Tips on designing a guardianship plan

What are the responsibilities of a Guardian of the person and property of an incapacitated individual? The Guardian is expected to fulfill a broad array of obligations, since the Guardian is responsible to arrange for and oversee the financial and personal well-being of the person under guardianship. Each individual is unique, with her or her own preferences, likes and dislikes, and cultural experiences. In some cases, the Guardian is very familiar with the individual. In other cases, it’s all new and some investigation may be required to learn about the unique attributes of the individual. And of course an individual’s interests and needs will typically change over time.

New Jersey’s guardianship statute on this subject can be found at N.J.S.A. 3B:12-57 and there are other statutes surrounding it in the Probate Code.  Among other things, the Guardian needs to arrange for “the care, comfort and maintenance and, whenever appropriate, the education and training of the ward;”  must “develop a plan of supportive services for the needs of the ward and a plan to obtain supportive services;” and must take all measures required to attain eligibility for programs and benefits, to pursue assets that are owed to the ward, and to apply the available sums in the ward’s benefit.

To develop a plan,  create a budget. The budget needs to include every single recurring cost in a typical month or quarter. Determine the recurring sources of income and apply for benefits that are available. It may be necessary to apply for Social Security Disability or retirement income, SSI, employer’s disability pension, or to file a claim for any available long-term care insurance.  Do an assessment of whether the individual can stay in their current residence or if a different residence — or health care facility — would be more appropriate. Is in-home care needed? This becomes part of the budget. Is nursing home care required? It’s important to investigate the availability of Medicaid benefits. Are their unpaid bills or unfiled taxes? Start to tackle all of that and bring things up to date.

For a ward in the community, start investigating the social supports that can add meaning to that person’s life. Does the person enjoy attending religious services? See what needs to be done to bring the person to weekly services and have a companion there for assistance.  Perhaps the person can be enrolled in recreational activity at the local “Y” or senior center. Map out a plan of activity for an in-home caregiver to do — this might include reading aloud, exercise, outdoor walking excursions, movies, particular types of menus or trips to beloved eateries.

By putting together a thoughtful plan of activity to help the individual stay engaged in his or her cultural and social life, a Guardian can support the sense of well-being, happiness and security of the person under guardianship. In this way, the Guardian  can fulfill his or her legal obligation to “give due regard to the preferences of the ward, if known to the guardian or otherwise ascertainable upon reasonable inquiry. ”

Call us for legal advice in carrying out your responsibilities as a Guardian ….. 732-382-6070

Trustee of Special Needs Trust must be cautious in making reimbursements

A person who is receiving Supplemental Security Income (SSI) from the Social Security Administration must report changes in his income or resources (assets) to SSI, because this can affect his eligibility or the amount of benefits. If countable resources exceed $2,000 on the first of a month, eligibility can be lost. If the issue is detected after the fact, there can be a resulting overpayment than can take months to straighten out. If assets are placed into, or are being held in, a Trust, there might be an impact on eligibility depending on the terms of the Trust, how those assets are distributed by the Trustee, and how much control the SSI recipient has (if any) over the assets in the trust.

A Trust established with assets of the SSI recipient or applicant might be excluded from the $2,000 resource limit if it meets the many requirements  for a Special Needs Trust. Particular problems come up when somebody has been spending money on the beneficiary and needs to be reimbursed by the Trustee. The payments out of the Trust to that third party may be viewed by the Agency as improper disbursements that violate this “sole benefit” requirement if the trustee can’t produce satisfactory proof to justify the reimbursement. If the payments are made out of a first party trust, the entire corpus (principal; value) of the Trust may be treated as an available resource because the payments to the third party are “not for sole benefit” of the Trust beneficiary. If cash is just transferred out of the Trust to the third party’s account to use for the beneficiary, this can create problems as well.  The standards are explained by the Social Security Administration in this section 01120.201.2.b of of the procedure manual called the “POMS,”  where it says, ” …do not consider a trust that provides for the trust corpus or income to be paid to or for a beneficiary other than the SSI applicant/recipient to be established for the sole benefit of the individual.” The POMS continues:

. ” Exceptions to the sole benefit rule for third party payments

“Consider the following disbursements or distributions to be for the sole benefit of the trust beneficiary:

  • Payments to a third party that result in the receipt of goods or services by the trust beneficiary;
  • Payment of third party travel expenses which are necessary in order for the trust beneficiary to obtain medical treatment; and
  • Payment of third party travel expenses to visit a trust beneficiary who resides in an institution, nursing home, or other long-term care facility (e.g., group homes and assisted living facilities) or other supported living arrangement in which a non-family member or entity is being paid to provide or oversee the individual’s living arrangement. The travel must be for the purpose of ensuring the safety and/or medical well-being of the individual.”

These are limited exceptions. If the Trustee is issuing payments to individuals under the guise that it is a reimbursement for expenditures that aren’t within these narrow categories, there will be a presumption that the trust is giving out money to third parties unless the Trustee can prove otherwise. The Trustee of any Trust for benefit of a person on SSI needs to assume that s/he will have to provide accountings and receipts in exquisite detail for scrutiny by the Social Security Administration. Great care should be exercised once a trustee takes on this major responsibility.

For advice on establishing and administering Special Needs Trusts, call ….. 732-382-6070