An RDFI is liable for ALL benefit payments received after the death or legal incapacity of a recipient or death of a beneficiary unless the RDFI meets the qualifications for limiting its liability (see B. Limiting Liability).

An RDFI has no right to limit its liability with respect to post-death benefit payments received after it knows of the death or incapacity of a recipient or the death of a beneficiary and has had a reasonable opportunity (i.e., one business day) to act on that knowledge.

The RDFI must immediately notify the paying agency(s) if the RDFI learns of the death from a source other than notice from that agency. An RDFI must immediately return any post-death benefit payment received after learning of the death, regardless of how the death was discovered. An ACH return using reason code R15 or R14 constitutes proper notification to the federal agency.

Note: If no post-death payment has been received at the time the RDFI learns of the death, the RDFI may also contact the paying agency (see Contacts).

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