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A roundup of elder law news and practice development articles culled from news sources across the nation during the week of November 21 to November 27, 2023.READ MORE
The Supreme Court of the State of Montana holds that the district court was correct in applying the doctrine of equitable conversion to insurance proceeds. In the Matter of the Estate of Ronan (Mont. DA 23-0111, October 24, 2023).READ MORE
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FROM THE KNOWLEDGE BANK
ASNP welcomed former Social Security Administration team leader Kenneth Brown (left) as a speaker at its 2018 Annual Meeting in Las Vegas. In his warm introduction of Brown, Florida ASNP member David Lillesand humorously compared Brown to God in recognition of the “hundreds and hundreds of regulations” that Brown wrote throughout his 37-year career working at the SSA.
Brown had significant input into the soon-to-be-released updates to the SSA’s POMS on special needs trusts (SNT), and thanks to his recent retirement, was able to give ASNP meeting attendees a preview of the proposed provisions while emphasizing that they are subject to revision until published. As for when the long-awaited POMS rewrite will finally be made public, Brown said “I can’t tell you when it’s coming out. Every time I do that I get it wrong . . . . But I know it’s in the final clearance process, so hopefully we’ll see it sometime in the very near future.”
Several revisions reflect policies that have been in effect, while others implement an across-the-board, common-sense approach to recurring questions and sometimes vague concepts.
Four sections of the POMS will be revised:
SI 01120.200 (third-party trusts established before 1/1/2000)
SI 01120.201 (trusts established with the assets of an individual on or after 1/1/2000)
SI 01120.202 (development and documentation of trusts established on or after 1/1/2000)
SI 01120.203 (exceptions to counting trusts established on or after 1/1/2000)
Here are the highlights of those changes:
Changes to current post-eligibility rules will impact SI 01120.200 and 201. New policy will be “broadening the case where you can go back and fix a problem with the trust that was created because of a policy change,” Brown explained. The new policy Brown expects to see will provide individuals with a 90-day amendment period to revise a previously excluded trust that becomes a countable resource due to a policy change, clarification, or reopening of a prior erroneous determination. The trust does not count as a resource during that 90-day period. A good-cause extension of unspecified length will also be available for those who may not be able to meet the 90-day deadline due to circumstances outside their control, such as getting a court date. “I think both of those changes in combination will have a lot of impact,” Brown said.
Sole Benefit Rule
The “Sole Benefit” rule, Brown noted, “has been the cause of more questions and consternation than I can really remember.” The language requiring trust benefits to be used for the sole benefit of the beneficiary has produced varied and sometimes nonsensical interpretations in SSA field offices. Anticipated changes to SI 01120.201, he said, will more reasonably address the needs of the SNT beneficiary, providing clarity and breadth as to what expenses trust funds can cover.
Under the expected new POMS, permitted third-party payments are expanded to goods and services received by a beneficiary that provide a “primary” benefit. As an example, Brown said that if a trust buys the beneficiary a new television, Mom and Dad will be able to watch it.
In addition, registration and titling of property can be in another’s name if purchased for the primary benefit of the beneficiary and the beneficiary is restricted by law from obtaining it in her name. Brown used the example of an unlicensed driver who is prohibited by state law from registering a vehicle in her name. The POMS will allow trust funds to be used to secure the registration, with appropriate protections for the SNT put in place.
Who can act as a service provider is also clarified to include a family member, non-family member, and professional, with the same SSA policy applicable to everyone. Companion services also will be considered a valid expense that a trust can pay for. Expenses such as hiring someone to sit with an Alzheimer’s patient or “to drive grandma to the store to help with her grocery shopping” will be valid companion expenses.
The revised POMS will likely allow trust funds to pay for third-party travel expenses not just when the beneficiary requires medical treatment, as is currently the rule, but when assistance is necessary due to the beneficiary’s “medical condition, disability, or age,” Brown said, calling this “quite a change.” If that third party makes travel possible for the beneficiary, then his transportation, lodging and food can be paid for from the SNT. That might mean, in some instances that two or three individuals, such as parents of a child with disabilities, who are needed to cover different shifts or needs of an individual can have their expenses covered. But this doesn’t mean that the trust can foot the bill for the entire family’s trip to Disney World, Brown noted. Unlike Mom and Dad, siblings of the beneficiary would likely not be in a position to make travel possible and the trust could not pay their way.
It is also expected that the new POMS will allow funds from the SNT to pay for a trustee’s travel to visit a non-institutionalized beneficiary. This greatly expands the current policy that narrowly limits reimbursement for travel to visit beneficiaries in long-term care facilities, and then only to ensure the beneficiary’s safety or medical well-being. The new policy covers a trustee’s travel to exercise her fiduciary duty and responsibility for the well-being of the beneficiary. Brown’s own opinion is that “the trustee can delegate that authority without too much problem.”
Changes to SI 01120.200 are anticipated to reflect current policy and use of the centralized trust review under the SSI Trust Management System (SSITMS), Brown said. The three-tiered review process starts with the Field Office Tech, who scans the trust into the system and makes an initial determination whether a trust is a countable resource. The Regional Trust Reviewer makes a mandatory second tier review. The Regional Trust Lead makes a more specialized review in cases where the first and second tier reviews cannot be reconciled, and the Lead makes the final decision. Where needed, the Lead will refer cases to the Regional Chief Counsel’s office or to SSA’s central office.
The new POMS are expected to make clear that trust disbursements to a beneficiary’s personal debit card are treated the same as disbursements to the individual. Also, the POMS will add instructions regarding assigning Military Survivor Benefit Plan benefits to an SNT.
In revisions to SI 01120.202, SSA will not have to review trust resource determinations unless there is new and material evidence, such as an amendment to a trust or a policy change. “If you’ve looked at it and made a determination that the trust is OK and nothing’s changed, you don’t have to look at the trust again for resource eligibility purposes,” Brown explained. “But you do have to look at any income implications.”
The new POMS will change SI 01120.202 to allow any party to an SSA determination to request to reopen the determination within a one- to two-year period, depending on the issue. Brown said the POMS will also incorporate an Emergency Message issued in 2016 stating that when eligibility is denied because a trust is counted as a resource, the SSA’s notice must include the specific part of the trust that is problematic, the POMS citation that contains the correct policy on the subject, and where the POMS can be found online.
“I’ve heard lots of stories recently that a lot of field offices are not following these instructions,” Brown said. “So my recommendation would be if you have a client who gets a denial notice and there’s a problem with the trust and the denial notice doesn’t contain this language, send them back to the office and request the language that’s required to be issued to them.”
SI 01120.203 will be updated to reflect changes from the 21st Century Cures Act for trusts established on or after 12/13/16. The Act allows individuals to set up their own trusts. The POMS rewrite also is expected to lay out the process for individuals requiring a court order to establish a trust and clarify that SSA considers a trust established with the disabled individual’s power of attorney (POA) to be established through the actions of the disabled individual. And, in order to qualify for a 1917(d)(4) exception, the individual whose assets were used to establish the trust must be disabled for SSI purposes at the time the trust was established.
Kenneth Brown’s materials will be available on ASNP’s member website shortly and audio of his presentation will also be made available soon.