Regulations/Administrative

Transcription

1 SNT Update 2017 Robert B. Fleming Fleming & Curti, PLC Tucson, Arizona Robert W. Fecthman Fechtman Law Office Indianapolis, Indiana

2 Regulations/Administrative

3 2018 COLA (and Other) Numbers Social Security: 2% increase (compare 2017 s.3%, 2016 s 0%) Supplemental Security Income: $750 individual, $1,125 couple Presumed Maximum Value: $270 ( $480 post-ism SSI) Quarter of Coverage: $1,320 Substantial Gainful Activity: $1,180 ($1,970 for blind) Trial work period: $850 (in 9 of 60 mos.) Estate tax exemption amount: $5.6 million Annual gift tax exclusion: $15,000 (also used for ABLE annual maximum)

4 Special Needs Trust Fairness Act Part of 21 st Century Cures Act, PL December 13, 2016 Adds the individual to the list of permissible establishors Affects all trusts executed after effective date Questions: What about trusts established by agents? What about seeding trusts established by parents?

5 CMS State Medicaid Director Letters # re: ABLE All ABLE funds and payments ignored for both MAGI and non- MAGI eligibility tests Non-QDE expenditures not counted, but If a distribution is made and then used for a non-qde purpose, it is a resource in the month so used States required to pursue reimbursement from ABLE account # re: 21 st Century Cures Act Effective date is 12/13/16; earlier self-established trusts fail Helpful language explaining SNT Fairness Act portion

6 Not In Materials

7 National Foundation for Special Needs Integrity v. Reese (ND Ind, 3/21/17) Theresa Givens, 49, signs up with pooled trust on October 10, 2011; ± $250K deposited to trust account Givens dies November 19, 2011, intestate On trust joinder form, Givens lists herself as contingent/remainder/alternate beneficiary #1 Joinder agreement says after Medicaid payback, remaining sums will be retained by the trust 1½, and then 2½, years after death, trustee transfers half of trust to its general funds 3½ years after death, Givens estate demands remaining funds and trust files declaratory action

8 The Shane Service Story So, Robert is anything going on with Shane Service these days? Seventh Circuit appeal in National Foundation for Special Needs Integrity v. Givens (oral argument Sept. 27) Indiana Lawyer article: Suspended special needs trust attorney, foundation s legal woes continue, Sept 28, 2017?? Next chapter

9 Matter of Skinner (NC 9/29/17) 2010: guardianship of person filed; marriage to Mr. Skinner, who is appointed as guardian 2012: mother dies, leaving $ K (really $175K) to Mrs. Skinner 2013: probate clerk appoints Mr. S as guardian (estate), directs SNT, annual accounting to Mrs. S s sister 2014: SNT actually established, sister complains two months later Probate clerk: paying Mr. S s legal fees, buying house, pre-paying funeral breached fiduciary duty Probate court yes; CtApp 2-1 no, Supremes 4-3 yes

10 Matter of Application of Keybank National Assoc. (NY Surr, 9/25/17) NB: probate court decision, not appealed 2001 SNT allowed payment of funeral expenses before Medicaid payback 2017 petition to amend language to conform with d(4)(a) State Medicaid agency objects, seeks change of venue Court denies change of venue, allows modification Lectures Medicaid on its role, which is not to take over as drafter of trust Observes that court s role is to strike a balance to protect both the beneficiary and the State s remainder interest

11 Puff v. Puff (Conn.App. 10/10/17) Alimony modification case; parties agree in principle on (among other things) assigning wife s alimony to a SNT Parties agree to hire SNT expert to draft trust Alimony payment is to be $10,000 / month; unclear on whether that is to be net of tax Wife objects once she learns that she will be taxed on Husband s SNT contributions Trial court rules that terms were final, Wife is bound by agreement Ct of App agrees, but reverses contempt order against Wife

12 In Materials

13 Matter of Calley (LaApp 9/21/17), p (pre-obra 93) SNT; trust language refers to a special charge against the trust for reimbursement Beneficiary died in 2015 Medicaid sought $1,080, in Medicaid payments Trial court grants Medicaid s request for reimbursement in full Court of Appeals affirms, despite Ahlborn-style argument by remainder beneficiaries

14 Williford v. NC DHHS (NCApp 11/15/16) p.5 Workers Comp Medicare Set-Aside established at age 65 Medicaid found ineligible, citing $46,630 in WCMSA Trial court upholds Medicaid; Williford appeals Williford argues that WCMSA can only be used for Medicare-approved medical costs from WC injury State argues that nothing on the bank account says it s restricted, and the only thing Williford has is a resulting trust?! Ct App rules WCMSA is not an available resource, makes fun of state s arguments

15 Hutson v. Mosier (KanApp 9/8/17) p.3 Marcia Hutson, 72, transfers $59, to ARCare Trust II Pooled Trust Two weeks later Hutson applies for Medicaid, is denied for transfer penalty Appealed to District Court; lost. Appealed to Ct App Ruling: Transfer penalty rules for >65 pooled trust apply BUT remanded for determination about whether Hutson received value for her transfer

16 Jones v. Metrohealth Medical Ctr (OhioApp 8/24/17) p.6 In personal injury trial, defendant argued that plaintiff could sign up for Obamacare policy and it would pay medical expenses, so liability should be reduced accordingly Plaintiff argues that Obamacare is speculative, state statute permitting collateral source evidence is unconstitutional, and anyway Obamacare won t pay custodial care costs Trial court deleted all costs from life care plan except transportation, home care and housing Ct App agrees that custodial care would not be covered by Obamacare, allows other reductions

17 Cuevas v. Contra Costa County (Cal.App. 4/27/17) p.7 Another action applying state statute permitting collateral source evidence Minor point in underlying trial and appellate opinion: trial court should not have precluded evidence of Obamacare as too speculative Ct App specifically notes that Republicans can t get Obamacare repealed

18 Petition of Hagenbuch (NH 1/13/17) p.5 Self-settled SNT paid: Administrative expenses, legal fees, investment management expenses and tax preparation fees, and Legal fees to help beneficiary secure public benefits State DHHS terminated food stamp benefits, finding all payments (though to third parties) were countable Supreme Ct rules that such distributions are not income because the payments were not owed to the beneficiary Trustee has discretion Beneficiary has no power to compel or amend One justice invites State to argue that trust s investment income is available on remand

19 In re Feuerstein (NYApp 2/28/17) p.8 Testamentary trust specifically waived bond Surrogate s court decided to impose bond because, well, special needs trust. And Surrogate s court Appellate court says no, bond waiver is bond waiver. Also accounting waiver is accounting waiver Should we always ask for bond? Sometimes?

20 Guardianship of Jones (Maine, 1/20/17) Lawyer/Judge feud related to election race? Lawyer files petition for SNT, citing need to get Medicare. Judge signs order Next annual accounting, lawyer shows payment to care facility for $25,000 basically exhausting trust Judge appoints GAL to scrutinize, appoints new GAL after that one reports Lawyer withdraws, Judge writes new SNT, orders lawyer to disgorge fees as penalty Lawyer appeals; Supreme Ct says no due proocess

21 Keller v. Keller (Mo.App. 4/25/17) p.11 Domestic court awards child support for over-18 child with disability, orders that payments go to SNT Ct App affirms, finding sufficient evidence of child s disability Interesting asides: Mother was the one ordered to pay child support Mother s hope that child would not be labeled as mentally incapacitated brushed aside Child receiving $734 (?) in disability benefits in 2013 (?)

22 Unreported Cases Worth Mentioning

23 Guardianship of Junk (Wash.App. 12/6/16) p.12 Ct App reverses probate judge s wild-hare decision to arbitrarily and unilaterally reduce corporate trustee s fees for past year and future years Trust provided for fees according to trustee s published schedule GAL reported that fees seemed high

24 Campbell v. Peterson (Cal.App. 2/22/17) p.13 Trustee made several mistakes; petition filed to remove and surcharge Her new attorney negotiated resolution involving her resignation but no surcharge Her attorney filed fee request for $130K; $18K was approved by probate court Ct App ruled that most of lawyer s work was for benefit of trustee individually, and he was not winning party Oh, and he probably shouldn t have tried to object to the new trustee s fees (or those of his attorney) either