Payments to Estates of Deceased Employees

Background

Customarily, state agencies and institutions of higher education issue final payments of compensation for a deceased state employee to an estate of the deceased. However, in rare circumstances these final payments may be issued to an authorized spouse. A spouse is authorized only if:

• A sworn written statement that is notarized (an affidavit) is furnished to the paying agency.
  – and –
• The affidavit states:
  • The person who swears under oath (the affiant) is the employee’s surviving spouse.
    – and –
  • No person has qualified as an executor of the will or is an administrator of the employee’s estate.

Agencies are not required to determine if an affidavit is truthful. The transaction is made in good faith. The person who accepts payment must answer to any person having prior right to the disbursement.

As in any legal matter, payroll officers should consult with their agency’s general counsel to resolve legal questions related to disposition of final payments of compensation for deceased state employees.

Responsibility for Making the Payment

The state agency or institution of higher education that employed a state employee immediately before the employee’s death is responsible for making the lump-sum payment of vacation and sick leave to the employee’s estate or spouse.

The responsibility exists even if the employee, immediately before death, was employed by the agency in a position that did not accrue vacation leave, sick leave, or either.

The payment must be charged to the appropriation year in which the state employee’s death occurred.

Sources

Texas Estates Code Section 453.004; Administrative Rule 5.44; Texas Government Code Section 661.031–.038; IRS Publication 15 (Circular E) PDF, Employee’s Tax Guide; IRS Publication 15-A PDF, Employer’s Supplemental Tax Guide.