A California appeals court rules that a probate court had the legal authority to create a special needs trust for a developmentally disabled adult through the vehicle of substituted judgment. Conservatorship of the Estate of Kane(Cal. Ct. App., 1st, No. A110631, March 6, 2006).
Kevin Kane is a developmentally disabled adult who lived with his mother until her death in March 1999. The court appointed a conservator for Mr. Kane and he now resides in a group home and receives Supplemental Security Income and Medi-Cal (Medicaid) benefits. Mr. Kane inherited about $65,000 from his mother, but unfortunately her estate planning did not include any special provisions for her son. Because the direct receipt of his inheritance would render Mr. Kane ineligible for government benefits, the conservator petitioned the court for a substituted judgment to establish a special needs trust for him. The probate court denied the petition, reasoning that it would essentially be only a substitute for Mr. Kane himself, and questioning whether Mr. Kane could be the grantor of such a trust.
The Court of Appeal of California reverses, concluding that statutory provisions authorizing a probate court to substitute its judgment for that of a conservatee gave the probate court jurisdiction to establish a special needs trust in such circumstances. The court cites supporting authority from other states, such as In re Gillette(Sur. 2003) 756 N.Y.S.2d 835, 838, in which a trial court granted a similar petition, even though the disabled person was essentially the grantor of his own trust. However, in an aside the court notes that its decision would have been different had Mr. Kane's assets come by way of litigation rather than inheritance.
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