QUESTION PRESENTED
You asked us for an opinion regarding the escheat of Social Security benefits in the
amount of $27,788.31 (the Escheated Funds) that were paid to David after his death.
Specifically, you asked whether the Social Security Administration (the agency) could
request that the State of New Jersey pay the agency $12,758.00 from the $27,788.31
that the financial institution escheated to the State to satisfy a Supplemental Security
Income (SSI) overpayment incurred by David, the deceased.
OPINION
The agency should contact the State of New Jersey, Unclaimed Property Administration
(NJ UPA) to recover the funds.
BACKGROUND
The information you provided indicates that David had been receiving Social Security
benefits under Titles II and XVI of the Social Security Act when he died on June 11,
2006. Social Security payments were directly deposited into the account of David at
Bank of America (the financial institution) after he died on June 11, 2006. Funds
were directly deposited into the account from July 2006, through October 2009, resulting
in an overpayment of Title II and Title XVI benefits. The financial institution advised
that it had escheated $27,788.31 from David’s account to the NJ UPA on October 19,
2010. The agency recouped the Title II overpayment, but the SSI overpayment in the
amount of $12,758.00 remains outstanding. The agency now wants the State of New Jersey
to pay the agency $12,758.00 from the $27,788.31 to satisfy the deceased’s SSI overpayment.
GOVERNING LAW AND REGULATIONS
The Social Security Program Operations Manual Systems (“POMS”) recognize that under
various state laws, money in a financial institution account may revert to the state,
a process known as “escheat,” when that account has been inactive for a period of
years. POMS GN
02408.750.A. The POMS provide that, when notified of a recent or upcoming escheat involving
Social Security benefits, the agency will attempt to recover the funds pursuant to
advice from the Regional Chief Counsel. POMS GN 02408.750.B. The agency’s recovery actions could involve requesting return of the funds from
the financial institution, the state where the money escheated, or the beneficiary’s
estate. POMS GN 02408.750.B.
The laws on escheat vary in different states. In the State of New Jersey, property
that has remained unclaimed by the owner for more than three years is presumed abandoned.
N.J.S.A. 46:30B-7; 46:30B-18. A person holding property that is presumed abandoned
is required to report and deliver that property to the State Treasurer, who serves
as Administrator of the NJ UPA (the Administrator). N.J.S.A. 46:30B-46 to 46:30B-49;
N.J.S.A. 46:30B-6(a). Upon payment or delivery of the property to the Administrator,
the Administrator assumes custody and responsibility for the safekeeping of the property.
N.J.S.A. 46:30B-61. The person or entity who paid or delivered the property to the
Administrator (“the holder”) is relieved of all liability relating to the property.
Id. The Administrator will defend the holder against other claims on the property and
indemnify the holder against any liability on the claim to the extent of the value
of the property paid and delivered to the Administrator. N.J.S.A. 46:30B-65.
Once in the custody of the Administrator, the property is placed in the Unclaimed
Personal Property Trust Fund. N.J.S.A. 46:30B-74. Title to the unclaimed property
remains in the owner, and a person—including an agency of the Federal government—may
make a claim to the escheated property at any time in perpetuity. N.J.S.A. 46:30B-77,
46:30B-6(l). Unclaimed property held by the state may be identified by searching www.missingmoney.com,
a database of unclaimed property records to which the State of New Jersey contributes.
Any person claiming an interest in property identified on the website may file a claim
online after performing a successful online search. A claim may also be sent directly
to the NJ UPA.
The Administrator must consider the claim within 120 days and provide notice of its
decision to the claimant. N.J.S.A. 46: 30B-78. If the claim is allowed, the Administrator
shall pay or deliver the property to the claimant, including any interest earned on
the property while the property was in the custody of the Administrator. N.J.S.A.
46:30B-79. If the claim is denied, the claimant may appeal the Administrator’s final
decision in the Appellate Division of the Superior Court of New Jersey. N.J.S.A. 46:30B-84.
ANALYSIS
In this case, the agency should recover the $12,758.00 from the Escheated Funds from
the NJ UPA. Pursuant to New Jersey law, the financial institution has been relieved
of liability relating to the Escheated Funds. N.J.S.A. 46:30B-61. Thus, the financial
institution is not liable to refund the money to the agency, and the agency should
file a claim with the NJ UPA.
For your convenience, we have attached a sample letter that you may use. The letter
should include David’s name, Social Security number, and his last known address. It
should also include the name of the person at the agency who is legally authorized
to receive the funds, as well as a telephone number and e-mail address. The letter
should also provide any supporting documentation that supports the agency’s claim
to the Escheated Funds.
The letter should be mailed to:
State of New Jersey
Unclaimed Property Administration
P.O. Box 214
Trenton, NJ 08695-0214
ATTN: Claims Section
Mary Ann Sloan
Acting Regional Chief Counsel, Region II
By: _____________
David L. Brown
Assistant Regional Counsel