Social Security now allows for the advance designation of representative payees for beneficiaries. The advance designation is available for current beneficiaries of Social Security, Supplemental Security Income (SSI), or Special Veterans benefits. An advance designation can also be made when applying to begin receiving the above benefits.

The advance designation allows for the naming of up to three individuals who may serve as a representative payee if a beneficiary is unable to manage their own benefits in the future. The designation can be changed at any time. Individuals who have made an advance designation will receive a yearly notice listing their advance designees for review. Advance designees are only contacted by Social Security if the appointment of a representative payee becomes necessary.

Once a beneficiary is unable to handle their own benefits, Social Security appoints a representative payee to manage an individual’s benefits. Representative payees are legally obliged to use the benefits to meet an individual’s essential needs such as food, household, and medical expenses. If there is any money remaining, representative payees have additional requirements on how to save the money for future use. Representative payees must also keep records detailing their handling of an individual’s benefits.

While the duties of representative payee may sound similar to those of an agent acting with a financial power of attorney, these are two entirely separate appointments. Having a valid power of attorney in place does not automatically mean that the named agent will become a person’s representative payee if the need arises.

Individuals should meet with a local, experienced elder law attorney to make sure that all appropriate arrangements are in place in case of incapacity. An elder law attorney can also fit advance designations into a broader estate plan tailored to an individual’s particular needs.

For any questions you may have about representative payees and your Social Security, SSI, or Special Veterans benefits, please call Martha C. Brown & Associates at (314) 962-0186.