I have to ask this question, and please don't take it as a challenge of your diligence: Have you attempted to contact the member by mail or telephone?
The notice from the law firm is at minimum a red flag that you must investigate to determine whether the member has passed away. For this, you can certainly start with family, but tread gently, and don't stop there if a family member says the member is still with us. If death records are filed with local city or county government offices, check there. If need be, ask the law firm the source of its information.
If you can confirm that the member has died and can provide a date of death, I'd flag the account and be certain you return any future SS or VA benefit payment for which the member is named as beneficiary. Make a careful record of when you first learned of the death and confirmed it, so that you can argue your case in any reclamation attempt.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8