PR (DW or BIL)?
This is state-specific. Why would either want the job?
2. The $25,000 owed SSA plus the funeral home expense and other post-death miscellaneous expenses (e.g. cleaning out the apartment, hauling away furniture etc.) is substantially more than the value of SIL's assets. What money, if any, will DW and BIL owe SSA out of their own pockets?
None.
3. Is DW or BIL obligated to pay off the balance of the money owed SSA?
No. The final SS check may need to be returned.
4. Can the post-death expenses (funeral home, rent, cleaning and disposition, any other claims unknown at the time) be charged to SIL's estate (so DW and BIL are not responsible)?
5. If county or judge appoints an attorney for SIL's estate, can that expense be charged to estate?
6. Please provide any other advice or suggestions.
My state has an order of precedence on who gets paid first if there is not enough money to pay all debts. PA likely has something similar.
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Sandi_k
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Re: Social Security Issue

Post by Sandi_k »

IF BIL was married to your wife's sister, there may be joint assets that can be claimed. Please clarify if BIL was married to your wife's sister.
JGoneRiding
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Re: Social Security Issue

Post by JGoneRiding »

Wife will only owe for what she feels like paying. I personally might see they were buried properly.
The rent they will have to pay if they asked the landlord to extend the lease otherwise they should have been out in 30 days.

Funeral expenses and then last hospital usually take precedence for being paid. But to get that money you would need to file as pr and put in as a small estate.

I am a pr currently. I guarantee in this situation I would stay far far away. I would take care of personal effects and catalog everything of potential value. Iw ould hold a garage sale and then wait to see if anyone shows up to claim the funds.
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Mlm
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Re: Social Security Issue

Post by Mlm »

A Social Security Representative Payee can not be held responsible for the overpayment if they were not the representative at the time of the overpayment. If this is the case reply to SS that they were not the Rep at that time and enclose a copy of the Representative Payee approval letter.
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CAsage
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Re: Social Security Issue

Post by CAsage »

Prudence wrote: Mon May 18, 2020 8:25 am 2. The $25,000 owed SSA plus the funeral home expense and other post-death miscellaneous expenses (e.g. cleaning out the apartment, hauling away furniture etc.) is substantially more than the value of SIL's assets. What money, if any, will DW and BIL owe SSA out of their own pockets?
4. Can the post-death expenses (funeral home, rent, cleaning and disposition, any other claims unknown at the time) be charged to SIL's estate (so DW and BIL are not responsible)?
5. If county or judge appoints an attorney for SIL's estate, can that expense be charged to estate?
(2) Cremation and a modest family memorial dinner cost me under $1k for a relative, but since funeral expenses have to be paid up front, you have undoubtedly already paid that. If no funds, then a gift to deceased SIL. Expenses you choose to incur (extra months rent, hauling furniture) DW or BIL are now responsible for, since you incurred them.
(4) How can you charge them to the estate or get reimbursed if there are no funds? If there was a modest savings account or any cash that you have already taken, you could offset that with Funeral expenses. If the account was solely in SIL name, you will have to file probate in some form to get that cash, and it's likely to be directed towards all expenses. If you spend more, it's gonna be on you.
(5) The probate is generally state specific, but I can't see anyone assigning an attorney to a non-existent, bankrupt, unfunded estate. On the good side, I don't think DW will end up being responsible for any of it. Take the personal mementos and walk away from the apartment?
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.
Topic Author
Prudence
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Re: Social Security Issue

Post by Prudence »

Sandi_k wrote: Mon May 18, 2020 12:55 pm IF BIL was married to your wife's sister, there may be joint assets that can be claimed. Please clarify if BIL was married to your wife's sister.
The BIL in my post is my DW's brother (i.e. my BIL). Sorry for the confusion. There were three children: my DW, her brother (my BIL) and the deceased sister.
Topic Author
Prudence
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Re: Social Security Issue

Post by Prudence »

JGoneRiding wrote: Mon May 18, 2020 3:55 pm Wife will only owe for what she feels like paying. I personally might see they were buried properly.
The rent they will have to pay if they asked the landlord to extend the lease otherwise they should have been out in 30 days.

Funeral expenses and then last hospital usually take precedence for being paid. But to get that money you would need to file as pr and put in as a small estate.

I am a pr currently. I guarantee in this situation I would stay far far away. I would take care of personal effects and catalog everything of potential value. Iw ould hold a garage sale and then wait to see if anyone shows up to claim the funds.
Why would you "stay far far away in this situation"? I can think of a few good reasons but I would like to know what you were thinking. Thx.
Topic Author
Prudence
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Re: Social Security Issue

Post by Prudence »

Mlm wrote: Mon May 18, 2020 4:33 pm A Social Security Representative Payee can not be held responsible for the overpayment if they were not the representative at the time of the overpayment. If this is the case reply to SS that they were not the Rep at that time and enclose a copy of the Representative Payee approval letter.
Which representative are you referring to, the PR or the SS Representative Payee? Thx.
Topic Author
Prudence
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Re: Social Security Issue

Post by Prudence »

CAsage wrote: Mon May 18, 2020 4:54 pm
Prudence wrote: Mon May 18, 2020 8:25 am 2. The $25,000 owed SSA plus the funeral home expense and other post-death miscellaneous expenses (e.g. cleaning out the apartment, hauling away furniture etc.) is substantially more than the value of SIL's assets. What money, if any, will DW and BIL owe SSA out of their own pockets?
4. Can the post-death expenses (funeral home, rent, cleaning and disposition, any other claims unknown at the time) be charged to SIL's estate (so DW and BIL are not responsible)?
5. If county or judge appoints an attorney for SIL's estate, can that expense be charged to estate?
(2) Cremation and a modest family memorial dinner cost me under $1k for a relative, but since funeral expenses have to be paid up front, you have undoubtedly already paid that. If no funds, then a gift to deceased SIL. Expenses you choose to incur (extra months rent, hauling furniture) DW or BIL are now responsible for, since you incurred them.
(4) How can you charge them to the estate or get reimbursed if there are no funds? If there was a modest savings account or any cash that you have already taken, you could offset that with Funeral expenses. If the account was solely in SIL name, you will have to file probate in some form to get that cash, and it's likely to be directed towards all expenses. If you spend more, it's gonna be on you.
(5) The probate is generally state specific, but I can't see anyone assigning an attorney to a non-existent, bankrupt, unfunded estate. On the good side, I don't think DW will end up being responsible for any of it. Take the personal mementos and walk away from the apartment?
The deceased had about $10,000 in a bank account which my wife was planning on using to pay for the funeral expenses, extra months rent, clean out expenses etc. But then she was shocked to learn about the letter from SSA requesting $25,000. We are wondering where SSA stands in the priority of claims against the deceased estate.
delamer
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Re: Social Security Issue

Post by delamer »

That’s a shame about your SIL.

If the funeral services were incurred and paid, then I am having trouble seeing how the payor would have a claim against the estate. It is not the case that the funeral home is owed money, plus the payor (not your SIL) took on the cost.

I will be interested to see the responses.
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Mlm
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Re: Social Security Issue

Post by Mlm »

Prudence wrote: Mon May 18, 2020 5:25 pm
Mlm wrote: Mon May 18, 2020 4:33 pm A Social Security Representative Payee can not be held responsible for the overpayment if they were not the representative at the time of the overpayment. If this is the case reply to SS that they were not the Rep at that time and enclose a copy of the Representative Payee approval letter.
Which representative are you referring to, the PR or the SS Representative Payee? Thx.
The Social Security Representative Payee
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CAsage
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Re: Social Security Issue

Post by CAsage »

Prudence wrote: Mon May 18, 2020 5:31 pm The deceased had about $10,000 in a bank account which my wife was planning on using to pay for the funeral expenses, extra months rent, clean out expenses etc. But then she was shocked to learn about the letter from SSA requesting $25,000. We are wondering where SSA stands in the priority of claims against the deceased estate.
That makes perfect sense. I am guessing that you will need to open probate to access that $10K unless it was left as TOD to someone. You might google for more information.... or pay a PA lawyer for one hour. I don't have a clue where other debts fall....

https://mcandrewslaw.com/publications-a ... an-estate/

However, if an estate’s debts are greater than its available assets, the estate is insolvent. In this case, Section 3392 of the Pennsylvania Probate, Estates, and Fiduciaries Code lists the order in which creditor claims are to be paid. As such, if a personal representative suspects or knows that the estate is insolvent, he or she should not pay any creditor claims until all creditors have brought forth their claims during the one-year creditor period. Section 3392 states that all creditor claims shall be paid in the following order: (1) the costs of administering the decedent’s estate, which includes any probate fees, attorneys’ fees, or personal representative commissions; (2) the family exemption, which is $3,500.00 for each family member who resided with the decedent at the time of his or her death; (3) the cost of the decedent’s funeral and burial, the costs of any medicines, hospital care, nursing services, or Medical Assistance provided to the decedent within six months of his or her date of death, and the services performed for the decedent by any employees within six months of his or her date of death; (4) the cost of the decedent’s gravemarker; (5) the rent for the decedent’s residence for the six months immediately preceding his or her death; (5.1) any claims by the Commonwealth of Pennsylvania; and (6) all other claims, including the costs of medicines, hospital care, Medical assistance, nursing services, and/or rents furnished to the decedent for any period earlier that six months of the decedent’s date of death.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.
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