E281 MTA Covid Death Benefit and Beneficiaries

Does the MTA covid death benefit have beneficiaries, and if not, who should inherit? The MTA is paying a pretty generous amount (about $500,000) to the estate of any employee who passed away with or from covid. The requirements seem to be tightening up a bit, but we’ll see what comes of it.

Have your MTA Covid death benefits been paid to the wrong person?

We’ve had a few of these cases. Although well-intentioned and hardworking, the folks at MTA don’t seem to be experienced with estate issues. They are probably also overwhelmed because Covid benefits are a new thing. Because the benefit is significant, MTA is probably getting a different energy from these heirs as opposed to heirs just looking to claim the decedent’s last paycheck.

For example, Mr. S. was confused because MTA told him they would pay benefit to him. Since he was named as beneficiary on son’s pension, Mr. S. was told that the Covid benefit would go to him, too… even though Mr. S.’s son had a surviving wife and kids.

It seems that the son never updated his beneficiary designations when he got married and had kids. We see this happen often, and it is a main reason why we don’t recommend using beneficiary designations.

In another example, the MTA paid the full amount to Mrs. B., but her husband died with no will and with kids from a prior marriage.  When you die with no will, your estate is supposed to go roughly half to your surviving spouse and half to your kids. Should his children from a prior marriage have received part of the benefit? It was actually the kids who called us to ask this, because dad’s second wife (Mrs. B.) got all the MTA Covid death benefit money.

Does the MTA Covid death benefit have named beneficiaries?

While possible, it is highly unlikely. This emergency benefit only came into existence less than 2 years ago. It’s an automatic benefit, not something employees signed up for, like a pension or life insurance.

If naming a beneficiary is not the case, it’s highly unlikely that Mr. S. being named on the pension carries over to the Covid death benefit in the example above. I can’t think of any other scenario where beneficiary designation from one policy gets automatically transfers to another. That’s like saying, “I named my wife as beneficiary on my life insurance, so she should get my IRA, too.” We ended up confirming that there was miscommunication with the MTA in Mr. S.’s case.

Who is supposed to inherit the MTA Covid Death Benefit?

In the absence of beneficiary designations, death benefits get paid according to the will, or if no will, then according to default inheritance law (intestacy). This has been consistent in our dealing with the MTA. They are requiring proof of a court-appointed executor or administrator before they pay anything to anyone. In our experience, the MTA has been handling this properly, yet sometimes heirs have a misunderstanding.

So in Mrs. B.’s case: If a spouse has received funds and no funds were paid to the kids, either:

1. There was a will that the kids didn’t know about and they were disinherited under that will; or
2. Maybe the spouse received funds not as the wife, but as the executor/administrator. If this is the case, the funds may pay out to the kids when estate is closed; or
3. MTA paid the benefit directly to Mrs. B., even though she is not the executor/administrator; or
4. B. received the check in her capacity as executor/administrator, and she is not fulfilling her duty as fiduciary.

So, with $500,000 per claim, has the money run out? The program still exists, but the MTA is tightening qualifications for the benefit. When we first worked on these claims, “Covid” just had to be on the death certificate. Now the MTA wants medical records, and Covid needs to be the primary cause of death. They now have departments and committees dedicated to determining whether this benefit will be paid out.

If you have questions about your family’s eligibility or rights, please contact us. We’ve worked on several MTA Covid death benefit claims and have developed relationships with the MTA. We can get this done for you!

If you want to learn more about how probate works in general, don’t forget to check out my book, “How Probate Works,” available on Amazon.

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