Social Security and Powers of Attorney
In this article, we share a pain point for clients we have worked with, which deals with Powers of Attorney not being recognized by the Social Security Administration.
Social Security and Powers of Attorney
One key document in estate planning is a Power of Attorney (POA). A POA is a legal document that authorizes someone to act on behalf of another individual. These documents can be broad or specific in scope and temporary or permanent.
Durable Power of Attorney
The most common type of POA is a Durable Power of Attorney, which grants your chosen person or entity (agent) the authority to make decisions on your behalf if you become unable to do so.
Powers of Attorney are commonly used for spouses, adult children helping aging parents, or assisting family members with special needs.
Issues with the Social Security Administration
While POAs are established to manage financial decisions, the Social Security Administration (SSA) does not accept them. State laws govern POAs, and SSA has its own procedures for handling these matters to avoid the need for extensive paperwork.
If you are entrusting someone with your financial affairs, ensuring the Social Security Administration is informed is crucial. If you are transitioning financial responsibilities to another person, you can do this by proactively filing an Advance Designation of Representative Payee with the SSA. You can find more information on this here.
Areas Your Power of Attorney are Ineffective
In working with clients like you, particularly when working to be proactive for potentially diminished capacity, we have found that the following key areas cannot be changed/updated when dealing with the SSA:
- Assisting with withholdings
- Retrieving or requesting 1099’s
- Changing the mailing address
- Updating Bank Deposit Information
Where to Get Started
If you are currently dealing with issues or have an ongoing case with SSA, you can use the “Appointment of Representative” form (commonly known as SSA-1696) to authorize someone to assist with specific benefit-related matters. The form is available both in paper and online versions.
Financial Planning – Let’s make sure you’re okay
Do you feel confident that your income, savings, and investments in the stock market will sustain you to the end? Read this blog to make sure you're okay. Here at S.E.E.D., we're commonly approached by people just like you – people who care about their financial...
Using Gifting Limits as a Financial Planning and Tax Tool
Gifting can be a powerful financial planning strategy, allowing individuals to transfer wealth, reduce taxable estates, and help loved ones financially. Understanding the annual gifting limits, the tax implications, and the required documentation is essential for...
Investing vs Saving – How Do You Balance Saving for Retirement with Other Savings Goals?
Many wonder how they should balance investing vs saving. This article will help you strike a balance that works for you. This is a question we hear all the time from our clients, especially those who still have another 20+ years until retirement. The further away...