Properly Handling Social Security When a Loved One Dies

Losing a loved one is one of the most difficult experiences in life, and the administrative tasks that follow can feel overwhelming. Among the many things that must be handled is the deceased person’s Social Security benefits. There are specific rules and procedures that must be followed, and mistakes can result in having to return money to the Social Security Administration. Here is what you need to know.

Step 1: Report the Death to the Social Security Administration

The death of a Social Security beneficiary must be reported to the Social Security Administration (SSA) as soon as possible. In many cases, the funeral home will report the death on your behalf if you provide the deceased person’s Social Security number. However, you should not assume this has been done. It is wise to contact the SSA yourself to confirm.

You must report the death by calling the SSA at 1-800-772-1213. You cannot report a death online. When you call, you will need to provide the deceased person’s name, Social Security number, and date of birth, as well as the date of death.

Step 2: Review Payments Carefully

Social Security benefits are paid in the month following the month they are earned. For example, the benefit for the month of June is paid in July. However, a beneficiary must be alive for the entire month to be entitled to that month’s benefit. There are no partial-month payments.

This means that if a person passes away on any day during a given month, they are not entitled to the benefit for that month. If a payment has already been deposited for a month in which the person passed away, that payment must be returned to the SSA.

For example, if your loved one passed away on July 15, they would not be entitled to the July benefit, even though they were alive for half the month. If the July benefit was deposited in August, that payment must be returned.

Step 3: Return Any Overpayment

If a Social Security payment is deposited after the beneficiary has passed away, the money must be returned to the SSA. If the payment was made by check, do not cash it. Return the check to the SSA as soon as possible.

If the payment was made by direct deposit, the SSA will typically contact the bank to reclaim the funds. However, if the funds have already been withdrawn from the account, the person who withdrew them will be responsible for repaying the SSA.

For this reason, it is important to keep the deceased person’s bank account open until any pending Social Security issues have been resolved. Closing the account prematurely can complicate the process of returning overpayments.

Step 4: The One-Time Death Benefit

The Social Security Administration provides a one-time lump-sum death benefit of $255. This payment can be made to:

• The surviving spouse, if they were living with the deceased at the time of death
• The surviving spouse, if they were living apart but receiving certain Social Security benefits on the deceased’s record
• A child who is eligible for benefits on the deceased’s record in the month of death

The death benefit is not automatically paid. You must apply for it, and you generally must apply within two years of the date of death. While $255 is a modest sum, it is available to help with immediate expenses.

Who Is Eligible for Survivor Benefits?

Beyond the one-time death benefit, certain family members may be eligible for ongoing monthly survivor benefits based on the deceased person’s Social Security earnings record. Eligible family members include:

1. A surviving spouse age 60 or older (or age 50 or older if disabled)
2. A surviving spouse of any age who is caring for the deceased’s child under age 16 or who is disabled
3. An unmarried child under age 18 (or up to age 19 if a full-time student in elementary or secondary school)
4. An unmarried child of any age who was disabled before age 22 and remains disabled
5. A stepchild, grandchild, or step-grandchild under certain circumstances
6. Dependent parents age 62 or older
7. A surviving divorced spouse who was married to the deceased for at least 10 years
8. A surviving divorced spouse of any age who is caring for the deceased’s child under age 16 or who is disabled
9. An ex-spouse age 60 or older (or age 50 or older if disabled), if the marriage lasted at least 10 years

The amount of the survivor benefit depends on the deceased person’s earnings history and the age at which the survivor begins receiving benefits.

Surviving Spouse Benefit Strategies

If you are a surviving spouse, you have some important decisions to make about Social Security. Understanding your options can make a significant financial difference.

A surviving spouse can begin receiving survivor benefits as early as age 60 (or age 50 if disabled), but the benefit will be reduced if claimed before the survivor’s full retirement age. At full retirement age, the survivor receives 100 percent of the deceased spouse’s benefit.

One strategy that can be particularly valuable is the ability to switch between benefits. If you are entitled to both your own Social Security retirement benefit and a survivor benefit, you may be able to claim one benefit first and switch to the other later. For example, you might claim the reduced survivor benefit at age 60 while allowing your own retirement benefit to grow until age 70. Alternatively, if your own benefit at 62 is smaller than the survivor benefit, you might claim your own benefit first and then switch to the full survivor benefit at your full retirement age.

The rules surrounding survivor benefits are complex, and the best strategy depends on your individual circumstances, including your age, earnings history, health, and financial needs. Making the wrong choice can cost you tens of thousands of dollars over your lifetime.

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Navigating Social Security after the death of a loved one can be confusing and stressful. Taking the right steps promptly can help you avoid problems and ensure that you and your family receive all the benefits to which you are entitled.

If you need guidance on Social Security survivor benefits or other matters following the loss of a loved one, contact our office today.