When an RDFI receives actual or constructive knowledge of the death, it may decide to await a Notice of Reclamation before returning the already credited post-death payment(s). However, the RDFI must immediately return all subsequent (i.e., subsequent to receiving notice of death) post-death benefit payments to the Government Disbursing Office. The RDFI also must notify the sending agency of the recipient's death, which it may do by using "death" as the return reason code on the returned payment.

When returning payments, the RDFI must be careful to use the correct return reason code:

R15 Beneficiary Deceased

The beneficiary is the person entitled to the benefits. In this case, there is no representative payee or guardian involved, or they are still alive.

R14 Representative Payee (or Guardian) Deceased or Incapacitated

The representative payee (or guardian) is the person who receives benefit payments on behalf of the (under aged or incapacitated) beneficiary. E.g., payment is payable to "John Doe, for [another person]". In any event, the beneficiary is not deceased.

Note: See Returns for more information on DNEs. Care should be taken when "flagging" accounts in response to DNEs, specifically when the account is a joint account.

Any information of the death received by the RDFI or any of its employees, from whatever source, establishes the full legal liability for ALL SUBSEQUENT post-death federal benefit payments from all agencies, as well as any post-death benefits in the account, which the RDFI then allows to be withdrawn.

This includes post-death funds withdrawn by executors or other representatives of the deceased person's estate. Any release to an executor or other party clearly acting on behalf of the deceased person or his/her estate will be deemed by the government to have demonstrated the RDFI's knowledge of the death.

If the RDFI fails to return one or more payments it receives after it has actual or constructive knowledge of death, the RDFI will not be able to limit its liability as to those payments. If the RDFI returns any post-death benefit payments to the government before it receives a Notice of Reclamation, we suggest, but do not require, that the RDFI notify the account owners as a courtesy.

If the RDFI fails to return all payments it received after it had actual or constructive knowledge of the death, it will not qualify to limit its liability (i.e., the RDFI will be fully liable for all post-death payments). If the RDFI returns any post-death benefit payments to the government before it receives a Notice of Reclamation, we suggest, but do not require, that the RDFI notify the account owners as a courtesy.

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.

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