With their affairs in place, should that “something happen,” your clients are set. However, if your client is receiving Social Security benefits, you need to know that Social Security does not recognize powers of attorney! Under Social Security rules, only a properly appointed representative payee can manage benefits if the beneficiary cannot. But the Strengthening Protections for Social Security Beneficiaries Act of 2018 allows Social Security recipients to make an Advance Designation.
A representative payee is a person or organization authorized to act on behalf of a Social Security beneficiary, for example, your client. Typically, this is a relative or friend that your client would trust to manage Social Security benefits on his/her behalf. It also could be an organization that provides payee services for a fee.
Social Security does not recognize powers of attorney. It only recognizes a representative payee. If a representative payee has not been named, then Social Security must locate an appropriate person to act as payee. While this may be the same person the client would choose, it also might not. If there are several children or other close relatives, the risk it will not be a “first choice” increases.
The person or organization would still need to be evaluated and approved by Social Security. But using an advance designation can simplify the process.
A representative payee manages the benefit payments, and uses them to provide for the Social Security beneficiary’s current needs, as well as his/her best interest. Similar to a person acting under a DPOA, the representative payee also must keep appropriate records. If requested the records must be available for review.
After the Strengthening Protections for Social Security Beneficiaries Act, Social Security offers beneficiaries the ability to use Advance Designation to name up to three potential representative payees. This may be done at the time of claiming benefits, or any time after. It can be done online, via phone 1 (800) 772-1213, by mail using form SSA-4547, or in person.
Naming a representative payee can help a client ensure he or she will be assisted by a person he/she chooses, and trust. Knowing about this additional step may make challenging circumstances easier to manage.
For additional infromation about Social Security strategies, please contact the Retirement Strategies Group at (800) 722-2333, or email us at RSG@PacificLife.com.
Pacific Life, its distributors, and respective representatives do not provide tax, accounting, or legal advice. Any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor or attorney.
Pacific Life is a product provider. It is not a fiduciary and therefore does not give advice or make recommendations regarding insurance or investment products.
Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues.
Variable insurance products are distributed by Pacific Select Distributors, LLC (member FINRA & SIPC), a subsidiary of Pacific Life Insurance Company (Newport Beach, CA) and an affiliate of Pacific Life & Annuity Company. Variable and fixed annuity products are available through licensed third parties.
No bank guarantee • Not a deposit • Not FDIC/NCUA insured • May lose value • Not insured by any federal government agency
For financial professional use only. Not for use with the public.