BY SUZANNE HAZLETT, MBA, CIMA®, CFP®
Establishing powers of attorney, medical directives, or guardianship arrangements may not be enough when handling Social Security payments for a disabled senior. The Social Security Administration (SSA) requires a special designation known as representative payee.
A representative payee acts on behalf of a person incapable of representing themselves and is responsible for directing payouts exclusively to meet a beneficiary’s needs. The SSA may determine that an individual cannot manage or direct someone else to manage their benefits and would then appoint a representative payee. Family members may also consult the SSA if they believe their family member would benefit from a representative payee. If friends or family cannot serve as payees, the SSA will look for qualified organizations to be representative payees.
One in three seniors will die with dementia.1 It’s a daunting statistic, and when you consider it alongside increasing longevity, it’s easy to see why planning for the potential impact of diminished capacity on your or a loved one’s future finances is critical.
An estimated 6.5 million Americans ages 65 and older are living with Alzheimer’s, and more than 11 million Americans are providing unpaid care for someone struggling with dementia.1
The SSA requires that all legally incompetent adults and most minor children (a disabled child or young adult entitled to Supplemental Security Income, for example) have a representative payee. In most cases, the person in this role cannot be paid for their work on behalf of the incapacitated person. The SSA also requires them to keep careful records.
If you assume the role of representative payee, the SSA offers a range of resources via ssa.gov, including a series of training videos, a downloadable guide, and a frequently-asked-questions page. The process will likely require a trip to a Social Security office and an explanation as to why the beneficiary needs assistance and why they have selected you for the job. This designation will be in addition to any other legal or medical role you might be playing for your loved one.
1 Alzheimer’s Association, “2022 Alzheimer’s Disease Facts and Figures”
Suzanne Hazlett, MBA, CIMA®, CFP®, is a Certified Investment Management Analyst® and CERTIFIED FINANCIAL PLANNERTM professional. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Securities are offered through Raymond James Financial Services, Inc., member FINRA/SIPC. HAZLETT WEALTH MANAGEMENT, LLC is independent of Raymond James and is not a registered broker/dealer. 675 Sun Valley Road, Suite J1 + J2, Ketchum, Idaho, 83340 208.726.0605 HazlettWealthManagement.com
