TN 9 (02-14)

PR 08305.011 Florida

A. PR 14-041 Settlement of Claims and Debts – Florida Summary Administration

DATE: January 7, 2014

1. SYLLABUS

Florida law provides that debtors of the decedent are authorized to comply with the Order of Summary Administration by paying to those specified in the order that part of the decedent’s estate assigned to them by the order and the persons so paying shall not be accountable to anyone else for the property. A debtor (the agency in this case) complying with this section will not be accountable to anyone else for the property. POMS specifies that, under these circumstances, the debtor will have good acquittance. POMS GN 02315.046 (citing Fla. Stat. Ann. § 735.206). Thus, to the extent SSA determines the underpayment is due to the legal representative of the NH’s estate and concludes Deborah and AHCA qualify as the legal representative(s) of the NH’s estate, POMS seems to indicate that the agency could distribute the underpayment as described in the Order. That is, the agency is not bound by the state court order, as explained above. However, the Order can provide a basis for an SSA determination that Deborah and AHCA qualify as the legal representative(s) of the NH’s estate, in the proportions specified in the court order, and the Order can provide good acquittance for SSA’s release of the underpayment to Deborah and AHCH.

2. OPINION

QUESTION PRESENTED

A Florida Circuit Court has issued an Order of Summary Administration (Order) directing the agency to distribute a $9,162 underpayment owed to number holder Bruce (NH) to Deborah (Debra) and the State of Florida Agency for Healthcare Administration (AHCA). You have asked if the agency can distribute the underpayment owed to the NH as directed in the Order.

OPINION

The agency is not bound by the state court order and submitting to the Order would be a violation of section 207 of the Social Security Act (Act). Further, the Order cannot alter the priority of those who can receive an underpayment under section 204(d) of the Act. Nevertheless, if you determine “the legal representative of the estate” has the highest priority to receive the underpayment under section 204(d), the Order can provide support for your determination of whether Deborah or AHCA or both can qualify as the legal representative of NH’s estate and could provide evidence of whether one or both can provide good acquittance to relieve SSA from any further liability for payment of the underpayment.

BACKGROUND

The NH died on February 9, 2011, while domiciled in Polk County, Florida. The death certificate indicates that the NH was widowed. It names the NH’s parents, but does not indicate whether they are deceased. The only other relative the certificate lists is Debra, who is identified as the NH’s sister.

On November 5, 2011, Debra, by her attorney, Eric, Esq., published a notice to creditors in The Polk County Democrat that a petition for summary administration had been filed in the Circuit Court for Polk County, Florida, Probate Division for the NH’s estate. The notice indicated that the value of the NH’s estate was $9,162 and that Debra was the person to whom the estate had been assigned. The notice to creditors also indicated that all interested parties must file their claims or demands against the NH’s estate with the probate court within the later of three months after the publication of the notice to creditors or within 30 days of receiving a copy of the notice to creditors if it was served upon the party.

Based on a petition filed by Debra, the Polk County Circuit Court, Probate Division, issued the Order (Intestate) on April 23, 2012, finding that: the NH died on February 9, 2011; all interested persons were either properly served or waived notice; the allegations of the petition were true; Debra advanced attorney’s fees and costs; and the NH’s estate qualified for summary administration. The court directed the agency to distribute the NH’s unpaid Social Security benefits totaling $9,162.00, in separate checks to Debra (a Class 1 creditor) in the amount of $1,973.22, and to AHCA (a Class 3 creditor) in the amount of $7,188.78. The Order also indicates “[t]hose to whom specific parts of the decedent’s estate are assigned by this Order shall be entitled to receive and collect the same, and to maintain actions to enforce that right.” Further, the court said, once the agency complied with the directive to pay Debra and AHCA, the agency “so paying, delivering, or transferring shall not be accountable to anyone else for the property.”

Eric sent the agency’s Egg Harbor field office a letter, dated June 3, 2012, which included the NH’s Florida Certification of Death as well as the Order. Eric requested that the agency issue a check payable to Debra for $1,973.2 and a check payable to the AHCA for $7,188.78.

Eric also sent a letter to Debra on June 4, 2012, which enclosed a fee statement and a copy of the notice to creditors.

You have informed us that there is an underpayment on the NH’s record in the amount of $9,162.00, for benefits that were due to the NH prior to his death.

ANALYSIS

I. The Order is an Invalid Assignment Under Section 207 of the Act

The Order, to the extent it operates as an assignment of benefits, would be invalid under section 207 of the Act. That section states,

The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.

Act § 207. An “assignment” is “the transfer of the right to, or payment of, benefits to a party other than the beneficiary (or his/her representative payee). POMS GN 02410.001B.1. Legal process is the means by which a court (or agency or official authorized by law) compels compliance with its demand; generally, it is a court order. POMS GN 02410.001B.2. Under the statutory definition, the Order is an invalid assignment under section 207 of the Act. Further, the agency is not bound by the state court order and submitting to Order would be a violation of section 207 of the Social Security Act (Act). Additionally, the Order cannot alter the priority of those who can receive an underpayment under section 204(d) of the Act. The Order’s sole value, for the agency’s purposes, is in determining who may be the “legal representative” and who can provide “good acquittance” under section 204(d) of the Act, as described below.

II. Agency Procedures for Distributing a Title II Underpayment

If an underpaid individual dies before receiving a Title II payment, the agency first applies any amounts due to the deceased individual against any overpayment owed by the deceased individual, unless recovery of such overpayment has been waived. Act § 204(a)(1)(A); 20 C.F.R. § 404.503(a). There is no overpayment on the NH’s record. The agency then distributes any remaining underpayment to the living person (or persons) in the highest order of priority as set forth in the Act § 204(d) and 20 C.F.R. § 404.503(b)(1)-(7). Priority is given first to the deceased individual’s surviving spouse who was either living in the same household with the deceased individual at the time of the individual’s death or is entitled to a monthly benefit on the basis of the same earning record as was the deceased individual. Act § 204(d); 20 C.F.R. § 404.503(b)(1); Program Operations Manual System (POMS) GN 02301.030A. Subsequent priority in descending order is given to a qualified child or children, qualified parent or parents, and then to the surviving spouse, child/children, or parent(s) of the deceased who do not otherwise qualify Act § 204(d); 20 C.F.R. § 404.503(b)(2)-(6); POMS GN 02301.030A. Where the claimant is not survived by a spouse, child/children, or parent(s), the underpayment must be made to the legal representative of the deceased individual’s estate, if any. Act § 204(d); 20 C.F.R. § 404.503(b)(7); POMS GN 02301.030A. A legal representative may include an individual acting on behalf of an unadministered estate, provided that individual can give the agency “good acquittance.” A person is considered to give the agency “good acquittance” when payment to that person will release the agency from further liability for such payment. 20 C.F.R. § 404.503(e); POMS GN 02301.040. In the underpayment context, this means that the individual has attested that there is no one of higher priority who could claim an underpayment and the agency has determined that this is true. POMS GN 02301.040. 20 C.F.R. § 404.503(d)(1); POMS GN 02301.035B.1. This includes a person who qualifies as a legal representative under a state’s small estate statutes. 20 C.F.R. § 404.504(d)(1); POMS GN 02301.035B.1. It also includes a person with authority under applicable law to collect the assets of the deceased individual’s estate. 20 C.F.R. § 404.503(d)(4). The person seeking qualification under the small estate statutes must also show evidence that the statutory requirements have been met. POMS GN 02301.035C.1.b. A person seeking qualification based on a right to collect the assets of the deceased’s estate must show some authority, such as an affidavit or copy of a court order, to collect the assets. POMS GN 02301.035C.1.c.

The law determining a person’s capacity to act as legal representative of a deceased beneficiary’s estate is the law of the State in which the deceased individual was domiciled on the date of his death. POMS GN 02301.035B.3; GN 02315.005.

The NH was domiciled in Polk County, Florida, at the time of his death. Thus, Florida law governs. Additionally, the agency would need to determine whether a spouse, child, or parent survived the NH. To make this determination, the agency must look to evidence the current claimants present and any other information the agency has available. If the agency determines no individual of higher priority exists, the agency can release the underpayment to the legal representative of the NH’s estate.

III. Relevant State Law

The Florida Small Estate Statute provides for summary administration of a small estate. Fla. Stat. Ann. §§ 735.201 – 735.203, 735.2055, 735.206, and 735.2063 (West 2013); POMS GN 02315.046. Under Florida law, summary administration is available for the administration of a decedent’s estate when it appears:

1) In a testate estate, that the decedent’s will does not direct administration as required by the [probate code for administration of estates]; or

2) That the value of the entire estate subject to administration … does not exceed $75,000 or that the decedent has been dead for more than 2 years.

Fla. Stat. Ann. § 735.201; POMS GN 02315.046B. Any beneficiary or person nominated as personal representative in the decedent’s will may petition for summary administration of the estate. Fla. Stat. Ann. § 735.203(1); POMS GN 02315.046B.1. The court may enter a summary administration order, which allows immediate distribution of assets to persons entitled to them. Fla. Stat. Ann. § 735.201(3). A person assigned specified parts of the decedent’s estate is entitled to “receive and collect the parts.” Fla. Stat. Ann. § 735.201(4)(a). Those holding property of the decedent are authorized to comply with the order by paying to those specified in the order the parts of the decedent’s estate assigned to them by the order, and the persons so paying shall not be accountable to anyone else for the property. Fla. Stat. Ann. § 735.206(4)(b); POMS GN 02315.046. According to the POMS, if the agency complies with this section, it will have good acquittance. POMS GN 02315.046.

IV. Analysis of the Evidence

In this case, the Order provides that the NH died intestate and that the NH’s estate qualified for summary administration. Thus, summary administration is available for the administration of the NH’s estate. The Order also entitles Debra and AHCA to receive and collect portions of the NH’s estate, namely, shares of the underpayment. The Order also gives the agency good acquittance, stating the agency would not be accountable to anyone else for the underpayment if it distributes the underpayment according to the Order. If the agency is convinced that no individual of higher priority exists, the agency can distribute the underpayment to Debra and AHCA, as the “legal representative” of the NH’s estate, according to the court’s order. POMS GN 02315.005.

Florida law provides that debtors of the decedent are authorized to comply with the Order of Summary Administration by paying to those specified in the order that part of the decedent’s estate assigned to them by the order and the persons so paying shall not be accountable to anyone else for the property. A debtor (the agency in this case) complying with this section will not be accountable to anyone else for the property. POMS specifies that, under these circumstances, the debtor will have good acquittance. POMS GN 02315.046 (citing Fla. Stat. Ann. § 735.206). Thus, to the extent SSA determines the underpayment is due to the legal representative of the NH’s estate and concludes Debra and AHCA qualify as the legal representative(s) of the NH’s estate, POMS seems to indicate that the agency could distribute the underpayment as described in the Order. That is, the agency is not bound by the state court order, as explained above. However, the Order can provide a basis for an SSA determination that Debra and AHCA qualify as the legal representative(s) of the NH’s estate, in the proportions specified in the court order, and the Order can provide good acquittance for SSA’s release of the underpayment to Debra and AHCH.

CONCLUSION

Provided Debra and AHCA can show that there is no individual of higher priority entitled to receive the underpayment, the agency can distribute the underpayment to them, as the legal representative of the NH’s estate, as described in the court’s order.

B. PR 07-168 Payment of Underpayment to Alleged Representative of Unadministered Estate Applicant: Frances Deceased Number Holder: Van

DATE: July 3, 2007

1. SYLLABUS

In Florida, in disposing of personal property without administration, FLA. STAT. ANN. § 735.301 (2007) and FLA. PROB. R. Rule 5.420 (2007) govern. See POMS GN 02315.046(C). This method of settlement is available only to estates consisting entirely of personal property which is either exempt under § 732.402 or exempt from creditors' claims under the constitution of Florida, or nonexempt personal property the value of which does not exceed the sum of the amount of preferred funeral expenses and reasonable and necessary medical and hospital expenses of the last 60 days of illness. FLA. STAT. ANN. § 735.301(2); see also Coral Gables First Nat. Bank v. Hart, 155 So. 2d 647 (Fla. 1945) (discussion of no administration necessary statute). An interested person may request a disposition of the decedent's personal property without administration by submitting an application to the Florida court which sets forth:

the description and value of the exempt property;

the description and value of other assets of the decedent;

the amount of preferred funeral expenses and reasonable and necessary medical and hospital expenses for the last 60 days of the last illness together with accompanying statements or payments receipts; and

each requested payment of distribution of personal property.

FLA. PROB. R. Rule 5.420(a) (2007). If the court is satisfied that disposition without administration is appropriate, the court may, without hearing, by letter or other writing authorize the payment, transfer, or disposition of the decedent's personal property to those persons entitled to it. FLA. PROB. R. Rule 5.420(d); FLA. STAT. ANN. § 735.301(2).

Pursuant to Florida law, Applicant would need to submit the affidavit along with the other information required by FLA. PROB. R. Rule 5.420(a) to the Florida court for a determination as to whether a disposition of NH's estate without administration is appropriate. If the court is satisfied that a disposition without administration is appropriate, the court will provide documentation authorizing the payment, transfer, or disposition of NH's personal property to those persons entitled. If a Florida court determines Applicant is entitled to NH's personal property under Florida law, she can present this documentation to SSA and this documentation would entitle Applicant to receive the underpayment. POMS GN 02315.046(C). However, if the court determines that Applicant is not entitled to NH's personal property under Florida law, then SSA must deny Applicant's request for underpayment. If an individual clearly does not meet the criteria for status as a legal representative under the small estate statute and there is no evidence she is seeking legal representative status for other than Title II underpayment, as is the case here, SSA must deny the request for the underpayment. POMS GN 02315.001(B)(2).

2. OPINION

QUESTION

You have asked whether a Social Security Title II underpayment may be paid to an applicant alleging to be the legal representative of an unadministered estate where the deceased number holder was domiciled in Florida on the date of his death.

ANSWER

We conclude the applicant has not presented adequate proof that she is entitled to the number holder's underpayment as the legal representative of the number holder's unadministered estate. To qualify, she would need to present an application to the proper Florida court for a determination as to whether a disposition of the number holder's estate without administration is appropriate. If the court is satisfied that a disposition without administration is appropriate, the court will provide documentation authorizing the payment, transfer, or disposition of the number holder's personal property to those persons entitled. If the court determines the applicant is entitled to that property, she can present the court documentation to the Social Security Administration (SSA) and she will be entitled to the underpayment.

BACKGROUND

Van, the number holder (NH), was found entitled to a Title II underpayment in the amount of $1,456.00. NH died while domiciled in Florida on January 2, 2007. Frances Arthur, NH's sister (Applicant), filed a claim for NH's underpayment. She also submitted a notarized "Affidavit Concerning Administration of the Estate of Decedent." Applicant stated in the Affidavit that it was "executed for the sole purpose of notifying social security of heirs and expectations of payment of benefits returned to you by Suwwanne Valley Nursing Center."

She stated that the only other surviving heir was NH's brother, Ronnie.

DISCUSSION

If an individual dies before any payment due to him under Title II of the Social Security Act is completed, payment must be made under the following order of priority:

to the surviving spouse who was either living in the same household as the deceased at the time of death or who, for the month of death, was entitled to a monthly benefit on the same record as the deceased beneficiary.

to the child who, for the month of death, was entitled to a monthly benefit on the same earnings record as the deceased.

to the parent who, for the month of death, was entitled to a monthly benefit on the same earnings record as the deceased.

to the surviving spouse not qualified under a. above.

to the child not qualified under b. above.

to the parent not qualified under c. above.

to the legal representative of the deceased person's estate.

See § 204(d) of the Social Security Act (Act), 42 U.S.C. § 404(d); 20 C.F.R. § 404.503(b) (2006); POMS GN 02301.030.

Here, Applicant alleges she is the legal representative of NH's unadministered estate. The term "legal representative" for purpose of qualifying to receive an underpayment, generally means the administrator or executor of the estate of the deceased individual. See 20 C.F.R. § 404.503(d) (2006). It may also include an individual, institution, or organization action on behalf of an unadministered estate, as Applicant alleges here. Id. The person acting on behalf of an unadministered estate will be considered the legal representative if she provides SSA proof of "good acquittance." See Id.; POMS GN 02301.035(A), (B)(1). The person is considered to give SSA "good acquittance" when payment to that person will release SSA from further liability for such payment. See 20 C.F.R. § 404.503(e) (2006); POMS GN 02301.040. This means the individual has attested that there is no one of higher priority who could claim an underpayment and SSA determines that this is true. POMS GN 02301.040. The following persons may qualify as a legal representative provided they can give SSA evidence of good acquittance:

1. A person who qualifies under a State's small estate statute,

2. A person resident in a foreign country who, under the laws and customs of that country, has the right to receive assets of the estate,

3. A public administrator, or

4. A person who has the authority, under the applicable law, to collect the assets of the estate of the deceased individual.

See 20 C.F.R. § 404.503(d)(1-4) (2006). Here, (2) and (3) are not applicable.

The evidence required to determine if a person qualifies as a legal representative depends on the method under which the person seeks to qualify. POMS GN 02301.035(C)(1). If a person is seeking qualification based on her right to collect the assets of the deceased's estate, then an affidavit or a copy of a court order may be acceptable proof to show some authority for her to collect the assets. POMS GN 02301.035(C)(1)(c). Here, Applicant submitted a notarized "Affidavit Concerning the Administration of Estate of Decedent." This document was only signed by Applicant and a notary. The information provided in this affidavit does not show any authority for Applicant to collect NH's overpayment. As stated in the affidavit, the sole purpose of the affidavit was to notify SSA of heirs and expectations of payments of benefits returned to Applicant by Suwwanne Valley Nursing Center. This appears to be an affidavit which would more appropriately be used to seek qualification under the small estate statute. If a person is seeking qualification under a small estate statute, the person must show evidence that the statutory requirements have been met. POMS GN 02301.035(C)(1)(b). As NH was domiciled in Florida at the time of death, we look to Florida law. POMS GN 02301.035(B)(3).

In Florida, in disposing of personal property without administration, FLA. STAT. ANN. § 735.301 (2007) and FLA. PROB. R. Rule 5.420 (2007) govern. See POMS GN 02315.046(C). This method of settlement is available only to estates consisting entirely of personal property which is either exempt under § 732.402 or exempt from creditors' claims under the constitution of Florida, or nonexempt personal property the value of which does not exceed the sum of the amount of preferred funeral expenses and reasonable and necessary medical and hospital expenses of the last 60 days of illness. FLA. STAT. ANN. § 735.301(2); see also Coral Gables First Nat. Bank v. Hart, 155 So. 2d 647 (Fla. 1945) (discussion of no administration necessary statute). An interested person may request a disposition of the decedent's personal property without administration by submitting an application to the Florida court which sets forth:

(5) the description and value of the exempt property;

(6) the description and value of other assets of the decedent;

(7) the amount of preferred funeral expenses and reasonable and necessary medical and hospital expenses for the last 60 days of the last illness together with accompanying statements or payments receipts; and

(8) each requested payment of distribution of personal property.

FLA. PROB. R. Rule 5.420(a) (2007). If the court is satisfied that disposition without administration is appropriate, the court may, without hearing, by letter or other writing authorize the payment, transfer, or disposition of the decedent's personal property to those persons entitled to it. FLA. PROB. R. Rule 5.420(d); FLA. STAT. ANN. § 735.301(2).

Pursuant to Florida law, Applicant would need to submit the affidavit along with the other information required by FLA. PROB. R. Rule 5.420(a) to the Florida court for a determination as to whether a disposition of NH's estate without administration is appropriate. If the court is satisfied that a disposition without administration is appropriate, the court will provide documentation authorizing the payment, transfer, or disposition of NH's personal property to those persons entitled. If a Florida court determines Applicant is entitled to NH's personal property under Florida law, she can present this documentation to SSA and this documentation would entitle Applicant to receive the underpayment. POMS GN 02315.046(C). However, if the court determines that Applicant is not entitled to NH's personal property under Florida law, then SSA must deny Applicant's request for underpayment. If an individual clearly does not meet the criteria for status as a legal representative under the small estate statute and there is no evidence she is seeking legal representative status for other than Title II underpayment, as is the case here, SSA must deny the request for the underpayment. POMS GN 02315.001(B)(2).

CONCLUSION

At this present time, Applicant has not presented adequate proof that she entitled to receive NH's underpayment as the legal representative of NH's estate. Therefore, Applicant is not entitled to NH's underpayment.

Mary A. S~

Assistant Regional Counsel

Simone D. P~
Assistant Regional Counsel


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/1508305011
PR 08305.011 - Florida - 02/10/2014
Batch run: 10/10/2017
Rev:02/10/2014