Accounts For The Mentally Disabled

Question:

A customer has been appointed guardian for his mentally retarded brother. He wishes to open an account for the mentally disabled brother to deposit his SSI check and a check from an opportunity center. 1) Does there need to be a separate account for the SSI? 2) How should the title on be listed on the account, since the brother is not capable of writing checks? 3) What documentation other than the attorney's appointment of guardianship do we need for the account?

Answer:

The Social Security Administration controls proper payment of the SSI check. Technically, the guardian's appointment under state law does not give him the power to negotiate the SSI check; he should also be appointed as his brother's representative payee. The appointment will be virtually automatic, but he should ask for it.

Generally, a representative payee only has authority over the SSA/SSI check - nothing else should be deposited into an account opened by a representative payee. However, in this circumstance, once the brother has been empowered by both the state and SSA, there is no practical reason to establish a separate account.
The account should be titled: "John Doe by Michael Doe, Representative Payee & Guardian." (Government direct deposit regs require that the person entitled to the benefit be named in the account title. However, even if the handicapped brother were capable of writing checks in the practical sense, legally he is not entitled to access to the account.) Use John Doe's SSN.

You already note your need for a copy of the guardianship order. Anything you can obtain in writing regarding the representative payee relationship should also be requested, such as a copy of a letter from SSA to the representative payee, regardless of subject matter. However, if the item is direct deposited, I am told the advices also reflect the name of the representative payee and that should be more than enough to support the use of that label as well.

First published on BankersOnline.com 12/2/02