TN 8 (07-13)
PR 08305.026 Minnesota
A. PR 13-090 MOS – Minnesota Underpayment Claims Under Small Estate Statute
Number Holder: Thomas
DATE: June 11, 2013
Under the Social Security Act, regulations, and policy when an individual is not survived by a spouse, children, or parents, underpayments will be paid to the number holder’s legal representative. The Minnesota small estate statute provides distribution guidance in situations when more than one party qualifies to receive an underpayment as legal representative for a deceased number holder. If all claimants submit documents that meet the requirements, agency policy instructs that the underpayment should be divided equally between the entitled persons.
You asked us for an opinion concerning the payment of an underpayment due a deceased NH where two claimants have requested payment as a legal representative under the Minnesota small estate statute. Specifically, you want to know whether the documents submitted by both claimants meet the requirements for SSA to receive good acquittance and, if so, whether the Minnesota small estate statute provides any distribution guidance when more than one party qualifies as a legal representative. You also requested that we provide legal justification language to be used when notifying the claimant who does not receive the underpayment.
We conclude that both claimants meet the requirements under the Minnesota small estate statute. Under such circumstances, agency policy instructs that the underpayment should be divided equally between the entitled persons. Accordingly, we conclude that the NH’s underpayment should be paid to both claimants, divided equally.
The NH, Thomas, died on June 21, 2012, while domiciled in Minnesota. His Title II benefit payment for May 2012 was returned, creating a $1,398 underpayment.
On July 27, 2012, Daniel (who lives in Arkansas) filed a claim for payment of the NH’s underpayment (form SSA-1724). He stated that he was the NH’s brother, and that he was the legal representative of the NH’s estate. With his claim, Daniel submitted an affidavit and a copy of the NH’s death certificate.
In a letter to the Sherwood, Arkansas Social Security Office dated July 27, 2012, the Otter Tail County Attorney (located in Fergus Falls, Minnesota) stated that the County had a preferred claim against the NH’s estate since county-funded disposition services had been expended, and that it was submitting a claim pursuant to Minn. Stat. § 524.3-1201 (Minnesota small estate statute). Attached to the letter was an Affidavit for Collection of Personal Property. In the affidavit, a collections officer stated that Otter Tail County Human Services had a claim for recovery of county-funded disposition services paid on behalf of the NH under Minn. Stat. § 261.04. Also attached to the letter was a receipt from the Otter Tail County Human Services Board for payment of $1950 to a funeral home for cremation services.
At our request, the Sherwood Field Office asked Otter Tail County to submit a copy of the NH’s death certificate; the County did so in March 2013.
Under the Social Security Act (Act), regulations, and agency policy, a Title II underpayment that is due a deceased individual is paid pursuant to an order of priority. See Section 204(d) of the Act; 20 C.F.R. § 404.503; POMS GN 02301.030. When an individual is not survived by a spouse, children, or parents, the underpayment will be paid to the individual’s legal representative. See Section 204(d)(7) of the Act; 20 C.F.R. §404.503(b)(7); POMS GN 02301.030A.g.
A legal representative, for purposes of qualifying for an underpayment, is generally the administrator or executor of the estate of the deceased individual. See 20 C.F.R. § 404.503(d); POMS GN 02301.035A. However, when an estate is unadministered, as in this case, a legal representative is also defined as an individual, institution, or organization acting on behalf of the unadministered estate who/which can give SSA good acquittance. See 20 C.F.R. § 404.503(d); POMS GN 02301.035B.1. A person or entity gives SSA good acquittance when payment to that person or entity will release SSA from further liability for payment. See 20 C.F.R. § 404.503(e); POMS GN 02301.040. In accordance with 20 C.F.R. § 404.503(d), the following individuals can qualify as a legal representative, provided they can give SSA good acquittance:
a person who qualifies under a state’s small estate statute,
a resident of a foreign country who has the right to receive assets of the estate under the laws of that country,
a public administrator, or
a person who has the authority, under applicable law, to collect the assets of the estate of the deceased individual.
In determining an individual’s capacity to act as a legal representative, we apply the law of the state where the deceased individual was domiciled at the time of his death. See POMS GN 02301.035B.3. Here, the NH was domiciled in Minnesota at the time of his death, so Minnesota law applies.
Procedurally, unless the file contains sufficient information to determine the identity and current address of all persons entitled to the underpayment, a written request for payment is required from at least one person entitled to receive a portion of the underpayment. See POMS GN 02301.050A. While the applicable form (SSA-1724) is not required, a formal request for payment must contain the following information: the relationship of the applicant to the deceased, the number of persons in the highest class of priority and their names and addresses, the SSN of the applicant(s) if he has one, and whether the deceased had a surviving spouse living in the same household at the time of death. See POMS GN 02301.050B.2. Here, Daniel submitted a completed and signed form SSA-1724. Since at least one person filed a written request for payment containing the required information, it does not appear that Otter Tail County’s failure to submit one is a bar to its claim.
In order to qualify as a legal representative under a state’s small estate statute, a claimant must show evidence that the statutory requirements have been met. See POMS GN 02301.035C.1.b. Minnesota’s small estate statute is found at Minn. Stat. § 524.3-1201 et seq. Under this statute, 30 days after the death of a decedent, a person claiming to be the successor of the decedent or a state or county agency with a claim authorized by Minn. Stat. § 256B.15 (i.e., a claim for recovery of medical assistance provided under a medical assistance program) may receive a payment due the decedent by presenting the decedent’s certified death record and a proper affidavit. See Minn. Stat. § 524.3-1201(a). The affidavit must state the following:
the value of the probate estate does not exceed $50,000;
30 days have elapsed since the death of the decedent;
no application for the appointment of a personal representative is pending or has been granted in any jurisdiction; and
the claiming successor is entitled to payment or delivery of the property.
See id. A person who makes a payment pursuant to an affidavit is discharged and released to the same extent as if the claiming successor were the personal representative of the decedent. See id. § 524.3-1202.
As relevant here, the NH’s underpayment can only be paid to “a person claiming to be the successor of the decedent.” Minn. Stat. § 524.3-1201(a). Daniel , the NH’s brother, certainly qualifies as a person claiming to be a successor. Otter Tail County also meets this definition. Under Minn. Stat. § 524.1-201(38), the term “person” is broadly defined to include an organization or other legal entity. As well, the definition of “successors” includes a county government that provides the funeral and burial of a decedent. See id. § 524.1-201(51).
A claiming successor must present both the decedent’s certified death record and a proper affidavit containing the statements required by Minn. Stat. § 524.3-1201(a). Here, Daniel submitted both documents. Otter Tail County submitted a proper affidavit but did not submit the NH’s death certificate. However, we believe that the POMS, which generally appears to take a broad and inclusive approach concerning Title II underpayments due a deceased beneficiary, advises in favor of identifying and paying all possible entitled claimants. For example, POMS GN 02301.060B.1 states that, before paying an underpayment, the adjudicating office must determine, once the highest order of priority is determined, whether there are other living individuals in that category. Also, under POMS GN 02315.005B, if a person seeking legal representative status appears to meet the requirements of the small estate statute, but has not yet complied with those requirements, the field office is instructed to advise him/her to contact the appropriate civil authority for information on satisfying the state’s requirements. Taken together, these two POMS provisions support giving Otter Tail County an opportunity to complete its claim.
Based on the above authority in the POMS, we initially advised that Otter Tail County be given an opportunity to submit the NH’s death certificate. Accordingly, the Sherwood Field Office contacted Otter Tail County, and the County subsequently submitted the death certificate.
Thus, both Daniel and Otter Tail County qualify for payment of the NH’s underpayment as legal representatives of his estate under Minnesota’s small estate statute. As a result, we next determine whether Social Security law or policy provides guidance on the distribution of an underpayment when there are multiple legal representatives. The POMS instructs that, when more than one person exists in the highest order of priority, the underpayment is to be divided equally between the entitled persons. See POMS GN 02301.030B.4, GN 02301.070B.3. Accordingly, pursuant to agency policy, Daniel and Otter Tail County should each receive half of the NH’s underpayment. Payment of the NH’s underpayment to these two parties would give SSA good acquittance. See Minn. Stat. § 524.3-1202.
We note that, under the Minnesota small estate statute, Daniel may have an obligation to pay his proceeds from SSA to Otter Tail County. Under § 524.3-1201(c), a claiming successor is required to disburse the proceeds collected to “any person with a superior claim under section . . . 524.3-805.” Section 524.3-805 pertains to creditors’ claims, and provides an order of payment of claims from an estate. “Reasonable funeral expenses” and “all other claims” are second and seventh on the list, respectively. Otter Tail County appears to have a superior claim than Daniel against the NH’s estate, since the Otter Tail County paid for the NH’s disposition services (burial). This, however, would be a matter for Daniel and Otter Tail County to resolve.
For the reasons discussed above, we conclude that SSA should pay the NH’s underpayment to Daniel and Otter Tail County, divided equally. As requested, we also provide language below for notifying the claimants regarding their payments.
Donna L. Calvert
Regional Chief Counsel Region V
Assistant Regional Counsel
POMS GN 02315.061, which describes the Minnesota small estate statute, has not been updated to reflect changes to the statute effective August 2009. In November 2011, our office recommended that the POMS small estate procedures in GN 02315 be revised for the six states in the Chicago Region, including Minnesota, to reflect changes in state law. See Memorandum from Acting Reg. Chief Counsel, Chicago, to Office of Income Security Program, Request for Review of Small Estate Statutes for Chicago Region (Nov. 2, 2011).