Advance Designation: A New Social Security Tool

by | Sep 12, 2022 | Blog, Fiduciary

The Social Security Administration now allows capable adults to identify the individuals they want to serve as their representative payee, should that need arise. A representative payee is an individual who is in charge of managing an individual’s social security benefits. Previously, a family, friend, or professional had to apply to serve as representative payee. Social Security does not recognize powers of attorney and instead the organization has its own process to evaluate an individual who wishes to serve as representative payee.

Now, however, an individual can name up to three people who they wish to be considered as their representative payee if and when the individual can no longer manage his or her own affairs. Social Security calls this “advance designation.”

At any time, anyone can name up to three individuals (not organizations) who they wish to be considered as their representative payee. The individual can change these names at any time through Social Security’s online portal. A person must be an adult of sound mental capacity to make the Advance Designation.

The information on the Social Security website indicates that Social Security could contact an advance designee if they “need to find a representative payee to assist [a person] in managing [their] benefits.” It is unclear how this process works or how or when Social Security makes a determination as to an individual’s ability to manage his or her own benefits.

Further, the advance designee still has to apply and be appointed as representative payee. It is not automatic and does not save time.

There are many things that are still very unclear about this process. For example, anyone can apply to be representative payee for an individual. How does the advance designee process change this? If someone applies to be representative payee for an incapacitated adult, but the incapacitated adult has named other individuals as their advance designee, then what happens? What if someone’s advance designee has committed wrongdoing against the individual, for example, there is evidence of exploitation and a Court has named someone else to serve as guardian to protect the individual from that person. Can that individual still serve as representative payee?

Right now there are many questions but this is an easy enough process to complete. This designation makes the most sense as part of a comprehensive estate plan with a trusted estate planning attorney. If you need a referral, please let us know and we will send you a list of our trust referral partners.

For more information on Advance Designation, visit the Social Security website