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Pension Paid After Death: Do I Return This?

My mom passed away and the bank was notified two days after her death. About eight months later, I was told that she still had an account open with them. I went and withdrew the money. As it turned out, it was a veteran's pension that was direct deposited and all monies that were withdrawn were made after death. Am I responsible for paying them back or does the bank have some responsibility in it?

The Treasury Department will eventually initiate a recovery effort, once the VA wakes up and realizes it has paid the benefit for several months after a death. The bank will inform the Treasury that the funds were paid out to you, and you can guess what happens next.

The bank should have returned the first VA payment it received after learning of your mother's death. That would have put a stop to the payments. However, the Treasury will look to you for reimbursement. Its rules may make the bank liable for some of the payments, but the bank will then look to you to make itself whole. You can contact the VA yourself to work out a solution.

Published on 10/29/09