Excerpt from Disability Tips: (click for entire article)
I was recently asked if you can keep (or do you have to return) a Social Security check for the month someone dies. Here is the answer straight from Social Security:
If A Beneficiary Dies
Let us know if a person receiving Social Security benefits dies. Benefits are not payable for the month of death. That means if the person died any time in July, for example, the check received in August (which is payment for July) must be returned. If direct deposit is used, also notify the financial institution of the death as soon as possible so it can return any payments received after death.


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