BASIC (04-12)

PS 01220.033 New Jersey

A. PS 12-058 David SSN~ – Escheat Case

DATE: February 17, 2012

1. SYLLABUS

The opinion provides the action to take to request funds from the State when a beneficiary dies and the Social Security deposits benefits in a bank account after death and those funds are escheated to the State.

2. OPINION

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


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/1601220033
PS 01220.033 - New Jersey - 04/30/2012
Batch run: 04/30/2012
Rev:04/30/2012