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  #1  
Old 08-12-2017, 09:23 PM
kpenders kpenders is offline
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How series is using a dead persons bank account?

Person A) Steve
Person B) Jane
Person C) Frank

Lets say that Steve is someone in his mid thirties. Steve had been taking care of his aunt Jane who was old and disabled, and received social security benefits of 700$ per month. Jane had been living in Steve's house and Steve had basically paid her bills in addition to utilities, rent etc and basically took care of her. Jane's family including her brother Frank had contributed nothing and never did a thing for her

So lets say Jane passes away in January, and she had owed Steve some money. Steve now has no way of collecting since she's gone and is feeling pissed.

However, it turned out as of June that social security was still depositing money in Jane's bank account. Feeling entitled, Steve had thought that maybe he could borrow some money to pay for a few things and put the money back in after a few months, sweep it under the rug and that at least if he paid back every penny then social security would bugger off if they got all of their money back.

2 months later, Steve had repaid every penny that he borrowed back into Jane's account and hoped that he could sweep this under the rug

Steve has found out that this is technically theft, however how much trouble would Steve be in in this scenario if it was found out?

Steve has heard of some cases of social security depositing money years and years after someone dies. What is the likelihood of this going away if it's paid back, swept under the rug, Steve remains quiet on it and forgets all about it?

And in the scenario that it is found out, would a prosecuter care enough about a dead person to pursue it? Would Steve be in serious trouble or would he more than likely get a slap on the wrist since he did technically pay the money back?

Steve lives in IL btw

Last edited by kpenders; 08-12-2017 at 09:24 PM..
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  #2  
Old 08-12-2017, 09:59 PM
PastTense PastTense is offline
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What's Frank got to do with this story?
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  #3  
Old 08-12-2017, 10:04 PM
kpenders kpenders is offline
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Originally Posted by PastTense View Post
What's Frank got to do with this story?
He's the dickhead brother of Jane who, along with the rest of the family, did contribute a dime to taking care of her. He's not important.
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Old 08-12-2017, 10:18 PM
Joey P Joey P is offline
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Originally Posted by kpenders View Post
He's the dickhead brother of Jane who, along with the rest of the family, did contribute a dime to taking care of her. He's not important.
I think you need to just tell us what your actual question or concern is since it's getting lost in the hypothetical. Frank never came up in the story and didn't need to be mentioned.
If SSA wants their money back, I assume they'll ask for it (or take it). Why would they care what's been going on with the actual account?

If I may take a stab at this...Call SSA and tell them your aunt died on such and such date but you were going over her last few bank statements and you saw that they were still making monthly deposits and you need to get them stopped and would like to know how to pay them back. They'll let you know. Do that. Be done.

On the other hand if this is something that is no longer your problem. Then just move on. If someone ever questions you on it deal with it then. Seems to me, they haven't yet, so they probably never will. But getting the SSA to stop making payments will make it more likely that a family member won't go poking around later when the SSA calls.

Actually, before I say anything else, if you (err Steve) had a POA over Jane, this would be really simple, but I'm guessing not.
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Old 08-12-2017, 10:21 PM
Ravenman Ravenman is offline
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From what I've read of individuals who have been convicted of theft of Social Security benefits, the prison terms are generally on the light side of what I would have suspected them to be. However, even if someone is convicted and given a very light sentence, I would not want to be them for all the things that go along with a criminal conviction. Potential loss of one's job (who wants to have a thief in their company?), harder to get a new job, an obligation to disclose the conviction, who knows what it means for getting a mortgage, etc.

I would surely want want to be Steve, that's for damn sure. Has Steve contacted the SSA to fix the error, or are the checks still coming in?
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Old 08-12-2017, 10:24 PM
kpenders kpenders is offline
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Originally Posted by Ravenman View Post
From what I've read of individuals who have been convicted of theft of Social Security benefits, the prison terms are generally on the light side of what I would have suspected them to be. However, even if someone is convicted and given a very light sentence, I would not want to be them for all the things that go along with a criminal conviction. Potential loss of one's job (who wants to have a thief in their company?), harder to get a new job, an obligation to disclose the conviction, who knows what it means for getting a mortgage, etc.

I would surely want want to be Steve, that's for damn sure. Has Steve contacted the SSA to fix the error, or are the checks still coming in?
Jane's checks are still coming, Steve has deposited all of the money he borrowed from that account, every last penny of it, back into Janes account and has decided to forget about it, let someone else deal with it. Maybe one day 5-10 years from now Social Security will figure out that Jane is dead, look into her bank account, see 5-10 years of payments and simply take the money back and let that be the end of it.

Last edited by kpenders; 08-12-2017 at 10:25 PM..
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  #7  
Old 08-12-2017, 10:26 PM
guizot guizot is offline
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I bet C) Frank is just waiting there, about to do some real dickhead thing which will screw everything up even more.

Just wait--you'll see I'm right.
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  #8  
Old 08-12-2017, 10:38 PM
Ravenman Ravenman is offline
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Originally Posted by kpenders View Post
Jane's checks are still coming, Steve has deposited all of the money he borrowed from that account, every last penny of it, back into Janes account and has decided to forget about it, let someone else deal with it. Maybe one day 5-10 years from now Social Security will figure out that Jane is dead, look into her bank account, see 5-10 years of payments and simply take the money back and let that be the end of it.
Jeez, is there nobody taking care of her estate? What a mess.
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  #9  
Old 08-12-2017, 11:10 PM
kpenders kpenders is offline
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Originally Posted by Ravenman View Post
Jeez, is there nobody taking care of her estate? What a mess.
No one can find her social security card and she had really had no assets. No car, no house, no life insurance ,nothing
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  #10  
Old 08-12-2017, 11:26 PM
Joey P Joey P is offline
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Originally Posted by kpenders View Post
No one can find her social security card and she had really had no assets. No car, no house, no life insurance ,nothing
Surely you're not the only person who was taking care of someone when they died, had to help clean up the estate and needed to stop the SSA payments without knowing much more (vital info) than their name.
Call the SSA, go to one of their locations or call the funeral home.


If you need to report a death, contact your local Social Security office or call 1-800-772-1213 ( TTY 1-800-325-0778). You can speak to a Social Security representative between 7 AM and 7 PM Monday through Friday.

ETA, I assumed these were direct deposits. Were they actual paper checks in the mail? That may make it a little more difficult, but if "steve" just wants to walk away, he needs to stop depositing them. Maybe change the address for the checks and the bank account to a random family next of kin, or mark "deceased, return to sender" on the next few SSA checks. Or, hell, maybe even lose (ie throw away) a few and after a year or so give a big pile of mail to one of the kids and hope they deposit them all thinking they just hit it rich.

Last edited by Joey P; 08-12-2017 at 11:30 PM..
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  #11  
Old 08-12-2017, 11:30 PM
kpenders kpenders is offline
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Originally Posted by Joey P View Post
Surely you're not the only person who was taking care of someone when they died, had to help clean up the estate and needed to stop the SSA payments without knowing much more (vital info) than their name.
Call the SSA, go to one of their locations or call the funeral home.


If you need to report a death, contact your local Social Security office or call 1-800-772-1213 ( TTY 1-800-325-0778). You can speak to a Social Security representative between 7 AM and 7 PM Monday through Friday.

ETA, I assumed these were direct deposits. Were they actual paper checks in the mail? That may make it a little more difficult, but if "steve" just wants to walk away, he needs to stop depositing them. Maybe change the address for the checks and the bank account to a random family next of kin, or mark "deceased, return to sender" on the next few SSA checks. Or, hell, maybe even lose (ie throw away) a few and after a year or so give a big pile of mail to one of the kids and hope they deposit them all thinking they just hit it rich.
They're direct deposits, Steve was using money in the account to pay for a few bills, then paid the money back in full because eventually SSA would most likely want the money back, so it'll be there when they're ready to take it


The thing is Steve doesn't feel as if it's his responsibility, he kind of hated and resented Jane and thus doesn't want to call the SSA because it's not his problem. Once he deposited the money into the account Steve decided to let it go and forget about it, and that he has no obligation to call SSA. It's there problem. Let them figure out that she's dead and get the money back.

Last edited by kpenders; 08-12-2017 at 11:32 PM..
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  #12  
Old 08-12-2017, 11:32 PM
StarvingButStrong StarvingButStrong is offline
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Except for a bank account growing at $700 a month, it seems.

You don't need the actual SS card, just the number. Her bank will have the soc. security number. If she died in a hospital, the hospital records will have the number, too. Did you ever get any medical bills for her? They likely have her SS number on them, too.

Presumably Aunt Jane was legally declared dead -- I mean, her body isn't still sitting in a wheelchair in the basement, is it? Take a copy of the death certificate to the bank and/or hospital, and I'll bet they'll supply you with the SS number.

Then call the Social Security office and tell them they need to update their records. They'll walk you through any steps needed. Heck, even if you don't know the number -- assuming you have the other info to let them id her (name, where/where she was born, where she was living, the account number of the bank account they deposited her money to, some subset of that kind of info) they can start from there. The SS administration has no trouble finding out people's SS numbers: they assigned them to begin with, after all.

I promise you they WILL want any money deposited after she died back,, and will suck it right out of the bank account where they deposited it if there's enough there. That's what they did with my mother, she'd gotten her deposit just a few days after her death.

So long as they get their money -- and it hasn't been a really long time -- I don't they would do anything to Steve. Hey, he was a grieving relative who doesn't happen to understand all the ins and outs of government benefits. Who does?
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Old 08-12-2017, 11:38 PM
kpenders kpenders is offline
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Originally Posted by StarvingButStrong View Post
Except for a bank account growing at $700 a month, it seems.

You don't need the actual SS card, just the number. Her bank will have the soc. security number. If she died in a hospital, the hospital records will have the number, too. Did you ever get any medical bills for her? They likely have her SS number on them, too.

Presumably Aunt Jane was legally declared dead -- I mean, her body isn't still sitting in a wheelchair in the basement, is it? Take a copy of the death certificate to the bank and/or hospital, and I'll bet they'll supply you with the SS number.

Then call the Social Security office and tell them they need to update their records. They'll walk you through any steps needed. Heck, even if you don't know the number -- assuming you have the other info to let them id her (name, where/where she was born, where she was living, the account number of the bank account they deposited her money to, some subset of that kind of info) they can start from there. The SS administration has no trouble finding out people's SS numbers: they assigned them to begin with, after all.

I promise you they WILL want any money deposited after she died back,, and will suck it right out of the bank account where they deposited it if there's enough there. That's what they did with my mother, she'd gotten her deposit just a few days after her death.

So long as they get their money -- and it hasn't been a really long time -- I don't they would do anything to Steve. Hey, he was a grieving relative who doesn't happen to understand all the ins and outs of government benefits. Who does?
That's the funny thing, no one knows her social security number. Not even Frank and the rest of the family, they looked for her SS Card and couldn't find it anywhere, the funeral home doesn't have it, no one does. You're right though that it shouldn't be hard to figure things out, it's just that Steve doesn't feel that he should

I'm sure the SSA will want there money back, Steve isn't really concerned with them. Steve is more concerned if because he had used the account in the first place if there would be any legal ramifications, and if so would a prosecutor care enough to pursue it.

Steve is really hoping that, now that he's paid the money back, that social security will wise up years from now, that the bank won't care and will simply close the account and that it'll be erased from existence. No questions asked
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Old 08-12-2017, 11:45 PM
Yllaria Yllaria is offline
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If Steve doesn't want to deal with SSA, and since Frank looks like next of kin, that would be his job, would he mind notifying the bank? He could even drop Frank's name and number on them as her heir apparent.

I'm not sure what the bank would do, if he doesn't have a Death Certificate, and if he's not wanting to get involved, he won't have one. The bank would know her SSN, although they may not want to share it or to notify SSA.

Of course, if he notifies the bank properly, with a Death Certificate, the bank might share her number.

There's absolutely nothing that would cause SSA to "wise up."

Last edited by Yllaria; 08-12-2017 at 11:47 PM..
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Old 08-13-2017, 12:14 AM
kpenders kpenders is offline
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Originally Posted by Yllaria View Post
If Steve doesn't want to deal with SSA, and since Frank looks like next of kin, that would be his job, would he mind notifying the bank? He could even drop Frank's name and number on them as her heir apparent.

I'm not sure what the bank would do, if he doesn't have a Death Certificate, and if he's not wanting to get involved, he won't have one. The bank would know her SSN, although they may not want to share it or to notify SSA.

Of course, if he notifies the bank properly, with a Death Certificate, the bank might share her number.

There's absolutely nothing that would cause SSA to "wise up."
Frank is one of her 3 brothers, I'm not sure who the next of kin would be between the 3 of them. That being said one interesting thing that Steve was wondering, if Steve, Frank ,pretty much no one does anything, will SSA keep depostiing money until the end of time?
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Old 08-13-2017, 12:24 AM
Joey P Joey P is offline
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I think you've still got the two things mixed that don't need to be.

A)Steve used money and it's bothering him.
He used it, he put it back. It's over and done now. Steve needs to wait for someone to contact him about that, but for now let it go but work on the assumption that no one will be the wiser. IMO, even if someone does find out (family, that is), they may just assume it was somehow Jane related expenses.
You didn't say how much it was. If it was a few hundred dollars, he could probably easily say he was paying himself back for something or another that he bought for her, but then decided against it for one reason or another. Thousands or tens of thousands would be harder to explain.

B)Steve knows that at some point the SSA will want their money back and when they do he's under the impression that they'll go and look at all the transactions since Jane's death and ask lots of questions.
While I've never been in that situation, I don't think that's what will happen. My guess would be that they would just send someone a bill (or a notice of an ETF withdrawal) for the amount. The SSA, I don't think, really cares about who is writing checks from or making deposits into a bank account.

In other words, stop worrying. Jane's gone, the money is back, it's over now.
Or, if this is really, really, really bothering Steve, then Steve needs to go have a consultation with a lawyer. It'll cost a hundred-ish, bucks but it'll tell him exactly where he stands and what he needs to do to get this all cleaned up.

Last edited by Joey P; 08-13-2017 at 12:28 AM..
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Old 08-13-2017, 02:50 AM
t-bonham@scc.net t-bonham@scc.net is offline
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Originally Posted by Yllaria View Post
There's absolutely nothing that would cause SSA to "wise up."
Yes there is.

It's the fact that Jane has a Certificate of Death filed with the state she resided in. That is automatically done by the hospital or doctor that certified her death. The next of kin can get copies from the local county, and needs them for work in settling her estate. (Sounds like neither Steve or anybody else has actually done this. There may not be much, but closing her bank account is one item. Also notifying Social Security, Medicare, etc.)

But all 50 states supply their death records to Social Security, and the SSA matches them to their records of benefit payments. This can take a year or more, but eventually it will be done.*

Then when their computers notice payments after her death, they will come to get them back. If the bank account that they were paid into is still open, they will issue a seizure order for the amount of overpayment, and take them right out of the bank account. If that amount is there, then SSA is satisfied & won't look any further. If the money isn't there, then they will come looking, and start examining the account records to see who got it. Technically, they could go after interest on the overpayments, but they usually don't bother.

But Steve ought to report this to Social Security on his own, rather than waiting for them to find out. Then Social Security will look at him as a grieving relative, and will be helpful. If they find it on their own, they might look at him as a scammer, trying to defraud the government. Much better to be the first

*This used to create the Social Security Death Index, a big database of all the reported deaths in the USA. It's public information, and is used a whole lot in genealogical research.
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  #18  
Old 08-13-2017, 05:10 AM
TokyoBayer TokyoBayer is online now
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Having "borrowed" the money is not going to be a problem. They are going to look at the balance. Period.
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Old 08-13-2017, 06:54 AM
Bosda Di'Chi of Tricor Bosda Di'Chi of Tricor is offline
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Taking Federal funds earmarked for somebody/something else is not to be contemplated.
Do not.
Posted by a Bureaucrat, of 24 years.
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Old 08-13-2017, 09:17 AM
PunditLisa PunditLisa is offline
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Unless his name was also on the account, there is no way that Steve could take money out of his late Aunt's bank account without committing some sort of fraud, by either forging a check made out to Steve, or by forging a withdrawal slip.

In any event, I agree that it's unlikely that the SSI will discover the fraud. It's much more likely that her Executor will discover it in the process of settling her estate. (In addition to examining her financial records to determine her assets and liabilities, the Executor is also responsible for notifying interested parties of her death, such as mortgage companies and SSI.)

No matter what, Steve should be prepared to explain what he did, and keep in a safe place any documentation of both the loan he claims he made to her, as well as his proof of repayment of the money he took from her account after her death.

IMO, the big question is "Who is Jane's Executor?" If she named Steve, then he will presumably not turn himself in. If the Aunt named the elusive Frank, then Steve should be prepared to answer to Frank. If she named a lawyer or if she died intestate, then he may have more difficulty, because I believe Probate Courts routinely name lawyers as Executors when people die without a will. Lawyers may be required to report any evidence fraud; I really have no idea.

PS If the aunt died intestate, Steve can file a motion to be named Executor. But he might not want to do that because he has a conflict of interest. First, because she owes him money, and second, because, if discovered, it may look like he wanted to conceal his fraudulent activity.

As a secondary matter, Steve should still file a claim against the estate for the amount remaining on his personal loan to Jane. The estate may well have nothing left after paying off other primary creditors, but it's possible she may have a life insurance policy, or pension, etc, so there's a slim possibility he will still get repaid the honest way.

Last edited by PunditLisa; 08-13-2017 at 09:19 AM..
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Old 08-13-2017, 10:23 AM
TokyoBayer TokyoBayer is online now
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Originally Posted by PunditLisa View Post
No matter what, Steve should be prepared to explain what he did, and keep in a safe place any documentation of both the loan he claims he made to her, as well as his proof of repayment of the money he took from her account after her death.
If someone asks questions, I would definitely talk to an attorney first.
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  #22  
Old 08-13-2017, 07:53 PM
Yllaria Yllaria is offline
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Yes there is. . . . all 50 states supply their death records to Social Security, and the SSA matches them to their records of benefit payments. This can take a year or more, but eventually it will be done.* . . .

*This used to create the Social Security Death Index, a big database of all the reported deaths in the USA. It's public information, and is used a whole lot in genealogical research.
Good to know. Especially the underlined part. Thanks.
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Old 08-13-2017, 08:38 PM
Dangerosa Dangerosa is offline
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Originally Posted by t-bonham@scc.net View Post
Yes there is.

It's the fact that Jane has a Certificate of Death filed with the state she resided in. That is automatically done by the hospital or doctor that certified her death. The next of kin can get copies from the local county, and needs them for work in settling her estate. (Sounds like neither Steve or anybody else has actually done this. There may not be much, but closing her bank account is one item. Also notifying Social Security, Medicare, etc.)

But all 50 states supply their death records to Social Security, and the SSA matches them to their records of benefit payments. This can take a year or more, but eventually it will be done.*

Then when their computers notice payments after her death, they will come to get them back. If the bank account that they were paid into is still open, they will issue a seizure order for the amount of overpayment, and take them right out of the bank account. If that amount is there, then SSA is satisfied & won't look any further. If the money isn't there, then they will come looking, and start examining the account records to see who got it. Technically, they could go after interest on the overpayments, but they usually don't bother.

But Steve ought to report this to Social Security on his own, rather than waiting for them to find out. Then Social Security will look at him as a grieving relative, and will be helpful. If they find it on their own, they might look at him as a scammer, trying to defraud the government. Much better to be the first



*This used to create the Social Security Death Index, a big database of all the reported deaths in the USA. It's public information, and is used a whole lot in genealogical research.

And I wouldn't count on the year or more. When my brother in law died he was on SSDI. The funeral home took care of the death certificate and his last check was the month he passed. With computerized records, the whole thing can get reported in very quickly - and its naive to believe that Social Security is not aware fraud happens - they see it all the time.

(Unless Steve buries Jane under the front porch).

Last edited by Dangerosa; 08-13-2017 at 08:43 PM..
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Old 08-13-2017, 09:21 PM
aceplace57 aceplace57 is offline
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My mom added my name to her checking and savings accounts. I signed the signature card and she gave it to the bank.

Either of us can write checks or withdraw money.

I would never do that unless something happens and she is incapacitated. I may have to pay her bills.

I've been told that simplifies things later when the estate is settled. I should have access to those bank accounts.

The rest of the estate will be complicated.

I know it's important to notify Social Security and get those checks stopped.

Last edited by aceplace57; 08-13-2017 at 09:25 PM..
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Old 08-13-2017, 09:24 PM
wellanuff wellanuff is offline
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I am not a lawyer, and can't give any advice, but as everyone has said, I think the SSA will just get the money back out of the account if it is there. I would be surprised if they look at transactions in the account.

It sounds like Jane owned way less than $100,000 in assets. If that is the case, in Illinois a small estate affidavit might be the way to go in terms of handling her estate. There are various requirements and conditions, but it is pretty straightforward, and should avoid the cost and time of probate.

Debts will have to be paid before any remaining assets can be distributed to heirs under a small estate affidavit; if Steve is legitimately owed money, he might want to simultaneously alert the siblings about this process and about the debt. That should create an obligation for his debts (which would then be known to them) to be paid off before her assets were distributed to the heirs. I think.

If she died intestate, I don't think nephew Steve is entitled to share in an inheritance in Illinois. If Jane had no spouse or children, then siblings would be next in line.

But like I said, I am not a lawyer, I am not giving advice and I am only alerting you to possibilities.
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Old 08-13-2017, 09:50 PM
ioioio ioioio is offline
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Originally Posted by PunditLisa View Post
Unless his name was also on the account, there is no way that Steve could take money out of his late Aunt's bank account without committing some sort of fraud, by either forging a check made out to Steve, or by forging a withdrawal slip.
Steve could have his aunt's ATM card and know her PIN. He could have been getting cash for her for years with her approval. Of course, once she's dead, it becomes fraud, but harder to trace and perhaps easier to explain -- "I was paying some post-death bills".

Just curious . . . who paid for Aunt's funeral and burial/cremation expenses?

A person's SSN is on their Medicare card, which Aunt had to have every time she visited a doctor. I get monthly statements from Medicare, showing my SSN.
Did Aunt file taxes? Aunt has to have left some records behind.
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  #27  
Old 08-14-2017, 12:01 PM
Yllaria Yllaria is offline
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Originally Posted by aceplace57 View Post
My mom added my name to her checking and savings accounts. I signed the signature card and she gave it to the bank.

Either of us can write checks or withdraw money.

I would never do that unless something happens and she is incapacitated. I may have to pay her bills.

I've been told that simplifies things later when the estate is settled. I should have access to those bank accounts. . . . .
This is very helpful. My mom added me to six of seven accounts. She also had PODs (Pay on Death to named beneficiaries) on all her accounts. That was also helpful.

One odd thing. Three of the four banks involved honored the POD when notified. The last bank said that because I was a listed signatory, and I was still alive, the account could not be disbursed. Not a huge problem, just odd.
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Old 08-14-2017, 12:26 PM
Caffeine.addict Caffeine.addict is offline
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How did Steve access the bank account? Was he on the account jointly with Jane? Was he a Power of Attorney? Did he have her PIN number?

From what I've seen Social Security just debits the overpayments from the decedent's account.
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Old 08-14-2017, 12:55 PM
LSLGuy LSLGuy is offline
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Originally Posted by Yllaria View Post
This is very helpful. My mom added me to six of seven accounts. She also had PODs (Pay on Death to named beneficiaries) on all her accounts. That was also helpful.

One odd thing. Three of the four banks involved honored the POD when notified. The last bank said that because I was a listed signatory, and I was still alive, the account could not be disbursed. Not a huge problem, just odd.
Were you a signatory or a co-owner on these accounts with Mom? Those are legally very different situations and typically a POD designation would only play in the former case, not the latter.

It's entirely possible some banks assumed one way and others assumed the other way. Or the fine print on one of the boxes that got checked when you were added to the account was different than the others and neither you or Mom noticed or understood the significance of the difference.
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  #30  
Old 08-14-2017, 12:59 PM
LSLGuy LSLGuy is offline
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Social Security will take all the money back. By statute, if SS can't get it all out of the decedent's account because there isn't enough money there and they can't find any other decedent money to attach, they'll simply confiscate the remainder from the bank itself. Leaving the bank holding any shortfall.

SS will not be denied their money.

They may choose to prosecute everybody in the household & family who had knowledge of the death but ignored the fact the money was still wrongfully coming in. Probably not but it's possible.
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  #31  
Old 08-14-2017, 01:43 PM
Lemur866 Lemur866 is offline
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Right, but they want to be paid the amount they overpaid. If the bank account has enough money to pay them back, there's no problem.

Money is fungible. If they need $700 back, and the account has $700, then everything is fine. If the account doesn't have $700, what happened to the deposit in the dead person's account? Where did the money go? If they look for the $700 in Jane's account and it's not there, they'll look again and see that Steve withdrew $700, and they'll need their money back from Steve. And if Steve didn't have the legal right to take that money, he could be in trouble, because that's fraud.

Normally siphoning money from a confused elderly person doesn't result in fraud charges, because it would require someone to complain. The elderly person doesn't complain, because they don't know what's happening. Then the elderly person dies, and their heirs look at the estate. Then you might get caught. Except, according to the story, Steve didn't defraud Jane, he just had access to her accounts and used that to pay the bills, because Jane needed Steve to handle that.

Anyway, the crux of the matter is that if Steve is taking care of Jane, and Jane owes Steve some money, let's say $700, and then Jane dies, and the next week $700 shows up in Jane's account from SS, and Steve takes that money because Jane legitimately owes it to him, Steve is going to be in trouble. Because Social Security is going to find out that Jane died, and dead people aren't entitled to Social Security, so where's our $700? Steve is going to have to give them their money. But he already did, even though he took some money out, since he put it back then Social Security is going to get their money, and everything is fine. The only problem is that Steve will never get the $700 that Jane owed him...unless Jane had more money saved than that.

If she did, then her estate is worth something, and Steve can ask to be paid by the estate, like the rest of Jane's creditors. Creditors get paid first before Jane's heirs, presumably her siblings. The only problem is proving that Jane really owed Steve money. Good luck with that.

However, from the story as written, it seems very likely that Jane didn't have any assets at death, and therefore the creditors all get stiffed, including Steve if Jane really did owe Steve money, and the heirs get to divide the empty bag left over.

Bottom line, if the government gets back the amount they mistakenly put in, then there is no problem for Steve, and he can walk away.
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  #32  
Old 08-14-2017, 02:22 PM
Dinsdale Dinsdale is offline
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Just did a quick policy search, and was surprised to not readily find anything directly on point. Pretty clear that failure to report a beneficiary's death, and the misuse of benefits (at least by a rep payee) COULD constitute fraud. But iME/O it is extremely unlikely that anyone would pursue a fraud investigation if all of the funds are there to be recovered. Someone MIGHT notice the postmortem withdrawals and deposits, but if Steve was not a rep payee, and if SSA is able to recover the overpaid benefits, I would be shocked if anyone would raise a red flag.

DISCLAIMER - investigation of possible fraud has been high profile for the past few years, so there are no guarantees. Steve was pretty stupid for fucking around with money that wasn't his. I would wager that if I really cared to search, I could find SOME law that Steve violated. Hell, he knew what he was doing wasn't right. But it is unlikely anyone will ever notice or care enough to do anything about it.

But everything I uncovered - and my 30+ years' experience, strongly suggests that SSA's near exclusive interest is in recovering the bens.

If I were anyway involved, I'd make a call to the local SSA field office, or the 1-800 number, and report the death. Don't worry that you don't know the SSN - SSA can find it using the name and date of birth. Or I'd call the bank. Don't close the account.

One thing Steve - and everyone else with knowledge of the situation - should do is refrain from ever criticizing SSA as inefficient, if they are too damned lazy/irresponsible to make a simple phone call to report an obvious situation, and unwilling to refrain from temporarily converting public funds for their personal use.
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  #33  
Old 08-14-2017, 02:40 PM
LSLGuy LSLGuy is offline
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Agreed. My wife's the attorney for a bunch of smallish banks. This situation of household members "forgetting" to notify SSA of a death is pretty common. We review a case every month or so.

If the money is gone the bank will be on the hook to SSA for the shortfall. And that will make the bank very interested in pressing fraud charges against any/all household members. It's surprising how often supposedly broke people can suddenly find money if the sheriff is figuratively (or literally) at their door.

If instead SSA gets their money back directly and so the bank also comes out even, neither of those entities has much / any motivation to pursue the case further. Local police certainly don't.


"Steve" made a dumb move, followed by a smarter move. He'll probably skate through just fine.

Last edited by LSLGuy; 08-14-2017 at 02:41 PM..
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  #34  
Old 08-14-2017, 03:13 PM
mixdenny mixdenny is offline
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Not only will the SSA recover the paid benefits, they want the interest it would have earned if still deposited in the SS fund. That's currently about 3.2% compounded continuously. The estate cannot keep that month's benefit if she died before the issue date.

Dennis
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  #35  
Old 08-14-2017, 03:32 PM
Dobbs Dobbs is offline
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Quote:
Originally Posted by Dinsdale View Post
One thing Steve - and everyone else with knowledge of the situation - should do is refrain from ever criticizing SSA as inefficient, if they are too damned lazy/irresponsible to make a simple phone call to report an obvious situation, and unwilling to refrain from temporarily converting public funds for their personal use.
Indeed. When dealing with my parents deaths, dealing with SSA was about the easiest task my sister and I faced. It's been a coupla years, but I don't thing both calls took more than 10 minutes total, and that includes wait time.
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  #36  
Old 08-14-2017, 03:40 PM
Lemur866 Lemur866 is offline
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Quote:
Originally Posted by mixdenny View Post
Not only will the SSA recover the paid benefits, they want the interest it would have earned if still deposited in the SS fund. That's currently about 3.2% compounded continuously. The estate cannot keep that month's benefit if she died before the issue date.

Dennis
Right, but in this case it looks like the estate will have nothing. So good luck to the SSA in recovering a few dollars from the estate of an impoverished old lady.
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  #37  
Old 08-14-2017, 04:20 PM
dofe dofe is offline
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Quote:
Originally Posted by kpenders View Post
Person A) Steve
Person B) Jane
Person C) Frank

Lets say that Steve is someone in his mid thirties. Steve had been taking care of his aunt Jane who was old and disabled, and received social security benefits of 700$ per month. Jane had been living in Steve's house and Steve had basically paid her bills in addition to utilities, rent etc and basically took care of her. Jane's family including her brother Frank had contributed nothing and never did a thing for her

So lets say Jane passes away in January, and she had owed Steve some money. Steve now has no way of collecting since she's gone and is feeling pissed.

However, it turned out as of June that social security was still depositing money in Jane's bank account. Feeling entitled, Steve had thought that maybe he could borrow some money to pay for a few things and put the money back in after a few months, sweep it under the rug and that at least if he paid back every penny then social security would bugger off if they got all of their money back.

2 months later, Steve had repaid every penny that he borrowed back into Jane's account and hoped that he could sweep this under the rug

Steve has found out that this is technically theft, however how much trouble would Steve be in in this scenario if it was found out?

Steve has heard of some cases of social security depositing money years and years after someone dies. What is the likelihood of this going away if it's paid back, swept under the rug, Steve remains quiet on it and forgets all about it?

And in the scenario that it is found out, would a prosecuter care enough about a dead person to pursue it? Would Steve be in serious trouble or would he more than likely get a slap on the wrist since he did technically pay the money back?

Steve lives in IL btw
The Social Security Administration has fraud prosecutors working the US Attorney's Offices exclusively to prosecute these types of fraud cases. Deceased payee cases happen more regularly than people think and SSA will prosecute you when it finds out.
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  #38  
Old 08-14-2017, 07:01 PM
PunditLisa PunditLisa is offline
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Quote:
Originally Posted by Lemur866 View Post
Right, but in this case it looks like the estate will have nothing. So good luck to the SSA in recovering a few dollars from the estate of an impoverished old lady.
From the way I read the OP, the monthly SSI was direct deposited into her account. Steve took it out, then turned around and paid it all back. Assuming she has no automatic deductions coming out of her account, and no outstanding checks that were deducted after her death, all the money she collected from SSI should still be there. (And the Executor should make sure that it is not used to pay other secondary debts.)
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  #39  
Old 08-14-2017, 07:03 PM
PunditLisa PunditLisa is offline
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Quote:
Originally Posted by ioioio View Post
Steve could have his aunt's ATM card and know her PIN. He could have been getting cash for her for years with her approval. Of course, once she's dead, it becomes fraud, but harder to trace and perhaps easier to explain -- "I was paying some post-death bills".
That is why I said that unless his name was on the account, there was no way he could have taken money from his LATE Aunt's account without committing fraud.
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  #40  
Old 08-15-2017, 12:13 PM
Lemur866 Lemur866 is offline
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Quote:
Originally Posted by PunditLisa View Post
From the way I read the OP, the monthly SSI was direct deposited into her account. Steve took it out, then turned around and paid it all back. Assuming she has no automatic deductions coming out of her account, and no outstanding checks that were deducted after her death, all the money she collected from SSI should still be there. (And the Executor should make sure that it is not used to pay other secondary debts.)
Right, I meant the interest on the overpayments. The money from the SSA has to be there since SSA deposited it directly.

Let's be clear here. The SSA doesn't want "their money". They want to be repaid the same amount of money. If there is an amount of money on Jane's account to pay back the SSA for the amount they mistakenly deposited, then there is nothing to worry about. It only becomes a problem if there isn't enough money in the account of the deceased. Because then the question is, where did the money go? Somebody had to have taken it. Who was that?

Since according to the story there is now the amount of money the SSA will need to recover their overpayment, there is no problem.

Last edited by Lemur866; 08-15-2017 at 12:14 PM..
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  #41  
Old 08-15-2017, 01:10 PM
Yllaria Yllaria is offline
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Quote:
Originally Posted by LSLGuy View Post
Were you a signatory or a co-owner on these accounts with Mom? Those are legally very different situations and typically a POD designation would only play in the former case, not the latter.

It's entirely possible some banks assumed one way and others assumed the other way. Or the fine print on one of the boxes that got checked when you were added to the account was different than the others and neither you or Mom noticed or understood the significance of the difference.
The idea was that I'd be a signatory. Mom was going to get sicker and sicker and, estate handling aside, might need someone to pay bills for awhile. We knew, between the two of us, that she wasn't giving me the money. Neither of us knew that it was possible to specify signatory, not co-owner, so I'm not surprised that there were different interpretations, now that I know that the choice is there.

For a different family, that might be an important distinction, for us it was a minor oddity. The tricky part was selling a house 800 miles away.
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