You requested an opinion as to whether Michelle V~:
• Can receive an underpayment owed to her deceased sister, Kim A~, based on her status
as trustee of the Kim R. A~ Supplemental Needs Trust;
• Can receive the underpayment by being appointed as an executor of Ms. A~’s estate;
• Can give the agency “good acquittance” upon receipt of an underpayment in accordance
with POMS GN 02301.040 (Good Acquittance); and
• Can receive the underpayment under Colorado’s small estate statute in accordance
with POMS GN 02315.042 (State Jurisdiction – Small Estates).
Under Colorado intestacy law, Ms. V~ can give the agency “good acquittance” if she
is court-appointed as a personal representative of Ms. A~’s estate under the state’s
informal appointment proceeding. She must provide proof of her court-appointed personal
representative status, including proof of the appointment, certification of the appointment,
and an application and supporting documents. The agency may then pay her the underpayment.
According to the information you provided, Ms. A~ died on December 8, 2009, and was
survived only by Ms. V~, her sister. You advised that no one has been appointed as
a legal representative of Ms. A~’s estate. At the time of her death, she was domiciled
in Colorado. The agency determined that Ms. A~ was underpaid $99,228.67.
In April 2008, Ms. A~’s mother created an irrevocable supplemental needs trust. She
named Ms. A~ as the beneficiary and Ms. V~ as the trustee. Pursuant to Article I-6.00
of the trust, upon Ms. A~’s death, any remaining balance in the trust shall be distributed
to Ms. V~ by right of representation.
A. To be entitled to the underpayment under Federal law, Ms. V~ must be able to give
“good acquittance” to the agency.
Section 204(d) of the Social Security Act (“Act”), 42 U.S.C. § 404(d), specifies the
order of distribution for payment of the amount due to an individual who dies before
the agency completes payment to that individual. See also 20 C.F.R. § 404.503(b) (2009) (discussing the statutory order of priority); Program
Operations Manual System (“POMS”) GN 02301.030A (same). Where, as here, the individual is not survived by a qualified spouse, children,
or parents, the underpayment must be made to the deceased individual’s legal representative.
See 42 U.S.C. § 404(d)(7); 20 C.F.R. § 404.503(b)(7); POMS GN 02301.030A(g). The term “legal representative,” for the purpose of qualifying to receive an
underpayment, generally means the administrator or executor of the estate of the deceased.
20 C.F.R. § 404.503(d); see also POMS GN 02301.030A(g) (when the underpaid beneficiary is the deceased, if there is no surviving spouse,
child, or parent, then the underpayment should be made to the “legal representative”
of the deceased person’s estate). Your memo indicates that no one has been designated
as a legal representative of Ms. A~’s estate.
The regulations provide that an individual acting on behalf of an unadministered estate,
including a person who qualifies under a state’s small estate statute or a person
who has authority, under applicable law, to collect the assets of the estate of the
deceased person, may also qualify as a legal representative provided that person can
give the agency good acquittance. 20 C.F.R. §§ 404.503(d)(1) and (4); POMS GN 02301.035B(1). As defined in the regulations, a person is considered to give the agency good
acquittance when payment to that person releases the agency from further liability
for such payment. 20 C.F.R. § 404.503(e). See also POMS GN 02301.035C (describing the type of document that must be provided depending on the method used
to qualify as a legal representative).
B. Under Colorado law, Ms. V~ can give good acquittance by becoming the administrator
or executor of Ms. A~’s estate.
Colorado’s Probate Code describes the procedures for informal probate or appointment
proceedings. Colo. Rev. Stat. Ann. (“C.R.S.A.”) Title 15, Art. 12, Pt. 3 (2009). Under
the Code, a “personal representative” includes executor, administrator, successor
personal representative, special administrator, and persons who perform substantially
the same function under the law governing their status. C.R.S.A. § 15-10-201(39).
A personal representative may be appointed by order of the court or registrar under
an informal appointment proceeding. C.R.S.A. § 15-12-103. One of the requirements
to be appointed as a personal representative is a statement of interest. C.R.S.A.
§ 15-12-301. Because Ms. V~ is entitled to Ms. A~’s property by intestate succession,1_/
she is a person with an interest. Assuming she meets the other application requirements,2_/
Ms. V~ could apply to be appointed as personal representative of Ms. A~’s estate under
informal proceedings. C.R.S.A. §§ 15-12-301(2) and (5).
Acceptable proof of Ms. V~’s status as a court-appointed legal representative includes
proof of the appointment, certification of the appointment, and an application and
support documents. See POMS GN 02301.035C (1) – (4). Proof of the appointment may include a certified copy of letters of appointment,
a “short” certificate, a certified copy of the order of appointment, or any official
document issued by the clerk or other proper official of the appointing court. See POMS GN 02301.035C(2). Certifications of the appointment made more than a year before filing and copies
of certifications made by other than the proper court officer are not acceptable.
If the representative has been appointed more than a year before filing, the certification
must show that the appointment is still in effect. For appointments made less than
a year before filing, if circumstances indicate that the appointment may have ended,
the certification must show that the appointment is in effect. See POMS GN 02301.035C(3). Finally, an application and support documents must contain the representative’s
full title, a copy of the document needed to place the estate within her jurisdiction
certified by the proper court official, and any other evidence of her authority. See POMS GN 02301.035C(4).
C. Under Colorado law, Ms. V~ does not have the authority to collect the assets of
Ms. A~’s estate based on her status as trustee of her deceased sister’s supplemental
The regulations provide that the legal representative may be a person who has the
authority, under applicable law, to collect the assets of the estate of the deceased
individual. 20 C.F.R. § 404.503(d)(4). Colorado law allows payment to a trustee without
being a court-appointed personal representative if certain criteria are met. See C.R.S.A. § 15-15-101 (nonprobate transfer on death). The law provides that money owed
to a decedent before death must be paid after the decedent’s death to a person whom
the decedent designates in a written instrument or in a separate writing, including
a will, executed before or at the same time as the instrument. C.R.S.A. § 15-15-101(1)(a).
A written instrument includes a trust. Id.
Here, there is a supplemental needs trust, created by Ms. A~’s mother, for the benefit
of Ms. A~ during her lifetime. Ms. V~ was the named trustee. Further, upon Ms. A~’s
death, any remaining trust property is to be distributed to Ms. V~. Nonetheless, this
trust does not allow Ms. V~ to collect the underpayment as a trustee or beneficiary
for the following reasons. The supplemental needs trust does not contain a provision
specifically authorizing the transfer of the underpayment (or any other debts owed)
to Ms. V~ upon her sister’s death. Thus, the trust does not qualify as a written instrument
that would allow nonprobate transfer on death, as described above. As trustee, Ms.
V~ only had control of those assets which were included in the trust. The underpayment
was not a part of the trust property which Ms. V~ administered. Therefore, Ms. V~
does not have the authority to collect the assets of her deceased sister’s estate
and the underpayment may not be paid to Ms. V~ in her capacity as trustee. Similarly,
as a beneficiary of the trust, Ms. V~ is only entitled to any remaining trust property
upon her sister’s death. Because the underpayment was not a part of the trust property,
Ms. V~ is not entitled to the underpayment in her capacity as a beneficiary of the
D. Under Colorado law, Ms. V~ does not qualify as a legal representative under the
state’s small estates statute.
The regulations also provide that the legal representative may be a person who qualifies
under a small estate statute. 20 C.F.R. § 404.503(d)(1). Colorado’s small estate statute
provides that a successor of a decedent may collect a debt owed to the decedent by
presenting an affidavit to the debtor. C.R.S.A. § 15-12-1201(1). The affidavit must
contain the following statements:
• The value of the estate does not exceed $50,000;
• Ten days have elapsed since the death of the decedent;
• No application or petition for the appointment of a personal representative is pending
or has been granted; and
• The claiming successor is entitled to payment or delivery of the property.
Id. See also POMS GN 02315.042 (good acquittance for payment under Colorado’s small estate statute); POMS GN
02301.035C(1)(b) (documentation required to show qualification as a legal representative under
a small estate statute).
As noted above, under Colorado’s probate code, Ms. V~ appears to be a successor of
the decedent after a surviving spouse, children, or parents of Ms. A~. C.R.S.A. §
15-11-103(4). However, the value of Ms. A~’s estate exceeds $50,000. A debt owed to
a decedent is an asset of the estate. See 42 U.S.C. § 404(d)(7); see also Hoops’ Family Estate Planning Guide § 2:4 (4th ed. 1995). Because the overpayment is $99,228.67, Ms. V~ will not meet
the estate value criteria under Colorado’s small estate statute. Therefore, Ms. V~
will not qualify as a legal representative to receive the underpayment under Colorado’s
small estate statute.
We believe that applicable Colorado law relating to Ms. V~’s status as trustee does
not give her the authority to collect the assets of her deceased sister’s estate.
Additionally, Ms. V~ does not satisfy the statutory requirements to serve as a personal
representative under Colorado’s small estate statute. She could, however, apply to
be a court-appointed personal representative under Colorado’s informal proceedings.
Once Ms. V~ provides acceptable proof that she is a court-appointed legal representative
(see POMS GN 02301.035C (1) – (4)), it would put her in a position to give “good acquittance” to the agency
and allow the agency to release the underpayment to her.
Donna L. C~
Acting Regional Chief Counsel Region VIII
Nadia N. S~~
Assistant Regional Counsel
1_/ Any part of a decedent’s estate not effectively disposed of by will or otherwise
passes by intestate succession to the decedent’s heirs as prescribed by Colorado law.
Under Colorado’s intestate succession law, where, as here, there is no surviving spouse,
descendant, or parent, the estate passes “to the descendants of the decedent’s parents
or either of them per capita at each generation.” C.R.S.A. § 15-11-103(4). “Descendant”
means all of the individual’s lineal descendants of all generations. C.R.S.A. § 15-10-201(11).
2_/ To be appointed as a legal representative, the prospective representative’s application
must include: 1) a statement of the interest of the applicant; 2) the name and date
of death of the decedent, his age, and the county and state of his domicile at the
time of death, and the names and addresses of the spouse, children, heirs, and devisees,
and the ages of any who are minors so far as known or ascertainable with reasonable
diligence by the applicant; 3) if the decedent was not domiciled in the state at the
time of death, a statement showing venue; 4) a statement identifying and indicating
the address of any personal representative of the decedent appointed in this state
or elsewhere whose appointment has not been terminated; 5) a statement indicating
whether the applicant has received a demand for notice or is aware of any demand for
notice of any probate or appointment proceeding concerning the decedent that may have
been filed in this state or elsewhere; 6) a statement indicating that the time limit
for informal probate or appointment provided in this article has not expired either
because three years or less have passed since the decedent’s death or, if more than
three years have passed since the decedent’s death, because the circumstances described
in § 15-12-108 authorizing tardy probate or appointment have occurred. C.R.S.A. §