The decedent was the incompetent widow of an Indian Wars veteran, and as such, pensions were paid to her committee by the Veterans’ Administration until her death on August 6, 1947, in a State institution. Her estate consisted of a balance of unexpended pension moneys and the proceeds of a life insurance policy upon her life.
The United States of America claims the net estate by escheat under section 450 of title 38 of the United States Code, as diligent search has thus far failed to disclose the existence
Subdivision 3 of section 450 of title 38 of the United States Code provides that the reversionary right retained by the United States to the funds in the hands of an incompetent beneficiary’s representative extends to any funds paid by it, “ less legal expenses of any administration necessary to determine that an escheat is in order.” The reasonable funeral expenses of a beneficiary from such fund is not prohibited, in the absence of other available funds capable of being used for such purposes (cf. Matter of Montgomery,
Pensions, which do not include any direct contribution thereto by the beneficiaries, are bounties of the Government (Matter of Campbell, supra). It is equitable that such remaining pension moneys should be returned to their donor as the primary purpose of their grant ended with the death of the beneficiary.
The intent that the State should not profit with respect to funds administered by the Veterans’ Administration is further evidenced by the provisions of sections 451 and 686c of the same title. Those sections provide that should escheat of a veteran’s estate ensue, then unpaid installments for compensation, yearly renewable term insurance or accrued maintenance and support allowances and adjusted compensation shall be retained by and escheat to the United States. Such congressional intent can be given effect by the application of the principles underlying the doctrine of marshaling of assets (Farmers Loan & Trust Co. v. Kip,
Proceed accordingly.