You have requested our assistance in persuading the administrator of the Woody T~
estate to refund an overpayment of Supplemental Security Income (SSI) benefits.
The facts in this case are that at the time of Mr. T~'s death, on September 30, 1988,
there was an outstanding SSI overpayment on his record of $3,010.68. In April 1989,
the Social Security Administration filed a formal claim against the decedent's estate
in the Chancery Court of Hardeman County, Tennessee. Mr. Ed J. H~, attorney for the
administrator, indicated in a letter dated June 26, 1989, that personal assets of
the estate amounted to approximately $5,300, but that these personal assets would
be exhausted by the payment of funeral expenses and costs of estate administration
including attorney's fees.
Mr. H~ indicated that the estate also included real property with an outstanding mortgage
of $57,591.15. Contact with the local tax office by the Social Security office in
Selmer, "shows the value of the property to be $101,700". Pursuant to Tennessee Code
Annotated §30-5-130 entitled "Sale Of Real Estate To Pay Debts",
When the personal estate is ascertained by the report of the clerk and master, and
the confirmation thereof by the court, to be insufficient for the payment of the debts
of the estate, the court shall direct that the real estate, subject to sale, or so
much thereof as is necessary, be sold for the payment of debts".
Thus, if there was sufficient equity in the real property to satisfy the debt of the
estate, the Administration would wish to file a Motion to Compel a Court Order Of
Sale pursuant to the above-quoted statute.
Telephone contact on April 16 and 18, 1990, with Ms. Marion N~, Clerk and Master of
the Chancery Court for Hardeman County, verified receipt of the Administration's formal
claim and verified that if there was sufficient equity in the real property, the claim
of the Social Security Administration would have to be paid before the estate could
be closed. In a further telephone conversation with Ms. N~ on May 4, 1990, she indicated
she had checked the status of the real property in question with Mr. F~, director
of the Farmers' Home Administration; the Farmers' Home Administration holds the mortgage
on the real property which was owned by Mr. T~. Mr. F~ stated that foreclosure papers
were "coming down" as $75,100 was owed on the property and it had an actual value
of "no more than $50,000". Mr. F~ indicated that the mortgage had at one time been
paid down to $30,000 or $40,000 but that unpaid interest had resulted in the current
outstanding mortgage balance of $75,100.
Ms. N~ was advised of our information that the actual value of the property was $101,700.
Ms. N~ thereupon contacted Ms. Mary P~, trustee for Hardeman County, and was informed
that the tax assessor had reappraised the real property last year. The current tax
appraisal value was given as $62,900. It, therefore, appears that the value of the
real property is, in fact, insufficient to satisfy the claim of the secured creditor,
the mortgage company, and, clearly, no assets will remain to satisfy unsecured priority
claims such as that of the Social Security Administration. Ms. N~ further noted that
the only reason the estate remains open is that there are insufficient funds to pay-the
$85 fee required to file a Motion For Insolvent Estate which would allow the estate
to close with assets insufficient to pay the debts.
Consideration may be given to having another local source appraise the real estate
to determine its actual value independent of the tax appraisal value for purposes
of verifying that the equity does not exceed the amount of the outstanding mortgage.
Nevertheless, based upon the information before us, it is our opinion that, as the
estate of Woody T~ is insolvent, no further action to recover the SSI overpayment