PS 01205.047 Tennessee

A. PS 90-002 RECOVERY OF SSI OVERPAYMENT FROM ESTATE OF WOODY T~

DATE: June 06, 1990

1. SYLLABUS

Inasmuch as the personal assets of the decedent's estate have been exhausted and as the value of the decedent's real property is insufficient to satisfy the claim of the secured creditor, it appears that no assets will remain to satisfy unsecured priority claims such as that of the Social Security Administration.

(Woody T~ - ~ - CCIV - [Walters] - to ARC, Progs., Atl., 06/06/90)

2. OPINION

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 is warranted.

B. PS 90-001 RECOVERY FROM ESTATE ADMINISTERED BY LEGAL REPRESENTATIVE - OVERPAID SSI RECIPIENT - THELMA O~

DATE: May 8, 1990

1. SYLLABUS

The United States government has a cause of action in federal courts against the personal representative of an estate where he, with notice of the government's claim, distributes the assets of the estate to inferior creditors. United States v. Vibradamp Corporation, 257 F.Supp. 931 (D.C.Cal. 1966). Nevertheless, where the government's claim is de minimus ($224) and the estate has been closed, further action to recover the overpayment would not be warranted.

(O~, Thelma - SSN ~ - CCIV - [Walters] - to ARC, Progs., Atl., 05/08/90)

2. OPINION

You have requested our assistance in obtaining a refund of an overpayment of Supplemental-Security Income (SSI) benefits. The facts, as set forth in the file, are that Thelma O~ was overpaid SSI benefits in the amount of $421.40 for the period from April 198