QUESTION PRESENTED
A Florida Circuit Court has issued an Order of Summary Administration (Order) directing
the agency to distribute a $9,162 underpayment owed to number holder Bruce (NH) to
Deborah (Debra) and the State of Florida Agency for Healthcare Administration (AHCA).
You have asked if the agency can distribute the underpayment owed to the NH as directed
in the Order.
OPINION
The agency is not bound by the state court order and submitting to the Order would
be a violation of section 207 of the Social Security Act (Act). Further, the Order
cannot alter the priority of those who can receive an underpayment under section 204(d)
of the Act. Nevertheless, if you determine “the legal representative of the estate”
has the highest priority to receive the underpayment under section 204(d), the Order
can provide support for your determination of whether Deborah or AHCA or both can
qualify as the legal representative of NH’s estate and could provide evidence of whether
one or both can provide good acquittance to relieve SSA from any further liability
for payment of the underpayment.
BACKGROUND
The NH died on February 9, 2011, while domiciled in Polk County, Florida. The death
certificate indicates that the NH was widowed. It names the NH’s parents, but does
not indicate whether they are deceased. The only other relative the certificate lists
is Debra, who is identified as the NH’s sister.
On November 5, 2011, Debra, by her attorney, Eric, Esq., published a notice to creditors
in The Polk County Democrat that a petition for summary administration had been filed
in the Circuit Court for Polk County, Florida, Probate Division for the NH’s estate.
The notice indicated that the value of the NH’s estate was $9,162 and that Debra was
the person to whom the estate had been assigned. The notice to creditors also indicated
that all interested parties must file their claims or demands against the NH’s estate
with the probate court within the later of three months after the publication of the
notice to creditors or within 30 days of receiving a copy of the notice to creditors
if it was served upon the party.
Based on a petition filed by Debra, the Polk County Circuit Court, Probate Division,
issued the Order (Intestate) on April 23, 2012, finding that: the NH died on February
9, 2011; all interested persons were either properly served or waived notice; the
allegations of the petition were true; Debra advanced attorney’s fees and costs; and
the NH’s estate qualified for summary administration. The court directed the agency
to distribute the NH’s unpaid Social Security benefits totaling $9,162.00, in separate
checks to Debra (a Class 1 creditor) in the amount of $1,973.22, and to AHCA (a Class
3 creditor) in the amount of $7,188.78. The Order also indicates “[t]hose to whom
specific parts of the decedent’s estate are assigned by this Order shall be entitled
to receive and collect the same, and to maintain actions to enforce that right.” Further,
the court said, once the agency complied with the directive to pay Debra and AHCA,
the agency “so paying, delivering, or transferring shall not be accountable to anyone
else for the property.”
Eric sent the agency’s Egg Harbor field office a letter, dated June 3, 2012, which
included the NH’s Florida Certification of Death as well as the Order. Eric requested
that the agency issue a check payable to Debra for $1,973.2 and a check payable to
the AHCA for $7,188.78.
Eric also sent a letter to Debra on June 4, 2012, which enclosed a fee statement and
a copy of the notice to creditors.
You have informed us that there is an underpayment on the NH’s record in the amount
of $9,162.00, for benefits that were due to the NH prior to his death.
ANALYSIS
I. The Order is an Invalid Assignment Under Section 207 of the Act
The Order, to the extent it operates as an assignment of benefits, would be invalid
under section 207 of the Act. That section states,
The right of any person to any future payment under this subchapter shall not be transferable
or assignable, at law or in equity, and none of the moneys paid or payable or rights
existing under this subchapter shall be subject to execution, levy, attachment, garnishment,
or other legal process, or to the operation of any bankruptcy or insolvency law.
Act § 207. An “assignment” is “the transfer of the right to, or payment of, benefits
to a party other than the beneficiary (or his/her representative payee). POMS GN 02410.001B.1. Legal process is the means by which a court (or agency or official authorized
by law) compels compliance with its demand; generally, it is a court order. POMS GN 02410.001B.2. Under the statutory definition, the Order is an invalid assignment under section
207 of the Act. Further, the agency is not bound by the state court order and submitting
to Order would be a violation of section 207 of the Social Security Act (Act). Additionally,
the Order cannot alter the priority of those who can receive an underpayment under
section 204(d) of the Act. The Order’s sole value, for the agency’s purposes, is in
determining who may be the “legal representative” and who can provide “good acquittance”
under section 204(d) of the Act, as described below.
II. Agency Procedures for Distributing a Title II Underpayment
If an underpaid individual dies before receiving a Title II payment, the agency first
applies any amounts due to the deceased individual against any overpayment owed by
the deceased individual, unless recovery of such overpayment has been waived. Act
§ 204(a)(1)(A); 20 C.F.R. § 404.503(a). There is no overpayment on the NH’s record.
The agency then distributes any remaining underpayment to the living person (or persons)
in the highest order of priority as set forth in the Act § 204(d) and 20 C.F.R. §
404.503(b)(1)-(7). Priority is given first to the deceased individual’s surviving
spouse who was either living in the same household with the deceased individual at
the time of the individual’s death or is entitled to a monthly benefit on the basis
of the same earning record as was the deceased individual. Act § 204(d); 20 C.F.R.
§ 404.503(b)(1); Program Operations Manual System (POMS) GN 02301.030A. Subsequent priority in descending order is given to a qualified child or children,
qualified parent or parents, and then to the surviving spouse, child/children, or
parent(s) of the deceased who do not otherwise qualify Act § 204(d); 20 C.F.R. § 404.503(b)(2)-(6);
POMS GN 02301.030A. Where the claimant is not survived by a spouse, child/children, or parent(s), the
underpayment must be made to the legal representative of the deceased individual’s
estate, if any. Act § 204(d); 20 C.F.R. § 404.503(b)(7); POMS GN 02301.030A. A legal representative may include an individual acting on behalf of an unadministered
estate, provided that individual can give the agency “good acquittance.” A person
is considered to give the agency “good acquittance” when payment to that person will
release the agency from further liability for such payment. 20 C.F.R. § 404.503(e);
POMS GN 02301.040. In the underpayment context, this means that the individual has attested that there
is no one of higher priority who could claim an underpayment and the agency has determined
that this is true. POMS GN 02301.040. 20 C.F.R. § 404.503(d)(1); POMS GN 02301.035B.1. This includes a person who qualifies as a legal representative under a state’s
small estate statutes. 20 C.F.R. § 404.504(d)(1); POMS GN 02301.035B.1. It also includes a person with authority under applicable law to collect the assets
of the deceased individual’s estate. 20 C.F.R. § 404.503(d)(4). The person seeking
qualification under the small estate statutes must also show evidence that the statutory
requirements have been met. POMS GN 02301.035C.1.b. A person seeking qualification based on a right to collect the assets of the deceased’s
estate must show some authority, such as an affidavit or copy of a court order, to
collect the assets. POMS GN 02301.035C.1.c.
The law determining a person’s capacity to act as legal representative of a deceased
beneficiary’s estate is the law of the State in which the deceased individual was
domiciled on the date of his death. POMS GN 02301.035B.3; GN 02315.005.
The NH was domiciled in Polk County, Florida, at the time of his death. Thus, Florida
law governs. Additionally, the agency would need to determine whether a spouse, child,
or parent survived the NH. To make this determination, the agency must look to evidence
the current claimants present and any other information the agency has available.
If the agency determines no individual of higher priority exists, the agency can release
the underpayment to the legal representative of the NH’s estate.
III. Relevant State Law
The Florida Small Estate Statute provides for summary administration of a small estate.
Fla. Stat. Ann. §§ 735.201 – 735.203, 735.2055, 735.206, and 735.2063 (West 2013);
POMS GN 02315.046. Under Florida law, summary administration is available for the administration of
a decedent’s estate when it appears:
1) In a testate estate, that the decedent’s will does not direct administration as
required by the [probate code for administration of estates]; or
2) That the value of the entire estate subject to administration … does not exceed
$75,000 or that the decedent has been dead for more than 2 years.
Fla. Stat. Ann. § 735.201; POMS GN 02315.046B. Any beneficiary or person nominated as personal representative in the decedent’s
will may petition for summary administration of the estate. Fla. Stat. Ann. § 735.203(1);
POMS GN 02315.046B.1. The court may enter a summary administration order, which allows immediate distribution
of assets to persons entitled to them. Fla. Stat. Ann. § 735.201(3). A person assigned
specified parts of the decedent’s estate is entitled to “receive and collect the parts.”
Fla. Stat. Ann. § 735.201(4)(a). Those holding property of the decedent are authorized
to comply with the order by paying to those specified in the order the parts of the
decedent’s estate assigned to them by the order, and the persons so paying shall not
be accountable to anyone else for the property. Fla. Stat. Ann. § 735.206(4)(b); POMS
GN 02315.046. According to the POMS, if the agency complies with this section, it will have good
acquittance. POMS GN 02315.046.
IV. Analysis of the Evidence
In this case, the Order provides that the NH died intestate and that the NH’s estate
qualified for summary administration. Thus, summary administration is available for
the administration of the NH’s estate. The Order also entitles Debra and AHCA to receive
and collect portions of the NH’s estate, namely, shares of the underpayment. The Order
also gives the agency good acquittance, stating the agency would not be accountable
to anyone else for the underpayment if it distributes the underpayment according to
the Order. If the agency is convinced that no individual of higher priority exists,
the agency can distribute the underpayment to Debra and AHCA, as the “legal representative”
of the NH’s estate, according to the court’s order. POMS GN 02315.005.
Florida law provides that debtors of the decedent are authorized to comply with the
Order of Summary Administration by paying to those specified in the order that part
of the decedent’s estate assigned to them by the order and the persons so paying shall
not be accountable to anyone else for the property. A debtor (the agency in this case)
complying with this section will not be accountable to anyone else for the property.
POMS specifies that, under these circumstances, the debtor will have good acquittance.
POMS GN 02315.046 (citing Fla. Stat. Ann. § 735.206). Thus, to the extent SSA determines the underpayment
is due to the legal representative of the NH’s estate and concludes Debra and AHCA
qualify as the legal representative(s) of the NH’s estate, POMS seems to indicate
that the agency could distribute the underpayment as described in the Order. That
is, the agency is not bound by the state court order, as explained above. However,
the Order can provide a basis for an SSA determination that Debra and AHCA qualify
as the legal representative(s) of the NH’s estate, in the proportions specified in
the court order, and the Order can provide good acquittance for SSA’s release of the
underpayment to Debra and AHCH.
CONCLUSION
Provided Debra and AHCA can show that there is no individual of higher priority entitled
to receive the underpayment, the agency can distribute the underpayment to them, as
the legal representative of the NH’s estate, as described in the court’s order.