Special Needs Estate Planning
State Reporter: Lisa Nachmias Davis
Education: Juris Doctor, Yale Law School, 1990
Current Position: Partner
Certifications: Certified Elder Law Attorney, National Elder Law Foundation
Memberships: Connecticut Bar Association, American Bar Association, National Academy of Elder Law Attorneys, attorney member of Planned Lifetime Assistance Network (PLAN) of Connecticut, associate member of NAMI (National Alliance for the Mentally Ill)
Community Involvement: Member of Board of Directors of the Agency on Aging of South Central Connecticut, Inc., also serving on its Finance and Executive Committees
Articles: Co-author of the Elder Law Answer Book (2nd Edition) with Robert Fleming, an annually updated book; author, "What the Special Needs Trust Attorney Should Know," presented to the National Academyof Elder Law Attorneys Advanced Practitioners Program, March, 2005; author, "Keeping the Promise of Section 529 a Reality," published in the online news publication "The Elder Law e-Bulletin" (April 30, 2002)
Your State's Social Security Region: Boston
Your State's Federal Circuit: Second Circuit
Does your State Have a Specific Special Needs Trust Statute or Discretionary Trust Statute? Not specifically, but there are certain statutes that deal with the creation of self-funded special needs trusts by conservators, and with the interpretation of discretionary trusts. These statutes are among others, Connecticut General Statutes section 45a-655e relating to creation of (d)(4)(A) trusts, Connecticut General Statutes section 17b-261 relating to interpretation of "discretionary" trusts as compared to "support" trusts; and our statute relating to spendthrift trusts. Direct links to these statutes may be found on my webpage of links, http://www.sharinglaw.net/elder/lawlinks.htm.
Are there State-Specific:
Resources: Office of Protection and Advocacy and other state offices may provide a resource for individuals with special needs; a list of some of these may be found on my webpage for disabled individuals, http://www.sharinglaw.net/disability/helplinks.htm
Administrative rules: Yes: Department of Social Services Uniform Policy Manual, and a host of rules regarding various programs including those run by Depatment of Mental Retardation.
Manuals/Standardized Forms: No (the manual referenced above is a set of regulations and does not provide forms); there may be internal manuals not made available to the public.
Important Case Holdings:
Yes. I maintain a list of "important" cases on special needs and elder law issues on my own website, at http://www.sharinglaw.net/elder/keycases.htm. With respect to Special Needs Trusts, I would cite: ·Corcoran v. Department of Social Services (Conn., November 9, 2004), Parkhurst v. Department of Social Services (Conn. App. May 11, 2004), Department Of Social Services v. Saunders, Conservatrix, 247 Conn. 686 (1999), Kolodney v. Kolodney, 6 Conn. App. 118 (1986), State v. Murtha, 179 Conn. 463, 427 A.2d 807 (1980), Zeoli v. Commissioner of Social Services, 179 Conn. 83, 425 A.2d 553 (1979), Bridgeport v. Reilly, 133 Conn. 31, 47 A.2d 865 (1946), Greenwich Trust Co. v. Tyson, 129 Conn. 211, 27 A.2d 166 (1942), with unreported cases including State v. Hennebery, No. CV020098667S (J.D. Middlesex at Middletown, December 16, 2003)
Pronouncements: The Attorney General's office has taken the public position that the funding of an annuity for the benefit of a community spouse of an institutionalized applicant for Medicaid, in an amount that would generate income in excess of that spouse's minimum monthly needs allowance, is a disqualifying transfer. The Attorney General's office has also taken positions in the past that were found contrary to law in this arena.
Fiats: The Department of Social Services is subject to a federal consent decree and district of Connecticut requirements relating to the timeliness of ruling on applications and on granting hearings.
Interpretations/Unusual interpretations of the law: Certain benefits that are subject to SSI/Medicaid rules in other states are run through state-funded programs in Connecticut, which can creaet problems. The Parkhurst case cited above held that an individual who created a d4A trust from proceeds of a lawsuit was ineligible for the "cash assistance" program that pays for room and board in group homes that house virtually all mentally retarded persons in Connecticut, both because it was a countable asset, AND because its creation was a transfer of assets for which the penalty divisor was $500/month.
Does the State run a tab? I.e., does the State track the cost of services to the beneficiary and present a bill if the individual inherits funds or otherwise acquires funds? Yes.
Does the State have specific statutes or regulations on County medical services and reimbursement of costs? We do not have "County" medical services, etc. We do have state-funded general assistance medical services, and our statutes dealing with medical and financial assistance do apply to those services. See, for example, Connecticut General Statutes section 17b-93 through 17b-95 relating to recovery and reimbursement. We also have state-funded care in state psychiatric institutions that are subject to reimbursement.
Have You Seen Creative Uses of Charitable Remainder Trusts and SNT Receptacle Trusts? No.
Do you have a pooled trust in your state? Yes, Planned Lifetime Asisistance Network of Connecticut (PLAN of Connecticut) runs a pooled trust (recently established).
Social Security Rules:
When a third party (such as a parent or other individual) funds a trust for another person (the "beneficiary") with the third party’s funds, what special rules does your SSA region have on:
Distribution terms: None, so far as I know.
Accounting/Reports/Notices: Unknown (I do not practice before the Social Security Administration to any great degree).
Housing: So far as I know follows the POMS.
Remainder Beneficiaries: None to my knowledge.
When an individual funds a trust with his or her own funds, using the authority provided under 42 U.S.C 1396p(d)(4)(A), what special rules does your SSA region have on:
Distribution terms: None to my knowledge.
Accounting/Reports/Notices: Trusts have qualified with no accountings required.
Housing: None to my knowledge.
Remainder Beneficiaries: The SSA incorrectly takes the view, under the POMS, that Connecticut would "merge" the interests and make the trust revocable, if the trust remainder were distributable to the beneficiary's heirs at law. However, a trust that simply enumerates those persons appears to qualify.
Are you aware of specific issues regarding housing (purchase, maintenance, utilities, gifts of housing, rentals) that have raised questions or caused problems with your state agencies or SSA office? No, other than as noted above, group homes are paid through a state program that does not recognize (d)(4)(A) trusts, which may cause permanent disqualifiation from such benefits.
Are you aware of certain types of distributions that are likely to raise questions or cause problems with one of your state agencies or SSA office?
Distributions to pay family member travel expenses, or to pay compensation to family member fiduciaries, raise concerns.
* SSA may not be involved if the individual is not on SSI. But watch out for the DAC, Pickle Plan, and other programs, where individuals on SSI suddenly switch programs when a parent dies, becomes disabled, or retires.
When a third party (such as a parent or other individual) funds a trust for another person (the "beneficiary") with the third party’s funds, what Medicaid related considerations are involved?
Distribution terms: Trust must NOT state or imply that it is for the beneficiary's "general or medical support." It is advisable to mention special needs, to give the trustee sole, absolute and uncontrolled discretion, and to include spendthrift provisions.
Remainder Beneficiaries: None
When an individual funds a trust with his or her own funds, using the authority provided under 42 U.S.C 1396p(d)(4)(A), what Medicaid related considerations are involved?
Distribution terms: Be careful not to suggest distributions that might also benefit persons other than the grantor/beneficiary, e.g., do not specifically authorize paying for a companion's travel expenses.
Accounting/Reports/Notices: No explicit requirements -- subject to probate court jurisdiction, so it is case-by-case what the court will require and Attorney General's office will demand. If a trust is large, e.g. proceeds of a major settlement, the State will probably insist on annual accountings, an approved list of expenditures, etc. For smaller trusts, there may be total disregard of expenditures.
Housing: Note that under the Parkhurst and Henebery cases, any attempt to suggest that a (d)(4)(A) trust can be immune from claims of creditors, or can be exempt from other benefit programs besides Medicaid, may be prohibited; although one ought to be able to address this by saying "to the extent permitted by law."
Remainder Beneficiaries: The requirement of a payback is sufficient, PRIOR to paying for funeral/administration expenses; there is no requirement that the State be named as remainder beneficiary.
Department of Mental Health and Mental Retardation Rules:
When a third party (such as a parent or other individual) funds a trust for another person (the "beneficiary") with the third party’s funds, what requirements does the Department of Mental Health and Mental Retardation have for:
Distribution terms: No difference. (NOTE that until recently, DMR/DMHAS simply tracked Medicaid rules silently, despite the issue with state funds for room and board noted above).
Remainder Beneficiaries: None.
Are third-party trusts liable for services provided by State Schools or State Hospitals? No, provided they meet the requirements described in case law as not being "support" trusts.
How does the State Mental health, Mental retardation agency treat self-settled trusts? As noted above, if issue is raised as was the case with state funds for room and board in group homes, the State has been emphatic that (d)(4)(A) trusts are ONLY excluded and their creation permitted, with respect to Medicaid-funded programs, and that for all other programs they would be counted. However, when as a practical matter state programs simply follow Medicaid eligibility as a criterion (which seems to be the case for any grants awarded through the Department of Mental Retardation) this issue is not pursued. Note that our Department of Mental Retardation has internal rules that are quite unknown even to specialist attorneys. Also note that Department of Mental Retardation deals with those of IQ 70 or below, Department of Mental Health and Addiction Services deals with mental illness services.
State Reporters are not sponsored nor endorsed by NAMI, but have volunteered to provide information. Many of the State Reporters are members of the National Academy of Elder Law Attorneys (NAELA) and the American Bar Association. Several are members of ACTEC (the American College of Trust and Estate Counsel). Many have children and other family members with disabilities. Most have been selected by other attorneys involved with this project, because of their recognized long-term involvement with special needs trusts.
NAMI does not, however, certify all information provided here is accurate. Further, the State Reporters do not certify that information provided by others is accurate. As for the State-specific information, each State Reporter has agreed to provide reasonable updates of information that they believe to be accurate.
Also, there is no coverage here of federal laws, veterans administrations rules, Section 8 housing rules, special education, or special county rules.