My sister died last year. I am the executor and she added me to her checking account so I could handle her finances. Haven't done her final 2019 taxes yet. IRS deposited $1,200 into checking account for her stimulus amount not knowing she has died. What do I do with this? How do I give it back?
Here is the latest.
https://www.wsj.com/articles/stimulus-checks-sent-to-dead-relatives-should-be-returned-mnuchin-says-11588103323
Rules are in 31 CFR 240.15, “checks issued to deceased payees”.
Google 31 CFR 240.15, there will be one or 2 with easy to follow explanations on how this works and doesn’t work. It’s federal.
The Stimulus check is NOT a re-occurring benefit payment, so it’s legal to deposit it. It’s a 1 off type of payment. Just hold off on that final distribution so you can include the Stimulus $ in the $ to the heir. The deceased was entitled to it as based on what she filed for 2018 taxes. Now if it had been a re-occurring benefit payment, like monthly SS $ or monthly pension, then those can be recaptured or clawed back.
It’s exactly like Worried in Cali described it. The CARES Act allows if someone is sent more $ that they are supposed to receive, they are allowed to keep it. It’s done to ease any “administrative burden”.
Stuff like this ($ to deceased) happens way, way more often than folks realize. If you filed property damages for Deepwater Horizon (BP oil spill 2010), the was a smallish check winter 2019 from one of the Junior oil companies settlement. You know folks died from 2010-2019. But if you left probate open, you had someplace to deposit the $ into. Nice!
There has been no decision on whether they will go after money sent in error.
I would be very careful spending money that is not yours and that was sent in error.
The moral and ethical thing to do is to send it back.
Unfortunately in times of confusion people get greedy, like the parents collecting free lunches and then selling them. It is better to the right thing than the easy thing. Karma is real. I am not accusing you of any wrong doing.