incapacitation Archives

Dear Liz: My question has to do with a bulletin put out by the Social Security Administration last year requiring people with Social Security income to submit the name of a person to be their advanced designation representative. It also said that you need to submit a name for your ADR annually. Many people probably don’t know about this. But can you clarify? Is it just a preliminary or mandatory requirement? If mandatory then what are the consequences if you don’t designate someone?

Answer: When someone is a minor, incapacitated or otherwise unable to manage their own Social Security benefits, the Social Security Administration names a representative payee to handle the funds.

The voluntary Advanced Designation of Representative Payee program allows you to nominate people you trust to perform this role should you become incapacitated. You can choose up to three people as possible representative payees. You can change your nominations at any time and Social Security will ask you to review your choices annually to make sure you’re still comfortable with them (because, as we know, situations and people’s capacities can change over time).

If you do opt into the advanced designation program, your nominees won’t be a shoo-in. Social Security will prioritize your choices, but will still conduct a full evaluation to ensure they can handle the job.

Dear Liz: I read your column about the parent who unexpectedly had to take over for their incapacitated son. You suggested every adult have a power of attorney and healthcare proxy. Excellent advice! However, as I discovered in dealing with my father’s illness and estate, these general documents are not always recognized by the very institutions they were designed for. His bank, mortgage company and health insurance company would only recognize their versions of these documents.

Fortunately, while he was still able to, I was able to procure each of these documents with his signatures on them but it was very stressful at a difficult time for all of us. I would suggest you amend your advice to people to check to see if their banks and so on also require their specific forms.

Answer: Financial institutions are supposed to accept properly drafted powers of attorney, but some of them insist on their own forms, agrees Burton Mitchell, an estate planning attorney in Los Angeles.

“Sometimes one can get around these rules by appealing to higher ups in the organization, but it is unnecessarily difficult, time-consuming and complicated,” Mitchell says.

Checking with your financial institutions now could avoid hassles later.