Do I have to pay back beneficiary money received because of a credit union’s mistake?

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Do I have to pay back beneficiary money received because of a credit union’s mistake?

I am beneficiary of my brother’s credit union account. He received monthly disability payments from US Treasury into this account. He died and a deposit was made after death. The credit union paid me but did not subtract the latest deposit. Now the US Treasury wants that deposit back from the credit union and the credit union wants it back from me. Do I have to pay it back? It was not my mistake.

Asked on January 25, 2012 under Bankruptcy Law, New Hampshire

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

The fact that it was not your mistake is not relevant--if you received money to which you were not entitled, you must return it. An error does not affect legal rights, so the mistake does not, for example, give you the right to the money. Consider: if the government accidentally sent your tax refund check, say, to the wrong person, you'd still be entitled to get it--the recipient would not be entitled to keep your refund. Similarly, when you receive money to which you are not entitled, you have to return it.

The way to look at it is this: since you were never entitled to the money, you are not really losing anything.

If you do not return it, you could be sued.


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