Treasury Greenbook

[infantry10]

Wow!! Thats ridiculous! It should never take that long and it's a shame you had to wait for what was owed to you. Smh!

My wife's grand father passed away in Nov 2009. His wife has been receiving VA payment ever since in Full payment of what he was getting before he passed. She has contacted them several times telling them of their mistake but they've never fixed it. She's been in contact with the local VFW also and he keeps telling her to "just spend it". Her husband was a smart Marine and taught her well how the VA works. She puts the overpayment in a separate savings account every month cause she knows eventually VA is going to want it back. The VFW tells her that she should just spend it and if and when the VA wants it back, they'll take care of it. I'm glad she is smart enough to know to never listen to VSOs over common sense.

[free_spirit_etc]

I agree this thread is moving all different directions. It has moved in the direction the discussion took it.

I am not sure that the bank was wrong. The bank has an agreement with the Federal Government. And I had agreement with the bank. What the bank told me was that my agreement with them allowed them to access ANY funds I had at the bank for money owed. From what I am finding, in cases where the veteran died if the bank receives money AFTER they (the bank) have knowledge of the death, then THEY (the bank) is liable for the funds. The bank is actually supposed to return the funds, without the VA even having to start a reclamation process. If they don't return the funds, the bank is liable. I see the instructions state " Note: 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the time the RDFI first receives information of death, all or part of the post-death benefit payments have already been withdrawn from the account, the government does not authorize the RDFI to try to recover the funds from the withdrawer.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." -- So the VA is not authorizing the bank to collect the funds from the person who withdrew them or spent them (i.e. the Federal Government isn't liable) - but they might be able to do so under state law or their contract with the depositor.

This could be very interesting as far as the case we have been discussing - because from what I am reading, the BANK is actually liable for accepting the payments after they have knowledge of the veteran's death. So depending on the widow's state law, or her contract with the bank, she could possibly withdraw the funds and the bank would have to repay them.

So I would suggest she talk to an attorney. As far as her withdrawing the money and having NO funds left at the bank - it is possible that the bank would not be able to collect it from her (depending on the state law), though the bank may very well try to put a negative mark on her ChexSystem report. But most banks include in their agreements with depositors that if you owe the bank any funds they can take them from ANY account you have on deposit.

So though it may seem like if you move funds out of THAT account the funds will be safe - as long as you have ANY funds on deposit with the bank the funds went into, they can take them from any account (depending on the depositor agreement and state law).

http://www.bankersonline.com/operations/guru2008/gurus_op042808e.html

http://fms.treas.gov/greenbook/index.html

http://fms.treas.gov/greenbook/pdf/Green-Book-Chapter-5-May-2013.pdf

Edited October 24, 2013 by free_spirit_etc

[infantry10]

The state is WV. I really appreciate you taking the time to look up this information and respond with it, free_spirit. You are very knowledgeable and I thank you so much.

[free_spirit_etc]

There is a lot of interesting information in the Greenbook

http://fms.treas.gov/greenbook/pdf/Green-Book-Chapter-5-May-2013.pdf

"Section 2: Liability of a Receiving Depository Financial Institution

(RDFI)

A. Full Liability

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 below). If the RDFI fails to meet the qualifications for limiting its liability, the RDFI will be heldliable for all post-death payments received after the death or legal incapacity of a recipient or death of a beneficiary. The RDFI will be debited for the full amount of the reclamation;this debit action will be final."

"B. Limiting Liability

An RDFI may qualify to limit its liability if it:

• certifies it did not have actual or constructive knowledge* of the recipient’s death or

incapacity at the time of the deposit of any post-death benefit payments;

• returns all post-death benefit payments it receives after it learns of the death; and

• responds to the Notice of Reclamation (FMS-133), completely and adequately, so that

it is received by the Government Disbursing Office within 60 days from the date of the notice."

"C. Calculating the Limited Liability Amount

If an RDFI qualifies for limited liability, the RDFI will only be debited for the 45-day

amount. The 45-day amount is the dollar amount of the post-death benefit payments received within 45 calendar days following the death."

"What to do upon Notification of Death with Payments Already Posted and Subsequent Payments

When an RDFI receives actual or constructive knowledge of the death, it does not have to wait for a Notice of Reclamation. The RDFI can immediately return all subsequent post death benefit payments to the Government Disbursing Office. The RDFI must also notify the sending agency of the recipient’s death. An ACH return using return reason code R15 or R14 constitutes proper notification to the Federal agency."

[free_spirit_etc]

Rule Book regarding Direct Deposits from the VA, Social Security, and other Federal Agencies.

http://fms.treas.gov/greenbook/index.html

Guide to Federal ACH Payments

"FMS periodically reviews the Green Book and plans for future updates. In particular, FMS plans to add a new Garnishment chapter and update Chapter 5 on Reclamations pending decisions regarding an automated ACH reclamations process. To make the Green Book easier to navigate and to facilitate downloading and printing, chapters are available in PDF format only."

[infantry10]

I am going to call her tomorrow morning and pass all this information on to her. I know she will be very grateful! I also apologize if I caused this forum to switch topics. It wasnt my intention. I guess I got caught up in someone actually asking me questions about what happened in my situation. Its a rather odd one and I haven't had many people ask questions or give any answers. Thanks again for everything!! It's much appreciated!

[free_spirit_etc]

I started a new thread concerning VA (and other Federal Agency) Direct Deposits. So this thread can get back on track.

But I always get nervous when people say that the VA cannot take money from other accounts a survivor has in the bank. I don't have an overwhelming need to "be right" on this issue. And I realize that just because my funds were taken doesn't mean that will happen in every case. But I do think survivors should be educated that there IS a possibility that can happen and plan accordingly. I do know it can happen. And I do know it takes a LONG time to get the issue resolved. Personally, I think it is wiser planning for a survivor to count on it occurring than not count on it occurring.

In my case, it wasn't life threatening because I had other income and the amount was not substantial. But the widow is entitled to the month of death payment from the VA, which is actually paid the month AFTER the veteran's death. But the VA is not always good about releasing that payment. They might not reclaim the funds. They might reclaim the funds and pay her the month of death payment fairly quickly. But they might do, as they did in my case, freeze the funds in another account where she can't spend them, but refuse to send her the payment as they have not reclaimed the funds -- and then take a LONG time to pay once the funds have been reclaimed. Regardless of WHO froze my funds, they were frozen.

We have lots of Vets in here with spouses. I think it is wise to be adequately informed of the potential problems and plan accordingly.

Whomever wants to believe that the VA can only touch funds in that one account -- that is fine. But whomever wants to consider the possibility that the VA, the bank, or someone can mess with any funds on deposit at the same bank should be forewarned.