You know how nice it is when you get a toy you have been wanting? If you don’t remember that far back, think about how a child’s eyes light up when it sees a toy under the Christmas tree. Or if you like, a grown man’s reaction on his birthday when he unwraps that belt sander he has been asking for.
Now imagine that you are given a toy you really want, but then told that you cannot play with it, you have to put it up on the shelf and just look at it. And you will know how I feel right now.
(“Enough already, Kirk, we know this column doesn’t have anything to do with toys. Get to your point”.)
If you have a power of attorney in place, or if a judge appoints a conservator for you, you might imagine that the person named can handle any financial matters you need them to handle. And you would be mostly right, but not entirely.
Because there is one agency which does not care if you have a power of attorney, a conservator, guardian, or anything else. Those appointments fall under state law, but the Social Security Administration is a federal agency, and they are too highfalutin’ to pay any attention to state law.
Instead, Social Security has something called a “representative payee” (but everyone shortens it to rep payee in order to conserve America’s dwindling supply of syllables). A rep payee is like a conservator, but only for the Social Security benefits. The appointed person (or organization) receives the payment each month, and then is responsible for paying it out to, or for, the beneficiary. Who appoints the rep payee? Social Security does that, through their own administrative processes.
A few years ago, some folks in Congress pointed out a deficiency in this process. Social Security had a list of preferences for who gets appointed as rep payee. But what was missing, in many cases, was what the person who earned the benefits wanted. If that person was still somewhat competent, they could tell Social Security who they wanted to be their rep payee. But if they were not, and if the conditions which caused them to need someone appointed in the first place also made it impossible for them to make a meaningful selection, then potentially Social Security could end up appointing someone who the beneficiary would not want.
So they came up with what should have been my new toy. They allowed for an advance designation of who you want to be your rep payee. You can name up to three people in succession, in advance while you are still competent. And then later, if you are not competent, Social Security will know who you wanted to have handling your payments.
Except that they put some maddening restrictions on it. You can’t just get a form from your attorney and fill it out; you have to do this online with SSA. And you can’t fill it out until you actually apply for benefits. While a lot of my clients are already receiving Social Security benefits, most of them are not, they are still working and have not applied yet. Those people cannot designate a rep payee in advance. I can’t even do that for myself, since I’m still working and not receiving Social Security benefits.
So that is where my frustration comes from. I like being able to give the client a form which will easily solve a particular problem. In this case, I can’t give them the form. I can direct them to the website to set up their MySocialSecurity account, but that is hard for many of them. And for most of my clients, they can’t even do that, they just have to wait until they retire and apply for their benefits, and hopefully they remember to do it then.
Unfortunately, this is happening at a time when this is even more of an issue than it was before. You used to have at least three different options for appointment of a rep payee. If you had a friend or family member who was capable and willing, they could be appointed. If not, there were quite a few small companies which, for a fairly modest fee, would handle the rep payee duties. If you did not want to do that or could not afford it, you were left with the Office of Public Advocacy.
But just recently, somebody noticed that the law does not actually permit paying a private company to do this, so all of the people who were handling rep payee duties for a fee, immediately went out of business. And now everyone who doesn’t have a friend or family member who can serve in that capacity, has to go through OPA. As you might expect, with all those extra cases, OPA is severely overloaded.
So if you are already receiving Social Security, go online and designate your future rep payee. If you are not, then I guess you and I can sit here together and look at that nice toy on the shelf, and dream about playing with it someday.
Kenneth Kirk is an Anchorage estate planning lawyer. Nothing in this article should be taken as legal advice for a specific situation; for specific advice you should consult a professional who can take all the facts into account, instead of sitting around playing with toys.
