There are many reasons to begin the estate planning process; however, no matter the reason, it is essential to ensure that it is complete. To each individual this might mean something else, but in general terms, this means considering what documents to include and what should be contained in each of them. It also means keeping on top of a current estate plan, assessing it and verifying that it is up-to-date.
While there is a wide range of items and benefits to address when developing an estate plan, one such benefit that tends to fall through the cracks during this process is Social Security benefits. Including a financial power of attorney in an estate plan means that a named individual will manage your finances if you are no longer able to do so. Part of this authorized financial power is managing Social Security benefits.
Whether an individual is already receiving these benefits or will apply for them in the future, what many do not realize is that the Social Security Administration does not recognize power of attorneys. Does this mean that the designated person in a power of attorney cannot manage Social Security benefits? No, but it does mean taking an additional step to protect these benefits.
When drafting an estate plan, an individual will need to contact the SSA in order to make an advanced designation of a representative payee. This means that a person is able to choose one or more individuals to manage his or her benefits if deemed unable to in the future. It is important to note that a person already receiving these benefits could name an advance designee at any time. For those claiming benefits, he or she could name a designee during the claiming process.
Once a designee is approved by the SSA, he or she will be able to act on a person’s behalf it is determined that he or she cannot make financial decisions for him or herself. If one fails to name a designee, the SSA will appoint a representative payee if it is determined that an individual needs assistance managing his or her money.
An estate plan has many working parts, which is why it is important to ensure that nothing is overlooked. Because it can be an emotional and complicated process, getting legal assistance during the drafting and updating phases.