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Washington State Streamlines and Improves Guardianship Process

Among the bills passed by Washington state lawmakers this session, was one that will make the guardianship application process easier for parents, reports Public News Service in the article “Guardianship Process to Be Streamlined in WA.”

The article quotes Sterling Harders, president of Service Employees International Union 775, who says that her union represents thousands of parents who care for children with intellectual and developmental disabilities.

Harders remarked that she’s heard from members that the road to guardianship was complex and expensive, when their children turned 18.

In addition, the guardianship process also differs from county to county.

Two bills in Washington state address these issues, which will ease some of the burden for parents.

"Life is difficult enough for these folks having to take care of special needs kids,” she states. “They don't need one more thing to worry about, and so we are really hopeful that these two bills will make life just a little easier for parent providers."

The Uniform Guardianship Act, Senate Bill 5604, is designed to standardize the guardianship process through Washington’s 39 counties and create a monitoring system and model training program. The bill currently is on the governor's desk.

The bill requires a background check on an agent of a guardian who provides services to the individual subject to a guardianship or conservatorship. It also requires a court hearing to resolve allegations in a grievance against a guardian or conservator.

The second bill is House Bill 1329. It creates alternatives to full legal guardianship. The bill was signed in April and goes into effect at the end of July.

In Washington, there are professional guardians, public guardians and lay guardians. A one-size-fits-all law for guardianship does not work well for families whose children have different disabilities.

One parent described the current guardianship as being limited to a two-sided construct: being incapacitated or being a person who is not incapacitated with full legal rights. She said there needs to be room for different options within that continuum. A one-size fits-all guardianship simply doesn’t work for many families with special needs individuals.

Reference: Public News Service (May 16, 2019) “Guardianship Process to Be Streamlined in WA”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899

How To Ensure a Substance Abuse Trusts Works

The best trust in the world will not work as intended, if the trustee is unable to fulfill their duties with the right actions and decisions, reports Kiplinger in the article, “Selecting the Right Trustee and Protector for a Substance Abuse Trust.”

In this situation, it may be better to have an institutional trustee, rather than a family member or family friend to serve as the trustee . In that case, parents may want to add a person to the equation: the trust protector, who supervises the trust and works with the trustee to be sure the trust is being properly administered.

The basic duties of a trustee include a fiduciary duty to administer the trust in good faith and in accordance with its terms and purposes; loyalty to the beneficiaries, by acting solely in their interests; invest the trust property prudently by considering the purposes, terms, distributional requirements, and other circumstances of the trust; and to act impartially, when there are multiple beneficiaries.

There may also be special duties of the trustee. For a child with a substance use disorder, the trustee’s duties for distributions could be linked specifically to paying for the costs of rehab, job training, professional service fees and other items that are part of the treatment plan developed by the beneficiary’s treatment team. Tying distributions into the treatment plan would mean the trustee, and maybe someone familiar with treatment management, would have to work closely with the treatment team to carry out the plan.

If the trust has incentive clauses, the trustee will also have to determine if the beneficiary has attained the goal (like sobriety for a certain period of time) and if so, the benefit to which he or she’s entitled. These can be hard to administer, since it can be hard to verify if the beneficiary has actually met the goals.

If the beneficiary is eligible for government program benefits, like SSI or Medicaid or from private health insurance, another set of duties will be placed upon the trustee to make certain that distributions won’t be classified as “maintenance” or “support.” If so, it could result in the child being declared ineligible. Since distributions from the trust are meant only to supplement the benefits that SSI or Medicaid is providing (and not duplicate or supplant them), the trustee will have to closely watch the uses of the distributions, so they aren’t support and maintenance.

You must next look at potential candidates, to see who’s best suited for the role of trustee. There are two categories of trustees: individual and institutional. Individual trustees can include family members. The advantage here is that they’ll know the beneficiary and can give more personalized service than an institutional trustee. However, appointing a family member or friend as trustee may ruin the relationship, if the trustee denies the beneficiary’s demands.

You can appoint a trust company, bank trust department, or a corporate trustee connected to a brokerage firm to serve as the trustee to avoid possible family conflicts. However, some institutional trustees may be more focused on their investment performance, than on tending to the mental and physical needs of their beneficiaries. In the case of a substance abuse trust, “hands-on” involvement with the beneficiary is vital.

One alternative may be to appoint an individual and an institutional company to serve as co-trustees. The individual could be personally involved with the beneficiary and their treatment plan, and the institutional trustee could deal with and handle the investments. However, both trustees should make distribution decisions. The best type of institutional trustee for a substance abuse trust, would be one that works primarily in administering special needs trusts. These are created for the benefit of children with disabilities. These trustees will be knowledgeable about SSI and Medicaid eligibility rules.

A trust protector, depending on applicable state law, acts as the settlor’s surrogate. This continues even after the settlor dies. This allows the trust to adapt to changing circumstances. The trust protector could also direct the trustee’s actions concerning how the trust assets would be invested and could approve or deny proposed disbursements from the trust. The trustee would be obligated to comply with such directions, unless they would be manifestly contrary to the trust’s terms or a breach of the protector’s duties.

As far as a substance abuse trust, a trust protector can provide supervision, if the trustee doesn’t possess experience in coordinating trust distributions with a substance abuse treatment plan, or with monitoring the beneficiary’s eligibility for government aid programs. Instead of the trustee appointing agents to assist in these matters, the protector would actively monitor the progress of the beneficiary’s recovery and, if necessary, direct the trustee to engage a treatment manager for the beneficiary or an advocate to secure SSI and Medicaid benefits.

The ultimate goal of a substance abuse trust, is for the beneficiary to have the resources they need to reach recovery and stay there. With a knowledgeable and compassionate team in place, the hope is that the road to recovery might be smoother.

Reference: Kiplinger (March 8, 2019) “Selecting the Right Trustee and Protector for a Substance Abuse Trust”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899

Georgia Woman Tries to Steal Trust Fund from Special Needs Son

She’s facing a long series of charges: perjury, forgery, identity theft, theft by deception, criminal solicitation and exploitation of an at-risk adult. Even worse, the Georgia woman who surrendered to police, was exploiting her own son, who is still missing. She will not tell police of his whereabouts.

Yvonne Longmire’s son, 20-year-old Lee Earnest Longmire has been declared a ward of the state but his guardian at the Georgia Division of Family and Children Services has not seen him or cared for him.

11alive.com’s recent report, “Mother accused of trying to swindle special needs son out of trust fund turns herself in,” says that Yvonne Longmire and her attorney informed the police that Lee is “okay” but haven’t divulged his whereabouts or cooperated in turning him over to DFCS, as ordered by the state. The attorney told police that a doctor signed off on Lee’s recovery, stating he had become higher functioning. The man has special needs and has not been seen in years. His mother is accused of attempting to scam him out of his trust fund.

"Obviously, there are different interpretations of what OK is. We need to make sure that he's OK to the standards set forth by the state," Gwinnett Police spokesperson Wilbert Rundles said.

Yvonne Longmire is accused of hiring another man, 23-year-old Maurice Ford from Atlanta, to take her son’s place in court to convince a judge that he no longer needed a conservator over his trust fund, which is valued at $200,000. However, before the funds could be withdrawn and given to Yvonne, the former conservatory attorney and his paralegal became suspicious and called the police.

According to the police report, Yvonne provided a driver’s license to the attorney, who acted as Lee’s conservator, but he said the picture didn’t look like Lee. The paralegal found a photo of Lee on Facebook, and the two confirmed it wasn’t the same person.

But one of Lee’s old teachers also saw the driver’s license and said it was him, according to the police report.

Maurice Ford was arrested in Phoenix, Arizona and is currently awaiting extradition to face charges in Georgia. In the meantime, the search continues for Lee.

The primary concern now is the safety of the son. Until his mother is willing to disclose his whereabouts, it will be impossible for the social service agencies to know, if he is safe and being properly cared for.

Reference: 11alive.com (March 5, 2019) “Mother accused of trying to swindle special needs son out of trust fund turns herself in”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899

What is a Special Needs Trust and Do I Need One?

The special needs trust, sometimes referred to as a supplemental needs trust, is a legal structure that manages the assets and may receive contributions from a variety of sources during the lifetime of the beneficiary, according to WTOP’s recent article, “5 reasons to consider a special needs trust.” A special needs trust can also be created to receive assets from a legal settlement, when the recipient is a minor.

Other special needs trusts are part of an estate plan, when family members want to provide assets or life insurance proceeds at their own death as an inheritance for someone with special needs. If you’re not clear about a need for a special needs trust, talk with an elder care or trusts attorney to review your specific situation. In the meantime, here are some common uses:

Reserving assets for support during your life or at your death. Trusts are typically intended to provide a legal way to title and hold assets to be used to help beneficiaries. This trust is used to benefit someone who has physical or mental disabilities. A special needs trust can be used to provide for a variety of needs and the initial trust language specifies the donor’s intended use of the funds.

Designating a trustee. A major benefit of a trust is the ability to appoint a trustee to manage investment decisions and oversee the distribution of the trust assets. With a beneficiary who’s unable to manage finances independently, the trustee can safeguard the assets and administer spending decisions. The trustee must also ensure that the trust assets are used pursuant to the initial intentions.

Maintaining a disabled person’s aid from a government program. It’s not uncommon for a well-meaning family member to err and name the disabled family member as a beneficiary in their will. This could actually disadvantage the individual, by disrupting the aid they receive from the government. Many government programs have income requirements that cannot be exceeded. To protect the beneficiary, grantors can direct the intended inheritance or life insurance benefits to the special needs trust. This won’t jeopardize government income or other services that may be their sole source of support.

Preserving family wealth. This trust structure can create a way to provide assets, while limiting their use. A special needs trust also helps ensure that wealth is allocated properly.

If any of these situations apply to your family, think about creating a special needs trust during your lifetime. You can also wait to change your estate plan to establish the trust upon your death.

You’ll want to work with an attorney who has experience with special needs trusts, since there are tax and estate planning considerations that need to be considered.

Reference: WTOP (October 25, 2018) “5 reasons to consider a special needs trust”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899

ABLE Account: Achieving a Better Lifestyle

Parents of special needs children must make major decisions about their children’s treatment, sometimes on a daily basis. They may need to arrange for therapies and pay for medicine and assistive technology. Looking beyond today, parents may wonder how their child will fare after they are gone. Fortunately, an ABLE account may give them the opportunity to support their child’s future needs by taking action now.  

Achieving a Better Life Experience (ABLE)

The ABLE Act of 2013 amended Section 529 of the IRS Code to allow the creation of tax-free savings accounts for people with disabilities. The accountholder and his or her family contribute to the account, which is then used to pay for disability-related expenses. An ABLE account is not intended to replace benefits like SSI or Medicaid. Instead, the funds in an ABLE account can be used to supplement those benefits.

Benefits to Setting Up an ABLE Account

Parents may wonder why they need to use a special account to save for their child’s future needs. Can’t they just set up a savings account. Well, ABLE accounts offer some significant benefits, including:

• Qualified Disability Expenses Covered. The money saved in an ABLE account may be used to pay for qualified disability expenses. Although the list of qualified disability expenses may vary a little, it generally includes things like housing, education, and transportation.
• Government Benefit Eligibility. Funds up to a certain amount may not be counted against the account holder’s eligibility for needs-based government benefits. This include SSI and Medicaid.
• Enroll in Any State. People who want to open an ABLE account are not limited to the account offered by their state agency. So, if you live in New Mexico, but Rhode Island has a better plan, you can form a Rhode Island ABLE account.
• Anyone Can Contribute. Parents are not the only people who can contribute to a disabled individual’s account. There are yearly limits to contributions, however.

ABLE Account Eligibility

To qualify for a Rhode Island ABLE account, applicants must meet the following requirements:

• Became disabled prior to age 26.
• Is either eligible for SSI or SSDI because of a disability, suffers from blindness, or a doctor has diagnosed a similar illness.

ABLE account holders must recertify every year.

Estate Planning May Help Also

At the Lambros Law Offices, we do more than hand you a stack of documents and tell you where to sign. We explain everything every step of the way until you have an estate plan that fits.

Call us at 401-383-9899 or check out our website. Though our office is located in Cranston, we assist clients through Rhode Island including Providence, Kent, and Washington Counties.

Meeting the Challenge of Special Needs Planning

A loved one with a disability requires extra attention. From special equipment to appointments with specialists, your time and energy may focus on improving quality of life. But future needs may also be a concern. Special needs planning may offer some relief from the challenges of helping someone with a disability.

Special Needs Planning Through Trusts

Trusts consist of the following:

• A grantor, who creates and funds the trust;
• Trust assets, the money or property owned by the trust;
• The trustee, who manages the trust; and
• At least one beneficiary.

Another important part of a trust is purpose. For a special needs trust, that purpose is pretty obvious – to care for a person with special needs.

The less obvious reason to set up a special needs trust is to help a disabled person qualify for needs-based benefits like Medicaid or Supplemental Security Income (SSI). In many cases, the assets in a special needs trust are not considered countable assets. This is important because needs-based benefits may require benefit recipients to stay below a certain income and resource level. Moving excess income and assets to a special needs trust may help a disabled person keep and retain the benefits they need.

Types of Trusts Used for Special Needs Planning

The two basic types of special needs trusts have very distinct differences.

• Third-Party Special Needs Trusts – For this trust, a third-party establishes the trust for the benefit of a disabled person. The trust is funded with assets that do not belong to the disabled person. For example, Stan L. and his wife, Marsha, created a trust for their grandson, Bradley, who has special medical needs. Because Bradley’s money was not used to fund the trust and Bradley is not the grantor, it is considered a third-party special needs trust.
• First-Party Special Needs Trusts – Sometimes called a self-settled special needs trust, the assets used to fund this trust belonged to the beneficiary. Insurance settlements and inheritances are often used to create a first-party trust. As long as the beneficiary cannot alter the terms of the trust, it may be considered irrevocable. An irrevocable trust is less likely to render the beneficiary ineligible for government benefits.
  
  For example, if Stan L. left an inheritance for his grandson, the money could be placed in a first-party special needs trust. Likewise, if Bradley became disabled due to an auto accident, any insurance proceeds could be placed directly into a special needs trust.

Trusts are complicated. Any trust you establish, whether special needs or not, could have unintended consequences if drafted incorrectly.

Avoid Special Needs Planning Mistakes

At the Lambros Law Office, our attorneys help clients develop special needs plans that meet their life circumstances. To schedule an appointment, call 401-383-9899. You may also use our convenient Contact Form to let us you know are ready to get started. We assist clients throughout Rhode Island, including Cranston, Providence, and Warwick.

Planning for a Disabled Child and an Inheritance

Parents who have devoted their lives to providing care to disabled adult children worry about what will happen, when they are gone. If an adult child depends upon support services provided by Medicaid, a Supplemental Needs Trust may be needed to ensure that any inheritance does not put those services at risk.

Kiplinger’s article, “How to Plan Ahead for a Disabled Child’s Inheritance,” notes that, without a controlled environment and attentive support system that parents carefully construct and protect, a special needs child’s world would fall apart.

Many of these individuals are entitled to means-tested benefits, like Medicaid or a Medicaid waiver program, Supplemental Social Security Income, Supplemental Nutrition Assistance Program, the Housing Choice Voucher Program and other services essential to their support system.

The issue for many of these parents is to ensure that their children will sustain their secure and protected lifestyle, without losing eligibility for essential means-tested benefits or having someone take advantage of him when the parents are gone. With the help of a qualified elder law attorney, parents can direct the inheritance of a child with special needs to a Supplemental Needs Trust. It’s a federally-approved strategy that will shelter those funds from creditors, secure them against waste and malfeasance, and exempt them from income and resource limitations, so the child can access the programs that will help ensure a productive and enjoyable life.

To qualify, a Supplemental Needs Trust must serve just one beneficiary for life. It must include specific terms and legal references, provide certain trust powers and limitations and weigh the loss of eligibility against the benefit of each non-supplemental distribution. The various federal and state programs usually cover housing, food, utilities, medical care and medicines. A Supplemental Needs Trust can pay for all non-covered medical, ophthalmological and dental care, private rehabilitation training, services or devices, supplementary education assistance, entertainment, hobbies, transportation, personal property and personal services.

The rules governing trust distributions are very strict. Structuring a successful Supplemental Needs Trust requires an elder law attorney who is experienced in state and federal program laws, with a very solid understanding of the state office’s interpretation of the regulations and local program directives, as well as an informed relationship with the local program decision-makers. He or she should also stay on top of changes in the law, by attending continuing legal education courses.

A qualified trustee is also an important part of planning for the future. This person will need to understand that public assistance programs can be challenging to navigate, must understand how the trust works and know when they are in over their head and need the help of an elder lawyer. They must also know when and how to make distributions that are in the best interest of the beneficiary and in compliance with the rules for the trust and for government benefits.

 

Reference: Kiplinger (May 16, 2018) “How to Plan Ahead for a Disabled Child’s Inheritance”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899 .

Special Needs Trust: Support for the Future

People with special needs often need lifelong medical and financial support. For example, a young man named Alex was born with intellectual disabilities. His parents fully expected him to outlive them but wondered who would take care of him after they were gone. Another family wondered who would pay future expenses for their daughter, Zoe, who was paralyzed in a motorcycle accident. Fortunately, there are ways to provide support for the future of someone with special needs.

The Special Needs Trust

A trust usually consists of a settlor, a trustee, and at least one beneficiary. There are different types of trusts for different purposes. A special needs trust is designed for two specific purposes:

• To provide support for someone with a disability or medical condition who may need additional financial support in the future; and
• To support the beneficiary without affecting eligibility for benefits like Medicaid.

As Alex and Zoe’s families explore ways to provide for their children, their attorneys may suggest establishing a special needs trust as one solution.

Types of Special Needs Trusts

There are variations in how a special needs trusts can be structured:

• Third-Party Special Needs Trust. Also known as a Supplemental Needs Trust or a Third Party Trust, this type of trust is aptly named. Someone other than the disabled person established (a third party) and funds the trust. The trust is not usually vulnerable to creditors because the beneficiary does not own the trust assets. Any funds remaining in the trust when the beneficiary passes away are distributed.

This type of trust might be something Alex’s family could consider. His parents could set up the trust, naming Alex the beneficiary. Even after his parents are gone, he may still receive payments from the trust that supplement his other income or benefits.

• First-Party Special Needs Trusts. For decades, disabled individuals had to rely on third parties to establish special needs trusts on their behalf. This presented an almost insurmountable problem for individuals without family members to act as third parties. Now, individuals may establish “self-settled” or first-party special needs trusts.

Although Zoe has family members to act as third parties, being able to self-settle her trust feeds her need to be as independent as possible. Zoe had filed insurance claims and sued the person responsible for her motorcycle accident. When Zoe receives her insurance settlement and proceeds from the lawsuit, the money should go directly to the trust she established. This may preserve her eligibility for government benefits like Medicaid.

This article presents basic information about special needs trusts. Before establishing one, discuss all the options available for your loved one.

Learn More About Special Needs Trusts

At the Lambros Law Office, our attorneys can help you navigate the complexity of special needs trusts. To schedule an appointment, call 401-383-9899. You may also use our convenient Contact Form to let us you know are ready to get started. We assist clients throughout Rhode Island, including Cranston, Providence, and Warwick.

What is the Impact of the New Tax Law on Special Needs Families?

A recent article appearing in Kiplinger, “How to Use College Savings to Benefit Children with Special Needs,” explains that the new tax law now permits money from a 529 to be rolled into an ABLE (Achieve a Better Life Experience) account for children with special needs.

This year, a person can roll over up to $15,000, which includes any rollovers and new contributions to the ABLE account. However, if you’ve already put some money into a child’s ABLE account in 2018, the contributions will decrease the amount you can roll over this year.

To transfer a larger balance from a 529 to an ABLE, you can spread your rollovers over several years. You can also roll over the money from any state’s 529 into any other state’s ABLE. However, you can only have an ABLE in one state at a time. A rollover is only allowed if the ABLE account beneficiary is the same as the 529 beneficiary or a “family member” of the 529 beneficiary. The “family member” definition is a bit different for 529s and for ABLEs, and the states are working on the details.

In fact, because the rollover provision is so new, many states don’t yet have forms to make the transfer automatically.

Moving money from a 529 to an ABLE can be very helpful for families that started saving for a child’s college in a 529, but aren’t sure if the child will go to college because of a disability. By rolling over money from the 529 to the ABLE, a family can use it tax-free at any time for a wide range of qualified expenses to help a child with special needs maintain or improve his health, independence and quality of life. These expenses include education, housing, transportation, living expenses, employment training, assistive technology, legal fees and personal support services.

The money in the account also doesn’t affect eligibility for most government disability benefits, and up to $100,000 doesn’t count toward the $2,000 asset limit for Supplemental Security Income Benefits.

To qualify for an ABLE account, beneficiaries can be any age, provided they developed a qualifying disability before age 26. They also must meet the disability requirements of either Supplemental Security Income or Social Security Disability Insurance. They’re automatically eligible, if they started receiving those benefits before age 26. Alternatively, they must submit a “disability certification” from a physician confirming that they meet the functional disability criteria.

The choices for ABLE accounts have grown to include 30 states and the District of Columbia. Plans are open to people who live in any state, although some give tax deductions if you contribute to your own state’s guidelines. Before you open an account, make sure to do the necessary research: compare the required initial contribution, fees and investment options.

Reference: Kiplinger (January 30, 2018) “How to Use College Savings to Benefit Children with Special Needs”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899 .

How to Plan When the Diagnosis is Alzheimer’s

For one family, an adult child is trying to figure out how his mother and non-working siblings will have enough money to live on. His father, 82, was diagnosed with Alzheimer’s. For now, his mother, 78, is able to be his caretaker, but that will change over time. In addition, his two siblings have mental health issues and cannot work. His parents do have long term care insurance in place, and $1 million in retirement funds. Even if they set up a trust fund for his non-working siblings, will they have enough money to care for everyone?

nj.com’s recent article, “How to help Mom when Dad has Alzheimer's,” advises that those in this or similar situations can benefit from meeting with an elder law attorney about special needs trusts and other benefits planning.

In many states, the average daily cost of nursing home care is more than $450. Money from a long-term care policy can help in stretching other available resources to privately pay for long-term care if necessary. Medicaid might also come into play.

Medicaid is a needs-based program which has income and asset limitations that are applicable before an individual can qualify for assistance. There’s a penalty on any transfers made within five years of applying for Medicaid. The penalty is the number of months that a person will be ineligible for the program. The penalty period begins to run only after an individual enters a nursing home and would otherwise be eligible for Medicaid—not at the time of the transfer. During the penalty period, Medicaid won’t pay for the nursing home. The senior is on his or her own, and private funds must be used.

If gifts or sales take place for less than fair market value within five years of applying for Medicaid, there will be a penalty. Families planning for the future need to understand the consequences of any financial transactions made within that five year look back period, and whether or not they may be incurring a penalty. If the wrong decisions are made, they could render the person ineligible for Medicaid for a period of time after assets have been spent.

An elder law attorney needs to review the entire picture to protect all of the family members, help navigate the Medicaid application and create a plan for the future.

Reference: nj.com (December 7, 2017) “How to help Mom when Dad has Alzheimer's”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899 .