Q: We just received a Notice of Reclamation from
the federal government to collect post-death benefit payments paid to a
deceased member. What is our liability
if the money is no longer in the account?
A: According to
Treasury’s regulations, a receiving depository financial institution (RDFI) is
liable for ALL benefit payments received after the death of a recipient, unless
the RDFI meets the following qualifications:
- Certifies that it did not have actual or
constructive knowledge of the recipient’s death or incapacity at the time of
the deposit of any post-death benefit payments;
- Returns all post-death benefit payments it
receives after it learns of the death; and
- Responds to the Notice of Reclamation
completely and adequately, so that it is received by the Government Disbursing
Office within 60 days from the date of the notice.
Upon receiving the Notice of Reclamation, you should immediately
determine the account balance. If there are
insufficient funds, a partial payment should be remitted to the Government
Disbursing Office that issued the reclamation.
When returning less than the full amount, you should remit a check and
attach the front and back copy of the Notice indicating on the reverse the
total amount of the partial payment.
Treasury notes that “if at the time the RDFI first
receives information of death, all or part of the post-death benefit payments have
already been withdrawn from the account, the government does not authorize the
RDFI to try to recover the funds from the withdrawer. If the RDFI does so, it acts under its own
authority in terms of its contract with its depositor or under state law.”
For more information
see Treasury’s Guide
to Federal Government ACH Payments