Reclaiming Deceased Customer's Social Sec. Funds

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Question:

Is it proper for a bank to reclaim a customer's social security funds that were direct deposited on June 3 if the person died on June 2?

Answer:

Social Security payments are for the prior months benefit. Therefore the deposit on June 3 would be for May's benefits. Since the customer did not pass away during the month of May, this deposit would not be subject to reclaimation.

If your customer had passed away on May 31st, then the deposit would have been subject to reclaimation.

First published on BankersOnline.com 10/3/11