TN 5 (04-09)

PR 08305.040 Oklahoma

A. PR 09-030 Good Acquittance Requirements for Underpayment Due an Unadministered Oklahoma Estate (NH James B~ SSN ~) - REPLY

DATE: December 12, 2008

1. SYLLABUS

Under Oklahoma law, the courts must appoint an administrator for the estate of a person who died intestate so that the administrator can take possession of estate assets, settle estate claims, and inventory estate assets for the Court's ultimate distribution to the heirs. Oklahoma law requires court documentation of appointment of an administrator even in small estates. There are two exceptions under Oklahoma state law which dispense with the requirement that a small estate have a court-appointed legal representative.

Under the first exception, when an adult ward dies intestate leaving only personal property that does not exceed $10,000, his guardian can act as the estate's personal representative. To qualify for this exception, an individual must establish that during the decedent's life a court appointed the individual as guardian, that the decedent died leaving only personal property, and that the personal property did not exceed $10,000.

The second exception to the general small estate statute, a person claiming to be the successor of the decedent/ can demand payment of a debt owed to the decedent by presenting a successor affidavit to the person owing the debt ten or more days after the death of the decedent. The successor affidavit must be made by or on behalf of the successor and state that:

  1. the fair market value of property located in the state owned by the decedent at the time of his death, less liens and encumbrances, does not exceed $20,000,

  2. no application or petition for appointment of a personal representative is pending or has been granted in any jurisdiction,

  3. each claiming successor is entitled to payment in proportion set out in the affidavit, and

  4. all taxes and debts of the estate have been paid, provided for, or are barred by limitations.

Such a successor affidavit can provide the Agency good acquittance because Oklahoma law states that any person making payment under this provision "is discharged and released to the same extent as if the person dealt with a personal representative of the decedent.

Thus, barring the appointment of a court-appointed legal representative, good acquittance cannot be met until the petitioning party submits a proper successor affidavit containing the elements required under Oklahoma law .

2. OPINION

This memorandum is in response to your request for an opinion regarding whether the Social Security Administration (Agency) can release to an only known surviving relative a $5206.00 Title II disability benefit underpayment owed a deceased number holder, where the court has not appointed the relative as an administrator of the estate. As you noted, the answer to your question depends upon whether the surviving relative (1) qualifies under a small estate statute to act on behalf of the deceased number holder's estate and (2) can give the Agency good acquittance/ for release of the underpayment. Although Program Operations Manual System (POMS) GN 02315.074 indicates that Oklahoma law requires court documentation of appointment of an administrator even in small estates, we note that Oklahoma law has changed since the Agency last updated this POMS section. The Oklahoma small estate statute now permits a successor to act on certain small estates' behalves by preparing a successor affidavit, without the need to seek court appointment of an administrator. Nevertheless, because the deceased number holder's only known surviving relative has not submitted such a successor affidavit to the Agency providing good acquittance, it is our opinion that the Agency cannot yet release the underpayment to him.

As we understand the facts, James B~ (Mr. B~), the number holder, died in November 2007 while domiciled in Oklahoma. After Mr. B~’s death, the Agency adjudicated a Title II disability application and concluded that Mr. B~ was underpaid $5206.00 in Title II disability benefits. On February 17, 2008, Mike H~ (Mr. H~) filed a claim form, requesting that the Agency pay the underpayment to him as Mr. B~ legal representative. Mr. H~ stated that Mr. B~ had no surviving widow, children, or parent. Mr. H~ does not indicate whether Mr. B~ has any surviving siblings or whether Mr. H~'s parents are deceased. In support of his claim for the payment, Mr. H~ submitted a letter from the Billings Fairchild Center, a development home in Oklahoma where Mr. B~ was living at the time of his death. The letter asked Mr. H~ to sign a consent for Mr. B~ treatment. Mr. H~ also submitted documents from Countryside Funeral Home in Kansas that identified Mr. H~ as Mr. B~'s cousin and next of kin. Finally, Mr. H~ submitted a statement indicating that he contacted an attorney for help in filing to become the administrator of Mr. B~'s estate. Mr. H~ stated that the attorney told him that because Mr. B~ was indigent with no estate and basically a ward of the state, no administration of the estate was necessary.

The Social Security Act (Act) provides that when the Agency finds it paid less than the correct amount of Title II benefits to a beneficiary, it must pay the underpaid amount to the beneficiary or, if the beneficiary is deceased, to the persons with the highest priority for receipt of the underpayment. 42 U.S.C. § 404(a)(1) (2008). The Act defines seven descending levels of priority for receipt of an underpayment due a deceased beneficiary, the last of which is the legal representative of the estate. 42 U.S.C. § 404(d) (2008); see 20 C.F.R. § 404.503(b) (2008).

Generally, the legal representative of the estate will be the person appointed by a court of competent jurisdiction as its executor or administrator. 20 C.F.R. § 404.503(d) (2008). However, legal representatives may also include certain individuals, institutions, or organizations acting on behalf of an unadministered estate if any such person can give the Agency good acquittance. Id. One of the persons who can give good acquittance is a person who qualifies to act on an estate's behalf under a state's small estate statute. 20 C.F.R. 404.503(d)-(e) (2008). In determining which state's small estate statute to apply, the Agency looks to the laws of the state where the beneficiary was domiciled at the time of his death. See Ennis v. Smith, 55 U.S. (14 How.) 400, 401 (1852); see also Pfeifer v. Wright, 34 F.2d 690, 691 (N.D. Okla. 1929) (law of the decedent's domicile controls the distribution of personal property). Because Mr. B~ was domiciled in the state of Oklahoma at the time of his death, the Agency must consider Oklahoma law to determine whether Mr. H~ is qualified to act on the estate's behalf under the Oklahoma small estate statute and can give the Agency good acquittance.

As a general rule in the state of Oklahoma, the courts must appoint an administrator for the estate of a person who died intestate so that the administrator can take possession of estate assets, settle estate claims, and inventory estate assets for the Court's ultimate distribution to the heirs. Okla. Stat. tit. 58, §§ 122, 631 (2008). The general small estate statute in Oklahoma follows this rule. For estates in which it appears the value of real and personal property does not exceed $150,000, the Oklahoma small estate statute dispenses with certain court formalities in administering the estate./ Okla. Stat. tit. 58, § 241 (2008). This statute does not dispense with the requirement that the court appoint a legal representative. Id. Thus, the Agency still requires proper documentation of the court's appointment of an administrator for an estate that only qualifies under the general small estate statute.

However, two exceptions under Oklahoma state law dispense with the requirement that a small estate have a court-appointed legal representative. Under the first exception, when an adult ward dies intestate leaving only personal property that does not exceed $10,000, his guardian can act as the estate's personal representative./ Okla. Stat. tit. 30, § 4-805 (2008). To qualify for this exception, an individual must establish that during the decedent's life a court appointed the individual as guardian, that the decedent died leaving only personal property, and that the personal property did not exceed $10,000. Id. The guardian's surety on his bond is responsible for the faithful administration and distribution of the estate. Id.

Under the second exception to the general small estate statute, a person claiming to be the successor of the decedent/ can demand payment of a debt owed to the decedent by presenting a successor affidavit to the person owing the debt ten or more days after the death of the decedent. The successor affidavit must be made by or on behalf of the successor and state that:

  1. the fair market value of property located in the state owned by the decedent at the time of his death, less liens and encumbrances, does not exceed $20,000,

  2. no application or petition for appointment of a personal representative is pending or has been granted in any jurisdiction,

  3. each claiming successor is entitled to payment in proportion set out in the affidavit, and

  4. all taxes and debts of the estate have been paid, provided for, or are barred by limitations.

Okla. Stat. tit. 58, § 393 (2008). Such a successor affidavit can provide the Agency good acquittance because Oklahoma law states that any person making payment under this provision "is discharged and released to the same extent as if the person dealt with a personal representative of the decedent." Okla. Stat. tit. 58, § 394 (2008). This is true even if the Agency does not inquire into the truth of any statement in the successor affidavit. Id. In Oklahoma, an affidavit is a written declaration, under oath. Okla. Stat. tit. 12, § 422 (2008). The individual making the affidavit must have his oath certified by a duly appointed notary public in Oklahoma. Okla. Stat. tit. 49, § 112 (2008). In lieu of a notarized, sworn affidavit, the individual can alternatively prepare a written, unsworn statement that is signed under penalty of perjury, setting forth the date and place of execution and that it is made under the laws of Oklahoma./ Okla. Stat. tit. 12, § 426 (2008).

Here, Mr. H~ submitted documents indicating that Mr. B~’s estate is unadministered, and that Mr. B~ was indigent and basically a ward of the state. Mr. H~ does not provide an estimate of the fair market value of Mr. B~’s estate or indicate whether the estate included any real or personal property, other than the Title II benefit underpayment. This is insufficient evidence to permit the Agency to pay the underpayment to Mr. H~ under either of the Oklahoma small estate statute exceptions. Mr. H~ does not qualify under the first exception because there is no evidence that Mr. H~ was Mr. B~'s court-appointed legal guardian. Indeed, Mr. H~'s statement that Mr. B~ was basically a ward of the state clearly suggests that Mr. H~ was not Mr. B~'s legal guardian. We also note that it does not appear that under Oklahoma law Mr. H~ could give the Agency good acquittance even if he were to produce evidence that the court had appointed him Mr. H~'s legal guardian. Unlike the second exception, which explicitly discharges and releases any person making a payment after receipt of a successor affidavit, the first exception provides that the guardian's surety on his bond will be responsible for his faithful administration and distribution of the estate. Okla. Stat. tit. 30, § 4-805 (2008). The exception does not address whether the Agency's payment to the guardian would release the Agency from any future liability. In addition, there is no evidence in the record that there is even a surety involved. Accordingly, the Agency cannot pay the underpayment to Mr. H~ under the first exception.

Although a successor affidavit under the second exception to the general small estate statute can provide good acquittance, the Agency also cannot pay the underpayment to Mr. H~ under the second exception unless Mr. H~ provides the Agency with a proper successor affidavit. If Mr. B~estate is as limited as Mr. H~ alleges, Mr. H~ is likely qualified to make such a successor affidavit, given the facts as we understand them. Specifically, it appears that Mr. H~ is Mr. B~’s successor, being a lineal descendent of Mr. B~’s grandparents and Mr. B~’s only known surviving relative. In addition, Mr. H~'s statement that Mr. B~ died indigent with no estate suggests that Mr. B~’s estate has a fair market value not in excess of $20,000. Mr. H~ also indicates that Mr. B~’s estate is unadministered, which suggested that no petition for appointment of a personal representative is pending or has been granted. Nevertheless, Mr. H~ cannot give the Agency good acquittance until he submits a proper successor affidavit containing the elements required under Oklahoma law that we discussed above. Should Mr. H~ provide the Agency with a successor affidavit that complies with Section 393, Title 58 of the Oklahoma Statutes, the Agency would have good acquittance to permit it to pay Mr. H~ the Title II benefit underpayment that was due Mr. B~ because payment to Mr. H~ will release the Agency from further liability for such payment.

For the above reasons, we believe that Mr. H~ has not yet provided the Agency good acquittance, and the Agency currently cannot release the underpayment to him. If Mr. H~ submits to the Agency a proper successor affidavit that complies with Oklahoma law, it is our opinion that this would give the Agency good acquittance for releasing the underpayment to Mr. H~.

Michael M~
Acting Regional Chief Counsel

By:__________________________
James D. S~
Assistant Regional Counsel


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PR 08305.040 - Oklahoma - 04/02/2009
Batch run: 04/02/2009
Rev:04/02/2009