A worker, Mr. Silverman, died in a nursing home after suffering from a debilitating disease. His widow applied for the social security lump sum death benefit, which was equal to three times the worker’s primary insurance amount (PIA), or $255, whichever was greater. In Mr. Silverman’s case, the lump sum death benefit was $201, which was three times his PIA.

The purpose of the lump sum death benefit is to help assist with the final expenses of the decedent, such as funeral and burial costs. It is a fairly meager amount that does not keep pace with inflation.

Unlike widow’s insurance benefits, Mrs. Silverman needed to show that she was living in the same household with her deceased husband at the time of his death in order to qualify for the lump sum death benefit. But one might as well not leave money on the table if it is available.

Unfortunately for Mrs. Silverman, the fact finder held that Mr. Silverman’s living apart from her was not just because he was convalescing from an illness, but because the marital relationship was inharmonious. Because the couple was permanently separated, and not just temporarily apart because of Mr. Silverman’s illness, they were not “living in the same household” for social security purposes. (I do not know how the fact finder determined that the marital relationship was “inharmonious”, which seems to be a subjective description. But perhaps it was based on objective facts.)

But another section of the social security code provided that, even if the surviving spouse was not living in the same household with the deceased at the time of his death, she may still claim reimbursement for burial expenses that she actually paid.

Social Security determined that Mrs. Silverman was entitled to reimbursement in the amount of $75.00 for burial expenses paid by the estate, of which she was the administratrix. The remainder of the $201 lump sum benefit was payable to her stepson, who had paid a portion of his father’s funeral expenses.

But Mrs. Silverman claimed that she was equitably entitled to reimbursement for all of the funeral expenses paid by the decedent’s estate.

The problem was that she had brought this claim in her personal capacity, and not in her role as administratrix of her husband’s estate.

In addition, even if she had brought the claim in her fiduciary capacity, a portion of her husband’s final expenses had been paid from his bank account, which was held in a Totten Trust, of which his son was the beneficiary.

A Totten Trust is a Trust in which the settlor (or creator) of a bank account places money in the account with instructions that, upon his or her death, whatever amount remains in the account will be paid to a named beneficiary.

Because Mr. Silverman’s son was the beneficiary of the Totten Trust, the money remaining in his bank account at the time of his death was not part of his probate estate, but rather, was paid directly to his son. After Mr. Silverman’s son paid for part of his burial expenses, he became entitled to a portion of the lump sum death benefit as reimbursement.

The net effect of social security’s decision was that the lump sum death benefit, in the amount of $201, was split between Mrs. Silverman and her stepson.

See Social Security Ruling (SSR) 66-16c.

This material should not be construed as legal advice for any particular fact situation but is intended for general informational purposes only. For advice specific to any individual situation, an experienced attorney should be contacted.