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Special Needs Trusts: Planning, Drafting, and Administration

Understand complicated special needs trust issues and public benefit laws affecting persons with disabilities with the first book to completely cover this rapidly expanding field.

“ ...planners across the country may well find it an indispensable tool for navigating the intricate requirements for drafting the proper SNT. ”
Academy of Special Needs Planners

Understand complicated special needs trust issues and public benefit laws affecting persons with disabilities with the first book to completely cover this rapidly expanding field.

  • Public benefits primer including SSI and Medicare, as well as an analysis of Medicaid program expansion under the Affordable Care Act
  • Establishing Medicare set-aside arrangements (MSAs)
  • Required and recommended first- and third-party special needs trust provisions
  • Considering special needs trust alternatives
  • Pooled special needs trusts with a full description of every California pooled trust
  • Special needs trusts administration and appropriate distributions
  • Special needs trusts taxation, accounting, termination, purchase of a home, and hiring of caregivers
  • Qualified settlement funds
  • Complete form first- and third-party special needs trusts
OnLAW ES94740

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Print ES33740

2 looseleaf volumes, updated 6/18

 

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“ ...planners across the country may well find it an indispensable tool for navigating the intricate requirements for drafting the proper SNT. ”
Academy of Special Needs Planners

Understand complicated special needs trust issues and public benefit laws affecting persons with disabilities with the first book to completely cover this rapidly expanding field.

  • Public benefits primer including SSI and Medicare, as well as an analysis of Medicaid program expansion under the Affordable Care Act
  • Establishing Medicare set-aside arrangements (MSAs)
  • Required and recommended first- and third-party special needs trust provisions
  • Considering special needs trust alternatives
  • Pooled special needs trusts with a full description of every California pooled trust
  • Special needs trusts administration and appropriate distributions
  • Special needs trusts taxation, accounting, termination, purchase of a home, and hiring of caregivers
  • Qualified settlement funds
  • Complete form first- and third-party special needs trusts

Selected Developments

June 2018 Update

As detailed in last year’s update, a person with a disability no longer has to have a parent or grandparent in order to establish the trust, or go to court and hope that a judge will establish it. Instead, he or she can establish it for him- or herself. See 21st Century Cures Act (Pub L 114–255, 130 Stat 1033). Although the California Department of Health Care Services stated that it would update its Medi-Cal Eligibility Procedures Manual to reflect this significant development (see ACWD Letter No. 17–13 (Apr. 14, 2017)), as of April 2018 the Manual remains unchanged. See chaps 8, 9, 11, 12, 15, and 18.

Mere gifts to certain individuals, including the drafting attorney, are no longer the only transfer to which a presumption of undue influence will attach. Transfers for unfair or inadequate consideration, known as donative transfers, subject the donee to the evidentiary presumption. See §§2.37, 2.41, and 2.65.

All inflation-adjusted figures have been updated throughout the practice guide. In 2018, the monthly SSI/SSP benefit is $910.72 for an individual ($967.23 if blind) and $1532.14 for a couple ($1751 if blind). ACWD Letter No.17–39 (Dec. 29, 2017). See, e.g., §§4.9, 4.11, and 4.21.

An Achieving a Better Life Experience (ABLE) account will soon be available in California, and recent legislation makes the accounts available for out-of-state beneficiaries and exempts up to $100,000 from enforcement of money judgments. See §5.6A. The special needs trust planning flowcharts have been updated and now include information on ABLE accounts and the 21st Century Cures Act (Pub L 114–255, 130 Stat 1033). See §§8.22–25.

If all beneficiaries of an irrevocable trust consent, they may petition a court for modification or termination of the trust. A court may modify or terminate the trust if continuance of the trust is necessary to carry out a material purpose of the trust, so long as the court, in its discretion, determines that the reason for doing so outweighs the interest in accomplishing a material purpose of the trust. Even if the trust is subject to a spendthrift clause, the trust may be terminated if the court determines there is good cause to do so. Previously, if an irrevocable trust contained a spendthrift clause it could not be terminated by a court. See §§8.49, 8.52, 9.19, 10.12, and 17.4.

Chapter 13 has been extensively revised to conform to changes created by the Tax Cuts and Jobs Act (Pub L 115–97, 131 Stat 2054), signed into law on December 22, 2017. The law has sweeping changes relating to income taxes, and has also affected the estate, gift, and GST by an increase in the applicable exemption amount (AEA) to $11.18 million for the year 2018, subject to adjustment for inflation through 2025. The AEA will revert back to $5 million (adjusted for post-2011 inflation) after 2025. These changes also include reconfiguring the kiddie tax and the income tax brackets for trusts and estates.

The complete trusts in chap 18 have been revised.

1

Introduction to Planning for Persons With Disabilities

Scott A. Harshman

Gordon A. Schaller

  • I.  INTRODUCTION TO PLANNING FOR PERSONS WITH DISABILITIES  1.1
    • A.  Effective Planning Requires Understanding of Different Areas of Law  1.2
    • B.  Benefits of Planning  1.3
    • C.  SNT Planning Not Always Required  1.4
    • D.  Planning and the Affordable Care Act  1.4A
    • E.  Special Needs Trusts  1.5
      • 1.  Third Party SNTs  1.6
      • 2.  First Party SNTs  1.7
      • 3.  Common Alternatives to SNTs  1.8
    • F.  Summary of Book’s Coverage  1.9
  • II.  UNDERSTANDING THE WORLD OF DISABILITY
    • A.  Defining Disability  1.10
    • B.  “People First” Language  1.11
    • C.  Informational Websites  1.12
      • 1.  Special Needs Attorney and Trustee Organizations  1.13
      • 2.  Internet Access to Special Needs Laws and Regulations  1.14
      • 3.  Nonprofit Associations Assisting Persons With Disabilities  1.15
      • 4.  Government Agencies Assisting Persons With Disabilities  1.16
    • D.  Commonly Used Phrases and Acronyms  1.17

2

Ethical Considerations When Planning for Persons With Disabilities

James E. Berge

  • I.  IMPORTANCE OF ETHICAL CONSIDERATIONS  2.1
  • II.  RULES OF PROFESSIONAL CONDUCT
    • A.  Sources of Authority  2.2
    • B.  Consequences of Violating Rules
      • 1.  Discipline by State Bar  2.3
      • 2.  Civil Liability for Malpractice  2.4
      • 3.  Invalidating Client’s Estate Plan  2.5
  • III.  DUTIES AND LIMITATIONS
    • A.  Duties to Client  2.6
      • 1.  Duty of Loyalty  2.7
      • 2.  Duty to Keep Client Confidences  2.8
      • 3.  Duty to Avoid Conflicts of Interest
        • a.  Avoiding Representation of Adverse Interests Generally  2.9
        • b.  Concurrent Representation of Multiple Parties  2.10
        • c.  Distinguishing Potential and Actual Conflict  2.11
        • d.  Degree of Disclosure Required  2.12
        • e.  Representing Client With Interests Adverse to Former Client  2.13
      • 4.  Duty to Client With Limited Mental Capacity  2.14
        • a.  California Law  2.15
          • (1)  Estate Planning Documents  2.16
          • (2)  Protecting Client From Abuse, Undue Influence, or Fraud  2.17
          • (3)  California State Bar Formal Opinion No. 89–112  2.18
        • b.  ABA Model Rules  2.19
      • 5.  Duty to Act Competently  2.20
      • 6.  Limitations on Gifts to Disqualified Transferees  2.20A
    • B.  Duties to Nonclient
      • 1.  No Duty to Adverse Party or if Arm’s-Length Transaction  2.21
      • 2.  Theories of Duty to Nonclient  2.22
        • a.  Intended Beneficiary  2.23
        • b.  Successor Fiduciaries  2.24
        • c.  Foreseeable Third Party Reliance  2.25
        • d.  Fiduciary Duty  2.26
      • 3.  Client’s Goals as Breach of Duty to Nonclient  2.27
  • IV.  ATTORNEY-CLIENT RELATIONSHIP
    • A.  Identifying Client  2.28
    • B.  Creation of Attorney-Client Relationship  2.29
    • C.  Representing Person With Disability  2.30
      • 1.  Ethical Compliance Assured
        • a.  Duty of Loyalty Clear  2.31
        • b.  Advising Other Family Members That Their Interests Are Unrepresented  2.32
      • 2.  Family Participation in Consultations  2.33
      • 3.  Family Members as Agents or Advisers  2.34
      • 4.  Form: Sample Paragraphs in Engagement Letter Confirming Family Member’s Role  2.35
      • 5.  Payment of Attorney Fees  2.36
    • D.  Representing Family Member  2.37
      • 1.  Obtaining Informed Written Consent of Former Client With Disability  2.38
      • 2.  Conditioning Representation on Person With Disability Having Independent Counsel  2.39
      • 3.  Providing Written Disclaimer of Representation to Person With Disability  2.40
      • 4.  Preventing Overreaching by Third Party
        • a.  Avoiding Undue Influence  2.41
        • b.  Avoiding Breach of Fiduciary Duty to Person With Disability  2.42
        • c.  Refusing Representation or Limiting Representation  2.43
      • 5.  Payment of Attorney Fee  2.44
    • E.  Representing Family Member and Person With Disability  2.45
      • 1.  Risk of Undue Influence and Breach of Ethics  2.46
      • 2.  Form: Potential Conflicts Disclosure and Waiver for Special Needs Trust Beneficiary and Trustee During Administration of Trust  2.47
    • F.  Leaving Client’s Identity Ambiguous  2.48
  • V.  DETERMINING MENTAL CAPACITY OF CLIENTS  2.49
    • A.  Standards and Tests for Legal Capacity
      • 1.  Due Process in Competence Determinations Act  2.50
        • a.  Evidence to Support Finding of Unsound Mind or Incapacity  2.51
        • b.  Ability to Communicate Decision and Understand Its Consequences  2.52
      • 2.  Specific Statutes Regarding Capacity  2.53
        • a.  Testamentary Capacity  2.54
        • b.  Capacity to Contract, Convey, or Make Agency Appointments  2.55
        • c.  Capacity to Create a Trust  2.56
        • d.  Capacity to Manage Personal and Financial Affairs and to Make Medical Decisions  2.57
    • B.  Attorney Assessment of Client Capacity
      • 1.  Evaluation Under Statutory Standards  2.58
      • 2.  Mental Status Assessment  2.59
      • 3.  Analysis of Hypothetical Situations
        • a.  Clearly Mentally Incapacitated Client  2.60
        • b.  Disputably Mentally Incapacitated Client  2.61
        • c.  Partially Incapacitated Client  2.62
      • 4.  Physical Incapacity Distinguished  2.63
  • VI.  SCOPE OF REPRESENTATION
    • A.  Importance of Defining Scope of Representation  2.64
    • B.  Certificate of Independent Review to Qualify Transfer to Disqualified Person  2.65
    • C.  Termination of Representation  2.66
  • VII.  ATTORNEY SERVING AS TRUSTEE OF SPECIAL NEEDS TRUST  2.67
    • A.  Practical Considerations
      • 1.  Interference With Practice  2.68
      • 2.  Liability to Other Members of Law Firm  2.69
      • 3.  Level of Expertise Required  2.70
    • B.  Potential Ethical and Practical Problems
      • 1.  Importance of Full Disclosure to Client  2.71
      • 2.  When Drafting Attorney May Serve as Trustee  2.72
      • 3.  Prohibition Against Dual Compensation  2.73
      • 4.  Potential for Conflicting Duties or Interests  2.74

3

Public Benefits for Persons With Disabilities

Thomas Beltran

  • I.  CHAPTER OVERVIEW  3.1
  • II.  INITIAL CONSIDERATIONS IN PLANNING FOR PUBLIC BENEFITS
    • A.  Warning  3.2
    • B.  Public Benefits Under Social Security Act  3.3
    • C.  SNT Necessary Only to Protect Needs-Based Public Benefits  3.4
    • D.  Resources on Public Benefits  3.5
  • III.  NEEDS-BASED PUBLIC BENEFITS: SUPPLEMENTAL SECURITY INCOME (SSI) AND MEDI-CAL
    • A.  Overview of SSI and Medi-Cal  3.6
    • B.  Legal Authority for SSI and Medi-Cal  3.7
    • C.  SSI Benefits
      • 1.  Amount of Benefits  3.8
      • 2.  Eligibility for SSI  3.9
        • a.  SSI Definition of Disability  3.10
        • b.  SSI Resources
          • (1)  SSI Resource Limits  3.11
          • (2)  SSI Exempt Resources  3.12
        • c.  SSI Benefits Reduced by Income
          • (1)  What Counts as Income  3.13
            • (a)  Earned Income  3.14
            • (b)  Unearned Income  3.14A
          • (2)  Reduction in SSI for In-Kind Support and Maintenance  3.15
            • (a)  Value of One-Third Reduction Rule (VTR)  3.16
            • (b)  Presumed Maximum Value Rule (PMV)  3.17
          • (3)  Income Exclusions  3.17A
        • d.  SSI Income and Resource Deeming  3.18
          • (1)  Deeming of Parent(s)’ Resources to Child  3.19
          • (2)  Deeming Income of Parent(s) to Child  3.20
        • e.  Citizenship Requirement
          • (1)  Noncitizen Eligibility  3.21
          • (2)  Cash Assistance Program for Immigrants (CAPI)  3.22
      • 3.  SSI Transfer Penalties  3.23
        • a.  Penalty for Individual Receiving SSI When Assets Are Given Away  3.24
        • b.  Exceptions From SSI Transfer Penalties
          • (1)  Transfer of Home to Spouse, Child, or Sibling  3.25
          • (2)  Transfers to (or for Benefit of) Spouse, Disabled Child, and Trusts for Persons With Disabilities Under 65  3.26
          • (3)  Transfer of Exempt Resources  3.27
        • c.  SSI Trust Rules
          • (1)  Effect on SSI When Transferring Assets to Trust  3.28
          • (2)  First Party SNT Exception to Disqualifying Trust Transfer Rules  3.29
        • d.  Exception For Returned Resources  3.29A
          • (1)  Resource Returned in Same Month  3.29B
          • (2)  Resource Returned in Subsequent Month  3.29C
          • (3)  Less Than the Entire Resource Returned  3.29D
      • 4.  Representative Payee  3.30
        • a.  When a Representative Payee Is Required  3.30A
        • b.  Selecting the Appropriate Representative Payee  3.30B
        • c.  Representative Payee’s Use of Funds  3.30C
        • d.  Representative Payee’s Reporting and Accounting Requirements  3.30D
        • e.  Remedies and Penalties Against Representative Payee  3.30E
      • 5.  Notification to Social Security Administration if Change in Circumstances  3.31
      • 6.  Form: Letter to SSA Notifying of Receipt of Assets and Funding of (d)(4)(A) SNT  3.32
      • 7.  Representation of Individuals Before the SSA  3.32A
      • 8.  Appeals Process  3.33
        • a.  Timing of Appeal  3.33A
        • b.  Receiving Benefits While Appeal Pending  3.33B
        • c.  Responding to SSA Requests for Information  3.33C
        • d.  Request for Reconsideration  3.33D
        • e.  Request for Hearing  3.33E
        • f.  Request to Appeals Council for Review of Hearing  3.33F
        • g.  Federal Court Review  3.33G
        • h.  Fees in Representing Person Before SSA  3.33H
          • (1)  Fee Petition Process  3.33I
          • (2)  Fee Agreement Process  3.33J
      • 9.  Working While on SSI  3.34
        • a.  Impairment Related Work Expenses  3.35
        • b.  Ticket to Work Program  3.36
        • c.  Section 1619(a) and (b) Work Program  3.37
        • d.  Plan for Achieving Self-Support (PASS)  3.38
    • D.  Medicaid (Medi-Cal in California)  3.39
      • 1.  Medi-Cal Coverage: Mandatory and Optional Services  3.40
      • 2.  Combined Medicare and Medi-Cal Coverage  3.41
      • 3.  Types of Medi-Cal Eligibility  3.42
        • a.  Categorically Needy Individuals  3.43
        • b.  Other Traditional Medi-Cal Eligibility Programs
          • (1)  Aged and Disabled Federal Poverty Level Program; Federal Poverty Level for the Blind  3.44
          • (2)  Aged, Blind, and Disabled Medically Needy Program (Share-of-Cost Medi-Cal)  3.45
          • (3)  250 Percent Working Disabled Program  3.46
          • (4)  Institutional Deeming Waiver  3.47
          • (5)  Nursing Facility/Acute Hospital Waiver  3.47A
          • (6)  Transitional Medi-Cal and Other Continued Medi-Cal Eligibility  3.48
            • (a)  Transitional Coverage for People Who Have Lost Cash Assistance  3.49
            • (b)  Pickle Amendment: Continuing Medi-Cal Coverage on Loss of SSI  3.50
            • (c)  Continuous Eligibility for Children  3.51
            • (d)  Medi-Cal Coverage Continues Until Negative Redetermination (Craig v Bontá)  3.52
        • c.  Expanded Medi-Cal  3.52A
      • 4.  Medi-Cal Financial Eligibility Limits and Exemptions  3.53
        • a.  Assets  3.54
          • (1)  Property Distinguished From Income  3.55
          • (2)  Traditional Medi-Cal Exempt Assets  3.56
          • (3)  Unavailable Assets  3.57
        • b.  Medi-Cal Income Rules
          • (1)  Expanded Medi-Cal  3.57A
          • (2)  Share of Cost Medi-Cal  3.58
          • (3)  Income Counted  3.59
          • (4)  Lump Sums  3.60
          • (5)  Periodic Receipts  3.61
          • (6)  Permitted Deductions From Income  3.62
          • (7)  Medical Expenses  3.63
      • 5.  Citizenship Requirements
        • a.  Proof of Citizenship for U.S. Citizens  3.64
        • b.  Noncitizen Eligibility for Medi-Cal  3.65
      • 6.  Transfer Penalties Applicable to Traditional Medi-Cal Long-Term-Care Coverage  3.66
        • a.  Exceptions to Traditional Medi-Cal Transfer Penalties
          • (1)  Transfer of Home to Spouse, Child, or Sibling  3.67
          • (2)  Transfers to (or for Benefit of) Spouse, or Child With Disability, or to Trusts for Persons With Disabilities Under Age 65  3.68
            • (a)  Narrow Interpretation of “Sole Benefit of Spouse”  3.69
            • (b)  Exempt Transfers to Trusts for Applicant’s Blind or Disabled Child and Trusts for Persons With Disabilities Under Age 65  3.70
          • (3)  Transfer of Exempt Assets  3.71
          • (4)  Undue Hardship  3.72
        • b.  Effect on Traditional Medi-Cal When Establishing a Trust Funded With One’s Own Assets  3.73
          • (1)  First Party SNT Exception to Disqualifying Trust Transfer Rules  3.74
          • (2)  California Transfer to Trust Rules  3.75
            • (a)  Medicaid Qualifying Trusts  3.76
            • (b)  OBRA 1993 Trusts  3.77
            • (c)  Exempt Trusts: First Party and Third Party SNTs  3.78
      • 7.  Recovery for Payments to Both Traditional and Expanded Medi-Cal Recipients  3.79
        • a.  Estate Property Subject to Recovery  3.80
          • (1)  Life Estate  3.80A
          • (2)  Annuities  3.80B
          • (3)  Life Insurance and Retirement Accounts  3.80C
          • (4)  Tangible Personal Property and “Other Arrangements”  3.80D
        • b.  Recovery Barred
          • (1)  Unless Beneficiary Was 55 or Older or Permanently Institutionalized  3.81
          • (2)  When There Is a Surviving Spouse  3.81A
          • (3)  When There Are Minor, Blind, or Disabled Surviving Children  3.81B
          • (4)  Procedure for Claiming Exemption From Recovery Based on Age or Disability  3.81C
          • (5)  Disability Determination  3.81D
        • c.  Limitations Period for Medi-Cal Recovery Claims  3.82
  • IV.  ENTITLEMENT PUBLIC BENEFITS: SOCIAL SECURITY, SOCIAL SECURITY DISABILITY INSURANCE, AND MEDICARE  3.83
    • A.  Social Security Retirement Benefits  3.84
    • B.  Social Security Disability Insurance  3.85
      • 1.  Applying for SSDI  3.86
      • 2.  Qualifying for SSDI  3.87
        • a.  Substantial Gainful Activity  3.88
        • b.  Severe Impairment  3.89
        • c.  Impairment Meets or Exceeds Listing  3.90
        • d.  Inability to Perform Past Work  3.91
        • e.  Performing Other Jobs  3.92
      • 3.  SSDI Recipient May Still Be Eligible for SSI and Other Public Benefits  3.93
      • 4.  SSDI Recipient Eligible for Medicare  3.94
      • 5.  SSDI Work Incentive—Trial Work Period  3.95
      • 6.  Monthly Cash Payments to Childhood Disability Beneficiary (Formerly Disabled Adult Child)  3.96
    • C.  Social Security Family Member and Survivor’s Benefits  3.97
    • D.  Medicare  3.98
      • 1.  Medicare Eligibility
        • a.  Automatic Medicare Eligibility  3.99
        • b.  Voluntary Medicare Eligibility  3.100
      • 2.  Premiums  3.101
    • E.  Medicare/Medi-Cal Dual Eligibles (Medi-Medis)
      • 1.  Overview and Definition of Dual Eligibles  3.102
      • 2.  Overview of Part D for Dual Eligibles  3.103
  • V.  PUBLIC BENEFITS FOR INDEPENDENT LIVING: GOVERNMENT HOUSING ASSISTANCE AND IN-HOME SUPPORTIVE SERVICES
    • A.  Housing Crisis for Persons With Disabilities  3.104
    • B.  Types of Government Housing Assistance for Persons With Disabilities  3.105
    • C.  Section 8 Voucher Program
      • 1.  Overview of Section 8 Voucher Program  3.106
      • 2.  Administration of Section 8  3.107
      • 3.  Application for Section 8 Voucher; Waiting Lists  3.108
      • 4.  Special Section 8 Programs for Persons with Disabilities
        • a.  Special Set-Aside Voucher  3.109
        • b.  Reasonable Accommodation  3.110
      • 5.  Paying Rent  3.111
      • 6.  Section 8 Financial Eligibility Requirements
        • a.  Income  3.112
        • b.  Assets  3.113
        • c.  Penalties for Disposal of Assets for Less Than Fair Market Value  3.114
      • 7.  Section 8 and Special Needs Trusts  3.115
        • a.  Effect on Section 8 When Establishing First Party SNT  3.116
        • b.  Effect on Section 8 Benefits When Distributions Are Made From SNT  3.117
    • D.  Overview of In-Home Supportive Services (IHSS)  3.118
      • 1.  Sources of Law  3.119
      • 2.  Programs and Administration  3.120
      • 3.  IHSS Plus Waiver  3.121
      • 4.  IHSS Plus Option  3.121A
      • 5.  Certification Requirement  3.121B
      • 6.  Eligibility  3.122
      • 7.  Share of Cost  3.122A
      • 8.  Limitation on Eligibility: Consideration of Alternative Resources  3.123
      • 9.  Services Provided  3.124
      • 10.  Role of SNTs in Closing the Gap in Unmet Need  3.124A
      • 11.  Service Providers  3.125
      • 12.  Application and Appeals Procedure  3.126
      • 13.  Residual Program Gifting Penalties  3.127
      • 14.  Exceptions From Residual Program Gifting Penalties  3.128
      • 15.  No Estate Recovery for IHSS Services  3.129
  • VI.  OTHER PUBLIC BENEFIT PROGRAMS FOR INDIVIDUALS WITH DISABILITIES  3.130
    • A.  Services for Developmentally Disabled (Lanterman Act)  3.131
      • 1.  Definition of Developmental Disability  3.132
      • 2.  Limited Conservatorship  3.133
      • 3.  Relationship Between DDS and Regional Centers  3.134
      • 4.  Regional Center Eligibility  3.135
      • 5.  Regional Center Services
        • a.  Original Statutory Framework  3.136
        • b.  Reductions in Services for Regional Center Consumers Beginning in 2009  3.136A
        • c.  Individual Program Plan (IPP)  3.137
        • d.  Housing Options  3.138
        • e.  Regional Center Consent to Medical Procedures  3.139
      • 6.  Confidentiality of Regional Center Information and Records  3.140
      • 7.  Parents’ Co-Payment for Regional Center Services  3.141
      • 8.  Regional Center Evaluations in Juvenile Justice System  3.141A
      • 9.  Diversion of Defendants With Cognitive Developmental Disabilities  3.141B
      • 10.  Sheltering SNT Assets From Regional Centers  3.142
    • B.  Veterans’ Benefits
      • 1.  Availability of Veterans’ Benefits  3.143
        • a.  Service-Connected Disability Compensation  3.143A
        • b.  Non-Service-Connected Disability Pension  3.143B
        • c.  Relation Between VA Pension and Medi-Cal Long-Term-Care Benefits  3.143C
        • d.  Relationship Between VA Pension and Special Needs Trusts  3.143D
      • 2.  VA Medical Benefits  3.144
      • 3.  Other Federal VA Benefits  3.145
      • 4.  California VA Benefits  3.146
    • C.  Other Programs Available to Persons With Disabilities
      • 1.  CalWORKs  3.147
        • a.  Legal Resources  3.148
        • b.  Benefits Provided  3.149
        • c.  Eligibility Requirements  3.150
      • 2.  “Healthy Families” Medical Insurance Program  3.151
      • 3.  California Major Risk Medical Insurance Program  3.152
    • D.  Special Education
      • 1.  Individuals With Disabilities Education Act (IDEA)  3.153
      • 2.  California Early Intervention Services Act  3.154
    • E.  Food Stamp Programs (CalFresh)  3.155

4

Family Law Issues in Planning for Persons With Disabilities

Ruth E. Ratzlaff

Christopher M. Moore

Gene L. Osofsky

  • I.  OVERVIEW  4.1
  • II.  SNT BENEFICIARY’S MARRIAGE, DIVORCE, OR DOMESTIC PARTNERSHIP
    • A.  Capacity to Marry, Divorce, or Seek Legal Separation, or to Enter or Dissolve Registered Domestic Partnership  4.2
      • 1.  May Marry or Enter Into a Domestic Partnership While Conserved  4.3
      • 2.  May Divorce or Terminate a Domestic Partnership While Conserved  4.4
    • B.  Effect of SNT Beneficiary’s Marriage and Divorce on Public Benefits  4.5
      • 1.  Definition of Marriage for Public Benefit Eligibility Purposes  4.6
      • 2.  Registered Domestic Partners Not Married for Public Benefit Purposes  4.7
      • 3.  Medi-Cal’s Treatment of Registered Domestic Partners  4.8
      • 4.  Effect on SSI of Marriage Between Two SSI-Eligible Individuals  4.9
        • a.  Eligible Couple Resource Limits  4.10
        • b.  Eligible Couple Income Limits  4.11
          • (1)  Treatment of Unearned Income  4.12
          • (2)  Treatment of Earned Income  4.13
      • 5.  Effect on SSI of Marriage With SSI-Ineligible Spouse  4.14
        • a.  Spousal Deeming of Resources  4.15
        • b.  Spousal Deeming of Income  4.16
      • 6.  Divorce, Annulment, or Separation  4.17
        • a.  Effect of Receipt of Marital Property or Spousal Support on SSI and Traditional Medi-Cal Benefits  4.18
          • (1)  Effect of Property Division on Recipients' Benefits  4.19
          • (2)  Effect of Spousal Support on Recipients’ Benefits  4.20
        • b.  Effect of Child Support on SSI for the Child  4.21
        • c.  Establishing and Funding a First Party SNT During Divorce  4.22
          • (1)  Establishing the SNT  4.23
            • (a)  During Division of Marital Property  4.24
            • (b)  During Award of Spousal Support  4.25
            • (c)  During Award of Child Support  4.26
          • (2)  Funding the First Party SNT
            • (a)  Funding With Marital Property or Spousal Support Payments  4.27
            • (b)  Funding With Child Support
              • (i)  Is an SNT Needed?  4.28
              • (ii)  Funding the SNT  4.29
              • (iii)  A Checklist  4.30
        • d.  Third Party SNT Funded During Divorce  4.31
  • III.  CHARACTERIZATION OF SNT PROPERTY  4.32
    • A.  General Characterization Rules  4.33
    • B.  Establishing First Party SNT Using Community Property  4.34
    • C.  Receiving Consent of Spouse or Registered Domestic Partner Who Lacks Capacity to Transfer Assets to First Party SNT  4.35
    • D.  Personal Injury Lawsuit Assets Are Community Property  4.36
    • E.  Transmuting Community Property to Separate Property  4.37
      • 1.  Reimbursement to Separate Property  4.38
      • 2.  Reimbursement to Community Property  4.39
    • F.  Form: Transmutation Agreement  4.40
  • IV.  SUPPORT PAYMENTS  4.41
    • A.  Child Support for Minor or Incapacitated Adult Child  4.42
      • 1.  Duty to Support Minor or Adult Children  4.43
      • 2.  Duty to Support Incapacitated Adult Children  4.44
    • B.  Calculation of Child Support Payment Amount  4.45
      • 1.  When Parent Is Beneficiary of SNT  4.46
      • 2.  When Child Is Beneficiary of SNT  4.47
    • C.  Calculation of Spousal and Domestic Partner Support Payment Amounts  4.48
      • 1.  Temporary Support  4.49
      • 2.  Long-Term Support  4.50
    • D.  Receipt of Support Payments by First Party SNT  4.51
    • E.  Receipt of Support Payments by Third Party SNT  4.52
    • F.  Payment of Support Payments From First Party SNT
      • 1.  Legal Obligation to Pay Support From First Party SNT Created for Parent  4.53
      • 2.  Paying Support From First Party SNT May Violate “Sole Benefit” Rule  4.54
    • G.  Payment of Support From Third Party SNT  4.55

5

Estate Planning for Persons With Disabilities

Linda S. Durston

  • I.  INTRODUCTION  5.1
  • II.  IMPORTANCE OF PLANNING  5.2
  • III.  AVAILABLE ESTATE PLANNING OPTIONS  5.3
    • A.  Direct Bequest  5.4
    • B.  Disinheritance  5.5
    • C.  Leaving Assets to Others With Promise to Care for Person With Disability  5.6
    • D.  ABLE Act Account  5.6A
    • E.  Support Trust  5.7
    • F.  Third Party SNT  5.8
      • 1.  Legal Requirements  5.9
        • a.  SSI Requirements  5.10
        • b.  Medi-Cal Requirements  5.11
      • 2.  Third Party Pooled SNT  5.12
  • IV.  INFORMATION NEEDED TO BEGIN PLANNING PROCESS
    • A.  Gathering Needed Information  5.13
    • B.  Form: Special Needs Planning Intake Form  5.14
  • V.  CREATING THIRD PARTY SNT TO ACHIEVE PLANNING GOALS  5.15
    • A.  Types of Third Party SNTs
      • 1.  Inter Vivos or Testamentary  5.16
      • 2.  Stand-Alone Third Party SNT  5.17
    • B.  Third Party SNT for Spouse  5.18
    • C.  Multiple Beneficiaries  5.19
    • D.  Coordination With Other Family Members
      • 1.  Need for Coordination  5.20
      • 2.  Form: Coordination With Other Family Members  5.21
    • E.  Potential State Recovery for Care Provided to Person With Disability  5.22
      • 1.  Exemption From State Recovery for Qualified Third Party SNT  5.23
      • 2.  Potential State Recovery Against Parental or Spousal Estate for Benefits Provided to Person With Disability  5.24
  • VI.  ESTABLISHING SYSTEM OF ONGOING MAINTENANCE  5.25
  • VII.  MEMORANDUM OF INTENT
    • A.  Purpose of Memorandum of Intent  5.26
    • B.  Form: Guidelines to Parents for Writing Memorandum of Intent  5.27
  • VIII.  ESTATE PLANNING FOR CLIENTS WITH DISABILITIES  5.28

6

Common Provisions in Third Party Special Needs Trusts

Allan A. Senkow

Nancy Kaupp Ewin

  • I.  INTRODUCTION TO DRAFTING THIRD PARTY SNTS  6.1
  • II.  TYPES OF THIRD PARTY SNTS
    • A.  Advantages and Disadvantages of Revocable Inter Vivos SNT  6.2
      • 1.  Form: Revocability of SNT  6.3
      • 2.  Form: Irrevocability of SNT  6.4
    • B.  Sole Beneficiary or Multiple Beneficiaries  6.5
    • C.  Form: Provisions for Multiple Beneficiaries of Third Party SNT  6.6
  • III.  INTRODUCTORY PROVISIONS
    • A.  Essential Elements of Trust  6.7
    • B.  Form: Introductory Provisions  6.8
  • IV.  INTENT AND FUNDING PROVISIONS
    • A.  Trust Intent  6.9
      • 1.  Form: Trust Purpose  6.10
      • 2.  Form: Effect on Public Benefits if No Trust  6.11
      • 3.  Form: Settlor’s General Philosophy  6.12
      • 4.  Form: Use of Memorandum of Intent  6.13
    • B.  Funding the Trust  6.14
      • 1.  Form: Funding the Trust  6.15
      • 2.  Form: Acceptance of Property by Trustee  6.16
      • 3.  Form: No Commingling of Property  6.17
  • V.  DISTRIBUTION PROVISIONS
    • A.  Distribution Standard  6.18
    • B.  Distribution Provisions
      • 1.  Form: Trustee’s Sole and Absolute Distribution Discretion  6.19
      • 2.  Form: Distributions of Income and Principal  6.20
      • 3.  Form: Distribution Guidelines  6.21
      • 4.  Form: Distributions Shall Be Supplemental and in Beneficiary’s Best Interest  6.22
      • 5.  Form: Trustee’s Authority to Refuse Distribution Requests  6.23
  • VI.  CARE MANAGEMENT PROVISIONS
    • A.  Care Manager Provisions  6.24
    • B.  Form: Care Manager  6.25
    • C.  Form: Role of Care Manager  6.26
    • D.  Form: Compensation of Care Manager  6.27
    • E.  Form: Resignation of Care Manager  6.28
  • VII.  SNT MANAGEMENT TEAM
    • A.  Importance of SNT Management Team  6.29
    • B.  Selecting SNT Management Team
      • 1.  Trustee  6.30
      • 2.  Form: Trustee Provisions  6.31
      • 3.  Form: Trustee Resignation, Removal, and Replacement  6.32
      • 4.  Form: Successor Trustee Powers and Liabilities  6.33
      • 5.  Trust Advisory Committee  6.34
      • 6.  Form: Trust Advisory Committee  6.35
      • 7.  Function of Trust Protector  6.36
        • a.  Considering Trust Protector  6.37
        • b.  Defining Role of Trust Protector  6.38
        • c.  Powers of Trust Protector  6.39
        • d.  Selection of Trust Protector  6.40
        • e.  Additional Trust Protector Provisions  6.41
      • 8.  Form: Trust Protector  6.42
  • VIII.  TERMINATION PROVISIONS
    • A.  Types of SNT Termination  6.43
    • B.  Termination at Beneficiary’s Death
      • 1.  Termination if Beneficiary Dies  6.44
      • 2.  Form: Termination on Beneficiary’s Death  6.45
    • C.  Termination After Loss of Benefits
      • 1.  Beneficiary Ineligible for Public Benefits  6.46
      • 2.  Form: Termination if Beneficiary Ineligible for Benefits  6.47
    • D.  Termination on Loss of Disability
      • 1.  Termination if Beneficiary Is No Longer Disabled  6.48
      • 2.  Form: Termination on Substantial Gainful Employment  6.49
    • E.  Termination if Court Orders Payment From SNT
      • 1.  Termination if Court Orders Reimbursement  6.50
      • 2.  Form: Termination if Court Orders Reimbursement  6.51
    • F.  Termination if SNT Assets Are Small
      • 1.  Corpus Is Small  6.52
      • 2.  Form: Termination When Trust Corpus Is Small  6.53
    • G.  Disposition of Remaining Assets After Termination  6.54
      • 1.  Disposition of Assets After Beneficiary’s Death  6.55
        • a.  Form: Outright Distribution  6.56
        • b.  Using Powers of Appointment in Third Party SNT  6.57
        • c.  Form: Special Power of Appointment  6.58
      • 2.  Disposition of Assets if Beneficiary Is Alive  6.59
      • 3.  Form: Disposition if SNT Beneficiary Is Still Alive  6.60
      • 4.  Remote Contingency Distribution  6.61
      • 5.  Form: Remote Contingency Distribution  6.62
      • 6.  Provisions to Avoid Disposition to Minors or Public Benefit Recipients  6.63
        • a.  Form: Alternative Distributions for Minors  6.64
        • b.  Form: Alternative Distributions for Persons Eligible for Needs-Based Public Benefits  6.65
    • H.  Payment of Debts, Taxes, and Funeral Expenses  6.66
      • 1.  Form: Payment of Taxes and Other Debts  6.67
      • 2.  Form: Payment of Funeral Expenses  6.68
  • IX.  PARTICULAR SNT PROVISIONS
    • A.  Regional Center Protection
      • 1.  Drafting to Preserve Regional Center Benefits  6.69
      • 2.  Form: Sheltering Assets From Regional Center Consideration  6.70
    • B.  Defining Special Needs
      • 1.  Overview  6.71
      • 2.  Form: Special Needs Definition  6.72
    • C.  SNT Creditor Protection
      • 1.  Third Party SNT Provisions to Protect Trust Assets  6.73
      • 2.  Form: Spendthrift Clause  6.74
    • D.  Trustee’s Responsibility for Beneficiary’s Public Benefits
      • 1.  Overview  6.75
      • 2.  Form: Trustee Cooperation in Seeking Public Benefits  6.76
    • E.  Paying Professional Fees
      • 1.  Overview  6.77
      • 2.  Form: Professional Fees  6.78

7

Funding Third Party Special Needs Trusts

Diedre Wachbrit Braverman

  • I.  INTRODUCTION TO FUNDING THIRD PARTY SPECIAL NEEDS TRUSTS  7.1
    • A.  Assistance of Financial Planner in Funding Decision  7.2
    • B.  Other Available Resources for Funding  7.3
  • II.  HOW MUCH TO FUND  7.4
    • A.  Availability of Private Support: Small and Large Estates  7.5
    • B.  Estimating Costs of Future Services and Living Expenses  7.6
      • 1.  Estimating Future Costs of Person With Disability  7.7
        • a.  Types of Future Costs That Should Be Considered  7.8
        • b.  Online Financial Calculators for Estimating Third Party SNT Funding Amounts  7.9
      • 2.  Factoring Rates of Return and Inflation for Sustainable Distribution Rate  7.10
      • 3.  Estimating Benefits Available From Public Agencies  7.11
        • a.  Supplemental Security Income (SSI) Monthly Benefit  7.12
        • b.  Social Security Retirement Benefit  7.13
        • c.  Person With Disability’s Income and Assets  7.14
        • d.  Medi-Cal Eligibility  7.15
      • 4.  Beneficiaries With Few Needs  7.16
    • C.  Inherent Risks in Projections
      • 1.  Investment Risk  7.17
      • 2.  Form: Disclaimer for Attorney Assisting Client in Funding Modeling  7.18
    • D.  Misconception of Overfunding Third Party SNT  7.19
  • III.  FUNDING THIRD PARTY SNT WITH LIFE INSURANCE  7.20
    • A.  Types of Insurance  7.21
      • 1.  Term Life Insurance  7.22
        • a.  Renewable Term  7.23
        • b.  Level Term  7.24
        • c.  Decreasing Term  7.25
        • d.  Modified Term  7.26
      • 2.  Whole Life Insurance  7.27
        • a.  Limited-Pay Insurance  7.28
        • b.  Interest-Sensitive Insurance  7.29
        • c.  Blended Whole Life/Term Insurance  7.30
        • d.  Joint Lives Insurance  7.31
        • e.  Universal Life Insurance  7.32
        • f.  Variable Life Insurance  7.33
        • g.  Variable/Universal Life Insurance  7.34
    • B.  Selecting Insurance Company  7.35
    • C.  Illustrations  7.36
      • 1.  Questions to Ask Regarding Term Insurance  7.37
      • 2.  Questions to Ask Regarding Whole Life Insurance  7.38
    • D.  Using Irrevocable Life Insurance Trust (ILIT) When Funding SNT  7.39
      • 1.  Crummey Demand Right  7.40
      • 2.  Effect of Crummey Demand Right on SSI Recipient  7.41
        • a.  Income Considerations  7.42
        • b.  Resource Considerations  7.43
    • E.  Using Annuities to Fund Third Party SNT  7.44
  • IV.  GIFTING TO THIRD PARTY SNT
    • A.  Preferred Methods in Making Annual Exclusion Gifts to SNT  7.45
    • B.  Establishing Cristofani SNT  7.46
      • 1.  Tax Consequences  7.47
      • 2.  Avoiding Adverse Tax Consequences  7.48
    • C.  Having SNT Own 529 Plan  7.49
      • 1.  Amount of Gift  7.50
      • 2.  Choosing Right 529 Plan  7.51
      • 3.  Effect of Distributions From 529 Plan  7.52
  • V.  FUNDING SNT WITH RETIREMENT ASSETS  7.53
    • A.  Benefits of Retirement Plan Tax Deferral  7.54
    • B.  Required Minimum Distributions  7.55
      • 1.  Implementation in Regulations  7.56
      • 2.  Penalty for Failure to Make Required Minimum Distributions  7.57
    • C.  Importance of Naming Designated Beneficiary  7.58
      • 1.  Time Frame in Determining Designated Beneficiary  7.59
      • 2.  Naming Trust as Designated Beneficiary  7.60
        • a.  Trust Valid Under State Law  7.61
        • b.  Irrevocable Trust  7.62
        • c.  Identifiable Individual Beneficiaries  7.63
          • (1)  Identity of Oldest Beneficiary  7.64
          • (2)  Beneficiaries Are All Natural Persons  7.65
          • (3)  Counting Contingent Beneficiaries of Trust  7.66
    • D.  Types of Designated Beneficiary Trusts
      • 1.  Conduit Trust (Not Recommended for SNTs)  7.67
      • 2.  Accumulation Trust  7.68
    • E.  Drafting Issues in Naming Third Party SNT as Beneficiary of Parent’s Retirement Plan  7.69
      • 1.  Drafting SNT so All Contingent Beneficiaries Are Natural Persons  7.70
      • 2.  Drafting SNT so Oldest Beneficiary Is Person With Disability  7.71
      • 3.  Drafting Effective Power of Appointment for Person With Disability  7.72
      • 4.  Form: Power of Appointment When Making SNT Designated Beneficiary  7.73
      • 5.  Provisions for Payment of Debts, Administration Expenses, and Estate Taxes  7.73A
      • 6.  Form: Limitation on Payment of Debts and Administration Expenses  7.73B
      • 7.  Form: Limitation on Payment of Estate Tax  7.73C
    • F.  Leaving IRA to Charitable Remainder Trust  7.74
    • G.  After-Death Planning for Public Benefits Recipient Who Receives IRA Asset Outright  7.75

8

Planning Using First Party Special Needs Trusts or Alternatives

Leslie Ann Barnett

Donna R. Bashaw

Melinda Hunsaker

  • I.  INTRODUCTION TO FIRST PARTY PLANNING  8.1
  • II.  USING FIRST PARTY SNT
    • A.  When to Consider First Party SNT  8.2
      • 1.  Only Certain Public Benefits Need to Be Protected  8.3
      • 2.  Amount of Assets Received Warrants First Party SNT  8.4
        • a.  Costs and Fees of Establishing and Administering (d)(4)(A) SNT  8.5
        • b.  Costs and Fees of Joining and Administering Pooled SNT  8.6
      • 3.  Person With Disability Meets Age Requirement
        • a.  Individuals Age 65 and Over  8.7
        • b.  Minors  8.8
    • B.  Use of Structured Settlements With First Party SNTs  8.9
      • 1.  Structured Settlements  8.10
        • a.  Rated Age  8.10A
        • b.  Qualified Assignment of Annuity  8.10B
        • c.  Constructive Receipt  8.10C
        • d.  Economic Benefit Doctrine  8.10D
        • e.  Commutation Rider  8.10E
      • 2.  Structured Settlement Brokers  8.11
      • 3.  Considerations When Using Structured Settlement to Fund First Party SNT  8.12
        • a.  Alleviating Trial Attorney’s Liability Concerns  8.13
        • b.  Inflexibility  8.14
        • c.  Inflation  8.15
        • d.  No Planning for Initial SNT Disbursements  8.16
        • e.  Identifying Willing and Qualified Trustee  8.17
        • f.  Overselling of Structured Settlement’s Advantages  8.18
          • (1)  Income Tax–Free Benefit  8.19
          • (2)  Conservation of Funds  8.20
      • 4.  DRA Annuity Rules: Application to Structured Settlements  8.21
    • C.  Implementing Appropriate Planning Options  8.22
      • 1.  Form: Flowchart Implementing Planning Options for Individual Younger Than Age 18  8.23
      • 2.  Form: Flowchart Implementing Planning Options for Individual Age 18 to 64  8.24
      • 3.  Form: Flowchart Implementing Planning Options for Individual Age 65 and Over  8.25
  • III.  OTHER OPTIONS
    • A.  Keeping Assets and Losing Benefits  8.26
    • B.  Spend-Down Assets  8.27
      • 1.  Expressly Approved Spend-Down Items by DHCS  8.28
      • 2.  Prepayment for Shelter, Goods, and Services  8.29
      • 3.  Purchasing Exempt Assets  8.30
      • 4.  ABLE Accounts  8.30A
      • 5.  Spending on Home  8.31
      • 6.  Purchase of Automobile  8.32
      • 7.  Purchase of Other Exempt Assets  8.33
      • 8.  Purchase of Annuity—Current Law  8.34
      • 9.  Purchase of Annuity—Under DRA  8.34A
      • 10.  Executing Personal Service Contract
        • a.  Basics  8.35
        • b.  SSI Requirements  8.35A
        • c.  Drawbacks
          • (1)  Risks of Default  8.36
          • (2)  Tax Problems  8.37
          • (3)  Capacity  8.37A
        • d.  Drafting Issues
          • (1)  Services to Be Provided  8.38
          • (2)  Calculation of Value of Promise  8.39
    • C.  Giving Assets to Third Party  8.40
      • 1.  Gift of Inheritances, Litigation Awards, and Insurance Benefits for SSI Eligibility  8.41
      • 2.  Gift of Inheritances and Life Insurance for Traditional Medi-Cal Eligibility  8.42
      • 3.  Gift of Litigation Awards for Traditional Medi-Cal Eligibility  8.43
    • D.  Disclaiming Inheritance  8.44
    • E.  Implementing Alternative Planning Options  8.45
  • IV.  MODIFYING DISQUALIFYING INHERITANCE TRUST TO SNT  8.46
    • A.  Inheritance Trusts That Disqualify Benefits Recipient From Needs-Based Public Benefits  8.47
    • B.  Qualifying “Safe Harbor” Third Party SNT  8.48
    • C.  Procedure to Modify Disqualifying Inheritance Trust to Qualifying Third Party SNT  8.49
      • 1.  Modification Under Prob C §15409 Is Most Effective  8.50
      • 2.  Modification Also Effective Under Common Law  8.51
      • 3.  Modification Under Prob C §§15403 and 15404 Should Not Be Used  8.52
      • 4.  Small Principal Modification or Termination Under Prob C §15408 Is of Limited Use  8.53
      • 5.  Form: Petition to Modify Disqualifying Trust to Special Needs Trust  8.54

8A

Medicare Set-Aside Arrangements

Mark Popolizio

John J. Campbell

  • I.  THE BASICS
    • A.  Definition and Purpose of Medicare Set-Aside Arrangement (MSA)  8A.1
      • 1.  Medicare as Secondary Payer  8A.2
      • 2.  Brief History  8A.3
    • B.  Relevance for SNT Planners  8A.4
    • C.  Legal Resources
      • 1.  Primary Authority  8A.5
      • 2.  CMS Memorandums  8A.6
      • 3.  Other Secondary Sources  8A.7
      • 4.  Advocacy Resources  8A.8
  • II.  SETTLEMENTS THAT REQUIRE MEDICARE SET-ASIDE ARRANGEMENTS
    • A.  When to Consider an MSA  8A.9
    • B.  Notice and Reporting Requirement  8A.10
    • C.  The SMART Act of 2012  8A.10A
    • D.  Consequences of Failure to Consider Medicare’s Interest  8A.11
    • E.  Planning for Workers’ Compensation Settlements  8A.12
      • 1.  Cases Meeting MSA Threshold Requirements
        • a.  Type of Settlement  8A.13
        • b.  Other Threshold Requirements  8A.14
          • (1)  Total Settlement Amount  8A.15
          • (2)  Reasonable Expectation of Medicare Enrollment  8A.16
      • 2.  Cases Not Meeting Threshold Requirement May Still Require MSA (Nonthreshold MSAs)  8A.17
      • 3.  When MSA Not Recommended  8A.18
    • F.  Planning for Liability Settlements
      • 1.  Current Status of MSP Law  8A.19
      • 2.  CMS’s Unofficial Position  8A.20
      • 3.  Practical Suggestions for Considering Medicare’s Interest in Liability Settlements  8A.21
  • III.  DRAFTING THE MEDICARE SET-ASIDE ARRANGEMENT  8A.22
    • A.  Types of Medicare Set-Aside Arrangements  8A.23
      • 1.  Medicare Set-Aside Trusts  8A.24
      • 2.  Medicare Set-Aside Custodial Agreements  8A.25
      • 3.  Self-Administered Medicare Set-Aside Arrangements  8A.26
      • 4.  Medicare Set-Aside Arrangements for SSI and Medicaid (Medi-Cal) Recipients
        • a.  Effect of MSA on Medicaid (Medi-Cal) Eligibility  8A.27
        • b.  Establishing Medicare Set-Aside Special Needs Trust  8A.28
    • B.  MSA for Future Medical Expenses  8A.29
      • 1.  Factors to Consider  8A.30
      • 2.  Benefits Covered by Medicare
        • a.  Medical Necessity Required for Medicare-Covered Benefits  8A.31
        • b.  Types of Medicare-Covered Medical Items and Service  8A.32
          • (1)  Medicare Part A and Part B  8A.33
          • (2)  Medicare Part D  8A.34
      • 3.  Medical Items Medicare Does Not Cover  8A.35
      • 4.  Amount That MSA Must Pay for Medical Items and Services  8A.36
      • 5.  Who Should Prepare Allocation  8A.37
    • C.  The Submission Process  8A.38
  • IV.  ADMINISTERING THE MEDICARE SET-ASIDE ARRANGEMENT  8A.39
    • A.  Appropriate MSA Distributions  8A.40
    • B.  No MSA Distributions for Fees of Trustees, Custodians, Administrators, or Other Professionals  8A.41
    • C.  Investment of MSA Funds  8A.42
    • D.  Accounting Requirement  8A.43
    • E.  MSA Income Tax Treatment  8A.44
    • F.  CMS Form: Guidelines for Self-Administration of Worker’s Compensation MSA  8A.45
    • G.  CMS Form: Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA)-Account Expenditure for Lump-Sum Account  8A.46
    • H.  Termination of MSA
      • 1.  Loss of Medicare Eligibility Does Not Allow Release of MSA  8A.47
      • 2.  Death of Beneficiary  8A.48
  • V.  STEP-BY-STEP CHECKLIST FOR MSP COMPLIANCE FOR FUTURE MEDICAL EXPENSES  8A.49
  • VI.  DALLAS REGIONAL OFFICE STATEMENT  8A.50

8B

Qualified Settlement Funds

Kevin Urbatsch

  • I.  INTRODUCTION TO QUALIFIED SETTLEMENT FUNDS (QSF)  8B.1
  • II.  THE LAW GOVERNING QSFs  8B.2
    • A.  The Three Basic Requirements  8B.3
      • 1.  Approval Requirement  8B.4
      • 2.  Resolve Claims Requirement  8B.5
      • 3.  Trust or Segregated Account Requirement  8B.6
    • B.  Timing and the Relation-Back Rule  8B.7
  • III.  ESTABLISHING A QSF  8B.8
    • A.  Selecting QSF Administrator  8B.9
    • B.  Drafting QSF Trust Agreement
      • 1.  Overview  8B.10
      • 2.  Form: QSF Trust Agreement  8B.11
    • C.  Petitioning Court for Order or Approval  8B.12
      • 1.  Form: Petition to Establish QSF  8B.13
      • 2.  Form: Memorandum of Points and Authorities  8B.14
      • 3.  Form: Order Establishing QSF  8B.15
  • IV.  QSF ADMINISTRATION  8B.16
    • A.  Initial Duties  8B.17
    • B.  Managing QSF Funds  8B.18
      • 1.  Making QSF Distributions  8B.19
      • 2.  Investing QSF Assets  8B.20
    • C.  QSF Taxation  8B.21
      • 1.  Filing QSF Tax Return  8B.22
      • 2.  QSF Information Reporting and Withholding Requirements  8B.23
    • D.  QSF Termination  8B.24
  • V.  SINGLE-CLAIMANT ISSUE  8B.25

9

Required Provisions in (d)(4)(A) Special Needs Trusts

Gregory Wilcox

  • I.  OVERVIEW  9.1
    • A.  Statutory First Party SNT: A Safe Harbor  9.2
    • B.  Sources of Legal Authority for a (d)(4)(A) SNT  9.3
      • 1.  Federal Law  9.4
      • 2.  Social Security Administration Rules: The POMS  9.5
      • 3.  Federal Department of Health and Human Services: State Medicaid Manual  9.5A
      • 4.  California Regulations and Guidelines  9.6
      • 5.  Judicial Council Rules for Court-Established SNTs  9.7
  • II.  (d)(4)(A) SNT PROVISIONS REQUIRED BY STATUTE AND BENEFIT AGENCIES  9.8
    • A.  Four Core Required Provisions of a (d)(4)(A) Trust  9.9
      • 1.  Established by Authorized Person or Entity  9.10
      • 2.  Established for Person Under 65 Years of Age  9.11
      • 3.  Disabled Beneficiary  9.11A
      • 4.  Sole Benefit of SNT Beneficiary
        • a.  (d)(4)(A) “For the Benefit” Rule  9.12
        • b.  Stricter “Sole Benefit” Standard Imposed by Medicaid and SSA Transfer Rules  9.13
        • c.  SSA’s Sole Benefit Rule in Flux  9.13A
      • 5.  Form: Title and Introduction of an SNT Established by the Individual  9.14
      • 6.  Form: Title and Introduction of Parent- or Grandparent-Established SNT  9.14A
      • 7.  Form: Title and Introduction of Court-Established SNT  9.15
    • B.  For a “Disabled” Person
      • 1.  Definition  9.16
      • 2.  Form: Defining SNT Beneficiary  9.17
    • C.  Trust Must Be Irrevocable
      • 1.  Requirement  9.18
      • 2.  Form: Irrevocability of SNT  9.19
    • D.  Distributions on Trust Termination
      • 1.  Payback to State for Medicaid Benefits Received  9.20
      • 2.  Form: Payback to Medicaid  9.20A
      • 3.  Benefit to No Entity Other Than Beneficiary After Medicaid Payback if Early Termination  9.21
      • 4.  Form: Distributions on Early Termination  9.21A
      • 5.  Conflict Over Type of Expenses That May Be Paid Before Medi-Cal Payback  9.22
      • 6.  Form: Expenses to Be Paid Before Payback to Medi-Cal  9.23
    • E.  Notice Requirement to State Agencies
      • 1.  Notice to DHCS and Other State Agencies  9.24
      • 2.  Form: Notice to State Agencies  9.25
  • III.  PROVISIONS REQUIRED FOR CERTAIN COURT-FUNDED (d)(4)(A) SNTS UNDER CAL RULES OF CT 7.903
    • A.  Trusts Governed by Rule 7.903  9.26
    • B.  Rule 7.903 Required Provisions  9.27
      • 1.  Provision Stating Compliance With Rule 7.903  9.28
      • 2.  Form: Trust Meets All Rule 7.903 Requirements  9.29
      • 3.  Specific Issues
        • a.  Investment Standard  9.30
        • b.  Form: Investment Standard  9.31
        • c.  Bond  9.32
        • d.  Form: Bond  9.33
        • e.  Court Accountings  9.34
        • f.  Form: Accounting to Court  9.35
        • g.  Trustee Provisions  9.36
        • h.  Form: Trustee Resignation, Removal, and Replacement  9.37
        • i.  Compensation of Trustee, Advisory Committee Members, and Attorney  9.38
        • j.  Form: Compensation of Trustee, Advisory Committee Members, and Attorney  9.39

10

Suggested Provisions in (d)(4)(A) Special Needs Trusts

Gregory Wilcox

Kevin Urbatsch

  • I.  INTRODUCTION  10.1
  • II.  SUGGESTED PROVISIONS FOR (d)(4)(A) SNTs  10.2
    • A.  Special Needs Trust Purpose Provision  10.3
    • B.  Form: Trust Purpose  10.4
    • C.  Discretionary Distribution Provision  10.5
    • D.  Form: Distribution Provision  10.6
    • E.  Authority to Purchase Residence  10.7
    • F.  Form: Authority to Purchase Residence  10.8
    • G.  Definition of Special Needs  10.9
      • 1.  Special Needs Under the Patient Protection and Affordable Care Act (ACA)  10.9A
      • 2.  The Customary Meaning of Special Needs  10.9B
    • H.  Form: Definition of Special Needs  10.10
    • I.  Recitation of Compliance With Public Benefit Programs  10.11
    • J.  Form: Treatment of Trust by Public Benefit Programs  10.12
    • K.  Advisable Tax Provisions in a (d)(4)(A) Trust  10.13
      • 1.  Gift Tax Exposures and Solution  10.14
      • 2.  Form: Special (Limited) Power of Appointment  10.15
      • 3.  Income Tax Provisions  10.16
        • a.  (d)(4)(A) SNT as Grantor Trust  10.17
        • b.  Drafting a Grantor Trust  10.18
      • 4.  Form: Grantor Trust Provision  10.19
    • L.  Selecting a Trustee Management Team for a (d)(4)(A) SNT  10.20
    • M.  Spendthrift Provision  10.21
    • N.  Form: Spendthrift Provision  10.22
    • O.  No Trust Funding After Reaching Age 65  10.23
    • P.  Form: Asset Augmentation to SNT  10.24
    • Q.  Commingling  10.25
    • R.  Form: Commingling  10.26

11

Establishing (d)(4)(A) Special Needs Trusts

Kevin Urbatsch

Polly Levin

Gregory Wilcox

  • I.  INTRODUCTION  11.1
  • II.  (d)(4)(A) SNT ESTABLISHMENT REQUIREMENT
    • A.  Complying With “Establishment” Requirement for (d)(4)(A) SNT  11.2
    • B.  Requirement of Legal Authority Over Assets  11.3
  • III.  SELF-ESTABLISHED OR PARENT- OR GRANDPARENT-ESTABLISHED (d)(4)(A) SNT
    • A.  When Available  11.4
    • B.  Source of Funds  11.5
    • C.  Seed Trust Procedure
      • 1.  Establishing SNT
        • a.  Use of “Seed Trust”  11.6
        • b.  Establishing “Seed Trust”  11.7
        • c.  Use of Power of Attorney to Parent or Grandparent  11.8
      • 2.  Notifying SSA of Receipt of Assets  11.9
  • IV.  COURT-ESTABLISHED (d)(4)(A) SNT
    • A.  When Available  11.10
    • B.  What Court Action Is Required?  11.11
    • C.  Selecting Private Professional Fiduciary as Trustee of Court-Established SNT
      • 1.  License Required  11.11A
      • 2.  Definition of Professional Fiduciary  11.11B
      • 3.  Qualifications for Licensing
        • a.  General Qualifications  11.11C
        • b.  Educational Qualifications  11.11D
      • 4.  Form: Licensing Application: Professional Fiduciary  11.11E
      • 5.  Annual Statement and License Renewal  11.11F
      • 6.  Oversight by Professional Fiduciaries Bureau  11.11G
      • 7.  Checklist: Questions to Ask a Potential Private Professional Trustee  11.11H
    • D.  Probate Code §3600 (Litigation) Special Needs Trusts
      • 1.  Compromise, Covenant, or Judgment Under Prob C §§3600–3613  11.12
        • a.  Person With Disability Defined  11.13
        • b.  Person With Capacity Must Consent to Procedure  11.14
      • 2.  Requirements for Prob C §3600 SNT
        • a.  Compliance With Prob C §3604(a)–(b) Requirements  11.15
          • (1)  Substantial Impairment (Prob C §3604(b)(1))  11.16
          • (2)  Unmet Special Needs (Prob C §3604(b)(2))  11.17
          • (3)  Amount in Trust (Prob C §3604(b)(3))  11.18
        • b.  Compliance With Prob C §§3604(d), 3605 Requirements  11.19
        • c.  Compliance With Cal Rules of Ct 7.903 Requirements  11.20
        • d.  Compliance With (d)(4)(A) Requirements  11.21
      • 3.  Procedure
        • a.  Who Can Petition; Timing of Petition  11.22
        • b.  Proper Court to Bring Petition; Separate or Concurrent Hearing  11.23
        • c.  The Petition
          • (1)  Contents  11.24
          • (2)  Allegation of Payment of Medi-Cal Third Party Lien Before Funding First Party SNT  11.25
          • (3)  Form: Petition for Order Establishing SNT Under Prob C §§3600–3613  11.26
        • d.  Notice and Hearing  11.27
        • e.  Letter From Department of Health Care Services  11.28
        • f.  Order; Transfer of Continuing Jurisdiction  11.29
        • g.  Form: Order Establishing Prob C §3600 SNT  11.30
        • h.  Notifying SSA of Receipt of Assets  11.31
    • E.  Special Needs Trust for Assets Other Than Litigation Proceeds  11.32
      • 1.  Potential Procedures for Establishment of SNT Funded With Assets Other Than Litigation Proceeds  11.33
      • 2.  Reformation of Irrevocable Support Trust Into Third Party SNT  11.34
      • 3.  Use of Prob C §2580 Substituted Judgment Petition for Conservatee  11.35
        • a.  Petition; Notice  11.36
        • b.  Compliance With (d)(4)(A) Requirements and Cal Rules of Ct 7.903  11.37
        • c.  Findings; Order  11.38
        • d.  Form: Petition to Establish SNT Under Prob C §2580  11.39
        • e.  Form: Order  11.40
        • f.  If Person Is Not Conserved  11.41
        • g.  Petition for Voluntary Conservatorship  11.42
        • h.  Notifying SSA of Receipt of Assets  11.43
      • 4.  Possible Use of Prob C §3610 Petition for Inheritance SNT
        • a.  Petition to Establish First Party SNT Filed in Conjunction With Petition for Order for Final Distribution  11.44
        • b.  Court Reluctance  11.45
      • 5.  Equitable Remedy Argument  11.46

12

Pooled Special Needs Trusts

Gregory Wilcox

Polly Levin

Kevin Urbatsch

  • I.  OVERVIEW  12.1
  • II.  LEGAL AUTHORITY AND REQUIREMENTS FOR POOLED SNT  12.2
    • A.  Comparison of (d)(4)(A) and Pooled SNT Requirements  12.3
    • B.  Complying With Pooled SNT Legal Requirements
      • 1.  Established and Managed by Nonprofit Association  12.4
      • 2.  Beneficiary’s Separate Account  12.5
      • 3.  Must Be for “Sole Benefit” of Beneficiary  12.6
      • 4.  Established by Parent, Grandparent, Legal Guardian, Court, or by the Person With a Disability  12.7
        • a.  Petition to Establish Pooled Trust Account  12.7A
        • b.  Form: Petition to Establish Pooled Trust Account  12.7B
      • 5.  No Age Limit for Establishing Pooled SNT?  12.8
        • a.  Traditional Medi-Cal Transfer Penalties  12.9
        • b.  SSI Transfer Penalties  12.10
        • c.  Conclusion  12.11
      • 6.  Payback Requirement  12.12
  • III.  CONSIDERATIONS IN SELECTING A SPECIFIC POOLED SNT  12.13
  • IV.  JOINING A POOLED SNT
    • A.  Joinder Agreement  12.14
    • B.  Costs and Fees of Joining a Pooled SNT  12.15
  • V.  CALIFORNIA POOLED SNTS  12.16
    • A.  California Pooled Special Needs Trust  12.17
    • B.  Charities Pooled Trust  12.18
    • C.  Golden State Pooled Trust  12.19
    • D.  The Good Shepherd Fund  12.20
    • E.  Jewish Los Angeles Special Needs Trust  12.20A
    • F.  The Master Trust of California  12.21
    • G.  PLAN of California  12.22
    • H.  Secured Futures Pooled Trust  12.22A
    • I.  Special Needs Trust Foundation  12.23

13

Special Needs Trust Taxation

David L. Rice

Dennis M. Sandoval

Sandy Kasten

  • I.  INTRODUCTION TO SNT TAXATION  13.1
  • II.  INITIAL STEPS AND TAX FILING RESPONSIBILITIES
    • A.  Grantor Versus Nongrantor SNTs  13.2
      • 1.  First and Third Party SNTs  13.3
      • 2.  First Party SNT: Grantor Trust Planning  13.4
      • 3.  Third Party SNT: Nongrantor Trust Planning  13.5
    • B.  Grantor Trust Rules  13.6
      • 1.  Reversionary Interest  13.7
      • 2.  Power to Control Beneficial Enjoyment  13.8
      • 3.  Administrative Powers  13.9
      • 4.  Power to Revoke  13.10
      • 5.  Income for Benefit of Grantor  13.11
    • C.  Grantor Trust’s Payment of Grantor-Beneficiary’s Income Tax  13.12
    • D.  Nonrecognition Transactions Between Grantor-Beneficiary and Grantor Trust  13.12A
  • III.  INCOME TAX-RELATED RESPONSIBILITIES OF TRUSTEES OF NONGRANTOR TRUSTS
    • A.  Responsibility for Preparing Tax Returns and Furnishing Information to Beneficiary  13.13
    • B.  Trustee and Preparer’s Responsibility for Tax Return  13.14
    • C.  Successor Trustee’s Liability for Unpaid Taxes  13.15
    • D.  Filing Initial Required Tax Forms
      • 1.  IRS Form 56: Notice Concerning Fiduciary Relationship  13.16
      • 2.  Filing Notice With Franchise Tax Board  13.17
      • 3.  IRS Form SS-4: Application for Taxpayer Identification Number  13.18
      • 4.  Alternative Application Procedures for Taxpayer Identification Number  13.19
  • IV.  BASIC CONCEPTS OF INCOME TAXATION OF NONGRANTOR TRUSTS
    • A.  Definitions  13.20
    • B.  Trust as Taxpayer or Conduit  13.21
    • C.  Governing Law
      • 1.  Internal Revenue Code  13.22
      • 2.  California Law Incorporates Federal Statutes  13.23
    • D.  Determining Taxable Income
      • 1.  Overview of Process  13.24
      • 2.  Determining Gross Income
        • a.  Difference Between Income for Tax Purposes and for Public Benefits Eligibility  13.25
        • b.  IRS Definition of Income  13.26
        • c.  Income for SSI Purposes  13.27
        • d.  Effect of Different Definitions of Income  13.28
      • 3.  Income Tax Deductions  13.29
        • a.  Above-the-Line Deductions  13.30
        • b.  Below-the-Line Deductions  13.31
        • c.  Net Operating Losses  13.32
        • d.  Charitable Contribution Deduction  13.33
        • e.  Personal Exemption
          • (1)  Simple Trust or Complex Trust  13.34
          • (2)  Qualified Disability Trust  13.35
        • f.  Deduction for Estate Tax Attributable to Income in Respect of Decedent  13.36
        • g.  Capital Losses  13.37
        • h.  Income Versus Estate Tax Deduction  13.38
        • i.  Deductions in Year of Termination  13.39
        • j.  Distribution Deduction  13.40
      • 4.  Computing Distributable Net Income (DNI)  13.41
      • 5.  Taxable Income  13.42
    • E.  Computing Tax Due
      • 1.  Tax Rate Schedules  13.43
      • 2.  Capital Asset Tax Treatment  13.44
      • 3.  Qualified Dividend Income Tax Treatment  13.45
      • 4.  IRC §1411 Net Investment Income Tax  13.45A
      • 5.  Kiddie Tax  13.46
      • 6.  Credits  13.47
      • 7.  Alternative Minimum Tax  13.48
    • F.  Treatment of Distribution to Beneficiaries  13.49
      • 1.  Taxation of Beneficiaries of Complex Trust  13.50
        • a.  First-Tier Distributions and Beneficiaries  13.51
        • b.  Second-Tier Distributions and Beneficiaries  13.52
        • c.  Treatment of Distributions  13.53
        • d.  Character of Income and Deductions  13.54
        • e.  Separate Share Rule  13.55
      • 2.  Other Beneficiary Taxation Issues  13.56
    • G.  Capital Gains and Losses  13.57
      • 1.  Sale of Capital Asset by Trust  13.58
      • 2.  In-Kind Distributions  13.59
      • 3.  Distributions on Termination of Trust  13.60
    • H.  Tax Year of Trust  13.61
      • 1.  IRC §645 Election  13.62
      • 2.  IRC §663(b) 65-Day Election  13.63
    • I.  Final Fiduciary Returns  13.64
    • J.  Trapped Income: Trust Accounting Income Versus Taxable Income of Trust  13.65
    • K.  Separate Trust Rule for Electing Small Business Trusts  13.66
  • V.  CALIFORNIA SOURCE OF INCOME RULES
    • A.  Taxation of Trust  13.67
    • B.  Taxation of Beneficiary  13.68
    • C.  Determining Source of Income  13.69
  • VI.  PROCEDURES FOR FILING AND PAYING TRUST’S INCOME TAX
    • A.  Which Trusts Must File  13.70
    • B.  Time for Filing and Payment of Tax  13.71
    • C.  Extensions of Time to File Return and for Payment of Tax Due
      • 1.  Federal Extensions  13.72
        • a.  Extension for Filing Return  13.73
        • b.  Extension for Payment of Tax  13.74
      • 2.  California Extensions  13.75
    • D.  Penalties and Interest
      • 1.  Penalty for Late Filing  13.76
      • 2.  Penalty for Failure to Pay Tax When Due  13.77
      • 3.  Interest on Late Payment of Tax  13.78
      • 4.  Other Penalties  13.79
    • E.  Forms Required
      • 1.  Federal Income Tax Forms
        • a.  United States Fiduciary Income Tax Return: Form 1041  13.80
        • b.  Supplemental Schedules to Form 1041  13.81
      • 2.  California Fiduciary Income Tax Return: FTB Form 541  13.82
    • F.  Estimated Tax Payments  13.83
    • G.  Filing Requirements for Grantor Trusts  13.84
      • 1.  Regular Reporting Method  13.85
      • 2.  Optional Reporting Methods  13.86
        • a.  Trust Owned by One Grantor or One Other Person [Deleted]  13.87
        • b.  Trust Owned by Two or More Grantors or Other Persons [Deleted]  13.88
      • 3.  Grantor Ceases to Be Owner  13.89
      • 4.  Changing Reporting Methods  13.90
    • H.  Refund Procedure [Deleted]  13.91
  • VII.  GIFT TAX AND ESTATE TAX ISSUES
    • A.  First Party Special Needs Trusts  13.92
      • 1.  Gift Tax Issues  13.93
      • 2.  Estate Tax Issues  13.94
    • B.  Third Party Special Needs Trusts
      • 1.  Gift Tax Issues  13.95
      • 2.  Estate Tax Issues  13.96
  • VIII.  PAYROLL TAX ISSUES
    • A.  Classification of Caregiver as Employee or Independent Contractor  13.97
    • B.  Caregiver Must Be Able to Work Legally in the United States  13.98
    • C.  Payroll Tax Requirements
      • 1.  Classification of Caregiver as Regular or Household Employee  13.99
      • 2.  Federal Payroll Taxes
        • a.  Regular Employees  13.100
        • b.  Household Employees  13.101
      • 3.  California Payroll Taxes  13.102
        • a.  Regular Employees  13.103
        • b.  Household Employees  13.104
      • 4.  Federal Forms and Payments
        • a.  New Employers and New Employees  13.105
        • b.  Regular Employees  13.106
        • c.  Household Employees  13.107
        • d.  Independent Contractors and 1099 Forms  13.108
      • 5.  California Forms and Payments
        • a.  New Employers and New Employees  13.109
        • b.  Regular Employers  13.110
        • c.  Household Employees  13.111
      • 6.  Payroll Tax Penalties  13.112
  • IX.  MINIMUM WAGE LAWS [Deleted]  13.113
  • X.  INCOME TAX DEDUCTION FOR MEDICAL EXPENSES
    • A.  Nongrantor Trusts  13.114
    • B.  Grantor Trusts  13.115
    • C.  Deductible Medical Expenses  13.116
      • 1.  In-Home Caregiver Services  13.117
      • 2.  Institutional Care  13.118
      • 3.  Educational Expenses  13.119
      • 4.  Medical Travel  13.120
      • 5.  Medical Conferences  13.121
      • 6.  Legal Expenses  13.122
      • 7.  Capital Improvements  13.123

14

Special Needs Trust Administration and Appropriate Distributions

Ruth A. Phelps

Carol S. Battaglia

Mary L. Waltari

  • I.  SNT ADMINISTRATION OVERVIEW  14.1
  • II.  TRUSTEE’S GENERAL LEGAL AUTHORITY  14.2
  • III.  APPLICABLE TRUSTEE DUTIES  14.3
    • A.  Duty of Skill and Care  14.4
    • B.  Duty to Carry Out Trust Terms  14.5
    • C.  Duty of Loyalty to Beneficiary  14.6
    • D.  Duty of Prudent Investment  14.7
      • 1.  Court-Supervised SNTs (Cal Rules of Ct 7.903)
        • a.  Permitted Investments  14.8
        • b.  Additional Investment Options Require Court Order  14.9
      • 2.  Duty to Invest Prudently for Non-Court-Supervised SNTs  14.10
        • a.  Statutory Prudent Investor Standard  14.11
        • b.  Delegating Investment Functions  14.12
      • 3.  Duty to Diversify  14.13
      • 4.  Duty of Diligence  14.14
      • 5.  Duty to Consider Beneficiary’s Needs  14.15
    • E.  Duty Not to Delegate Trustee Responsibilities
      • 1.  Acts to Be Performed Personally  14.16
      • 2.  How to Avoid Improper Delegation  14.17
      • 3.  Trustee’s Liability for Improper Delegation  14.18
    • F.  Duty to Maintain Books and Records  14.19
      • 1.  Effect of Not Maintaining Books and Records  14.20
      • 2.  Maintaining Records of Discretionary Actions  14.21
      • 3.  Form: Record of Trustee’s Discretionary Actions  14.22
      • 4.  Trust Records to Be Kept  14.23
      • 5.  Computerized Recordkeeping  14.24
    • G.  Duty to Account to Beneficiaries and Court  14.25
  • IV.  INITIAL DUTIES OF TRUSTEE  14.26
    • A.  Evaluating Beneficiary’s Immediate Situation  14.27
    • B.  Determining Whether SNT Is First Party or Third Party  14.28
    • C.  Understanding Other Fiduciaries’ Roles on Behalf of Beneficiary  14.29
    • D.  Determining Authority of Trust Advisory Committee or Trust Protector  14.30
      • 1.  Trust Advisory Committee  14.31
      • 2.  Trust Protector  14.32
    • E.  Establishing System to Request Disbursements  14.33
    • F.  Making a Monthly Budget  14.34
      • 1.  Step 1: Listing Monthly Income  14.35
      • 2.  Form: Income Sources Per Month  14.36
      • 3.  Step 2: Identifying Monthly Expenses  14.37
      • 4.  Form: Monthly Expenditures   14.38
      • 5.  Form: Step 3: Comparing Income and Expenses  14.39
      • 6.  Step 4: Making Appropriate Changes  14.40
  • V.  MAKING DISTRIBUTIONS FROM SNT  14.41
    • A.  Legal Standard in Exercising Trustee’s Discretion  14.42
      • 1.  Fiduciary Principles  14.43
      • 2.  Trustee Must Use Good Faith  14.44
      • 3.  Trustee Must Follow Purposes of Trust  14.45
      • 4.  Court Cannot Interfere With Trustee Discretion if It Merely Disagrees With Decision  14.46
    • B.  Considering “Income” and “Resource” Rules  14.47
    • C.  How SSA Treats SNT Distributions  14.48
      • 1.  Direct Income: Avoiding Cash (or Cash Equivalents) or Reimbursements  14.49
      • 2.  Not Income: Distributions for Services Not Covered by SSI or Medi-Cal Are Acceptable  14.50
      • 3.  Not Income: Distributions for Items Other Than Food or Shelter Are Acceptable  14.51
      • 4.  In-Kind Support and Maintenance (ISM): Distribution of Food or Shelter Will Reduce (or Eliminate) SSI  14.52
        • a.  ISM Defined  14.53
        • b.  Effect of Receipt of ISM on SSI Recipient  14.54
          • (1)  Value of One-Third-Reduction Rule (VTR)  14.55
          • (2)  Presumed Maximum Value (PMV) Rule  14.56
        • c.  Food or Shelter Received During Temporary Absences Does Not Count as ISM  14.57
        • d.  How Best to Use ISM to Benefit SNT Beneficiary  14.58
    • D.  Distributions to Other Than Beneficiary of SNT  14.59
      • 1.  From a Third Party SNT May Be Allowed  14.60
      • 2.  From a First Party SNT Not Allowed  14.61
      • 3.  Distributions That Exhaust Trust Assets  14.62
    • E.  Examples of Appropriate Distributions
      • 1.  Purchase of Exempt Resources  14.63
      • 2.  Payment for Services  14.64
      • 3.  Payment of Medical Expenses  14.65
      • 4.  Vacations  14.66
      • 5.  List of Permissible SNT Distributions  14.67
    • F.  Procedures for Making Proper SNT Distribution  14.68
    • G.  Common Administration and Distribution Errors by SNT Trustees  14.69
    • H.  Providing Assistance With Reporting Requirements  14.70

15

Specific Special Needs Trust Administration Issues

John A. Payne, Jr.

Carol S. Battaglia

Mary L. Waltari

  • I.  OVERVIEW OF SNT ADMINISTRATION  15.1
  • II.  PERSONAL CARE OF BENEFICIARY  15.2
    • A.  Hiring Caregivers  15.3
      • 1.  Employee or Independent Contractor  15.4
      • 2.  Using a Caregiver Agency  15.5
      • 3.  Background Investigations  15.5A
      • 4.  Liability and Insurance Issues  15.6
      • 5.  Wage and Hour Laws  15.7
      • 6.  Withholding Requirements  15.8
      • 7.  Hiring Parents as Caregivers  15.9
      • 8.  Hiring IHSS Worker as Caregiver  15.10
      • 9.  Form: Caregiver Employment Agreement  15.11
    • B.  Hiring Case Managers  15.12
      • 1.  Case Manager’s Role  15.13
      • 2.  Implementing a Care Plan  15.14
    • C.  Hiring Advocates  15.15
  • III.  PURCHASE AND OWNERSHIP OF HOME  15.16
    • A.  Legal Authority  15.17
    • B.  Practical Issues of Home Purchase  15.18
      • 1.  SNT Requires Sufficient Assets to Purchase Home  15.19
      • 2.  Outright Purchase or Purchase by Mortgage
        • a.  Outright Purchase  15.20
        • b.  Purchase by Mortgage  15.21
      • 3.  Joint Ownership Issues  15.22
      • 4.  Purchase and Distribution of Home to Beneficiary  15.23
      • 5.  When Court Approval Is Required for Purchase of Home  15.24
      • 6.  Paying Household Operating Expenses  15.25
      • 7.  Payment for Home Improvements or Renovations  15.26
      • 8.  Payment for Modifications to Home Owned by Others  15.27
      • 9.  Payment of Rent by Cohabitating Family Members  15.28
    • C.  SNT and Housing Subsidies (Section 8)  15.29
      • 1.  Effect of SNT Distributions on Eligibility for Housing Subsidies  15.30
      • 2.  SNT as Section 8 Landlord  15.31
    • D.  Tax Issues of SNT Home Ownership
      • 1.  Real Property Taxes (Proposition 13)  15.32
      • 2.  Income Taxes
        • a.  Step-Up in Basis  15.33
        • b.  Capital Gains Exclusion  15.34
    • E.  Home Sale
      • 1.  Third Party SNT  15.35
      • 2.  First Party SNT  15.36
  • IV.  PURCHASE OF VEHICLE  15.37
    • A.  Holding Title to Vehicle  15.38
    • B.  Paying Vehicle’s Expenses  15.39
  • V.  FEES FOR TRUSTEE, ADVISORY COMMITTEE, AND ATTORNEYS
    • A.  Third Party and First Party SNTs Not Subject to Cal Rules of Ct 7.903  15.40
    • B.  Court-Funded SNT Subject to Cal Rules of Ct 7.903
      • 1.  Factors to Determine Just and Reasonable Compensation  15.41
      • 2.  Compensation of Advisory Committee Members  15.42
      • 3.  Periodic Payments on Account Allowed Under Court Order  15.43
  • VI.  BENEFICIARY LEAVING CALIFORNIA  15.44
    • A.  California Procedure for Third Party SNT and First Party SNT (Not Subject to Cal Rules of Court 7.903)  15.45
    • B.  California Procedure for First Party SNT (Subject to Cal Rules of Court 7.903)  15.46
  • VII.  BENEFICIARY IS NO LONGER DISABLED  15.47
    • A.  SNT Terms Will Control  15.48
    • B.  Modification or Termination on Changed Circumstances  15.49
    • C.  Termination or Modification of First Party SNT  15.50
    • D.  Minor Is No Longer Disabled  15.51

16

Special Needs Trust Accounting

Gregory J. Lederman

  • I.  INTRODUCTION
    • A.  Duty to Account  16.1
    • B.  Consequences of Failure to Keep and Render Accounts  16.1A
  • II.  NON-COURT-SUPERVISED SNT ACCOUNTINGS
    • A.  When to Account  16.2
    • B.  To Whom to Account  16.3
    • C.  Petitioning Court to Compel or Approve Account  16.4
    • D.  Exceptions to Accounting Requirements  16.5
      • 1.  Waiver of Account  16.6
      • 2.  Form: Waiver of Account  16.7
    • E.  Content of Account to Beneficiary  16.8
    • F.  Format of Account  16.9
    • G.  Use of Categories  16.10
    • H.  Form: Letter to Beneficiary About Account  16.11
    • I.  Statute of Limitations
      • 1.  Limitation-of-Liability Provision in SNT  16.12
      • 2.  No Limitation-of-Liability Provision in SNT  16.13
    • J.  Minimizing Trustee’s Liability Exposure in Noncourt Accounts  16.14
      • 1.  Protecting Against Claims of Remainder and Contingent Interests  16.15
      • 2.  Protecting Trustee Against Claims of Minors and Incapacitated Persons  16.16
      • 3.  Availability of Prob C §16461 180-Day Notice on Noncourt Account to Minors and Incapacitated Persons  16.17
      • 4.  Other Liability Limitations and Exculpation of Trustee  16.18
      • 5.  Form: Release of Trustee  16.19
    • K.  Court Account Versus Account to Beneficiaries  16.20
  • III.  COURT-SUPERVISED SNT ACCOUNTINGS  16.21
    • A.  When Required  16.22
    • B.  Venue  16.23
    • C.  Standard or Simplified Account  16.23A
      • 1.  When Standard Accounting Is Required  16.23B
      • 2.  When Standard Accounting May Be Preferred  16.23C
      • 3.  When to Use Simplified Accounting  16.23D
      • 4.  Judicial Council Account Forms  16.23E
        • a.  Optional Judicial Council Forms for Use in Standard Accounts Only  16.23F
        • b.  Judicial Council Forms for Mandatory Use in Simplified Accounts, Optional Use in Standard Accounts  16.23G
      • 5.  Standard Account Requirements  16.23H
    • D.  Content of Account
      • 1.  All Accounts  16.24
        • a.  Summary of Account  16.25
          • (1)  Form: Summary of Account—Standard and Simplified Accounts (Judicial Council Form GC-400(SUM)/GC-405(SUM))  16.26
          • (2)  Balancing of Account  16.27
        • b.  Required Schedules in Petition  16.28
        • c.  Additional Required Schedules  16.29
        • d.  Format of Schedules  16.30
        • e.  Practical Application of Accounting Schedules  16.31
          • (1)  Change in Form of Asset Compared to Disbursement  16.32
          • (2)  Gain on Sale and Loss on Sale  16.33
        • f.  Other Documents That Must Be Submitted With Account  16.34
      • 2.  Final Account  16.35
    • E.  Contents of Petition  16.36
      • 1.  Description of Financial Transactions  16.37
      • 2.  Explanation of Unusual Items  16.38
      • 3.  Disclosure of Family Relationships  16.39
      • 4.  Allegations of Cash Investments  16.40
      • 5.  Request for Compensation  16.41
    • F.  Notice Requirements  16.42
    • G.  Filing Fee for Court-Funded SNTs  16.43
    • H.  Frequent Issues in SNT Court Accounting
      • 1.  Routine Support Versus Special Needs  16.44
      • 2.  Changing Bond Amount  16.45
      • 3.  Reimbursement to Parents, Spouse, or Domestic Partners  16.46
      • 4.  Recurring Expenses  16.47
      • 5.  Payments for Caregiver Services  16.48
      • 6.  Vacations  16.49
      • 7.  Liability of Trustee for Inappropriate Distributions  16.50
    • I.  Form: Petition for First Account and Report of Trustee  16.51
    • J.  Form: Order Settling Account and Report of Trustee, Allowing Fees  16.52
    • K.  Effect of Order Approving Accounts  16.53
    • L.  Final Accounting: Consider Posttransaction Closing Statement; Obtain Discharge of Bond  16.54

17

Special Needs Trust Termination

Carol S. Battaglia

Mary L. Waltari

  • I.  INTRODUCTION TO SNT TERMINATION  17.1
    • A.  Death of SNT Beneficiary  17.2
    • B.  Exhaustion of Trust Assets  17.3
    • C.  Failure or Frustration of Trust Purpose  17.4
    • D.  Other Termination Provision in Trust Document  17.5
    • E.  Trustee’s Duties Continue  17.6
  • II.  DETERMINING IF FIRST PARTY OR THIRD PARTY SNT  17.7
    • A.  Checklist: Trustee Termination of First Party SNT  17.8
    • B.  Checklist: Trustee Termination of Third Party SNT  17.9
  • III.  FIRST PARTY SNT
    • A.  Trustee Responsibilities on Termination  17.10
    • B.  Notifying Public Agencies That Provided Medical Assistance
      • 1.  When Required  17.11
      • 2.  California Agencies to Be Notified  17.12
      • 3.  Out-of-State Agencies to Be Notified  17.13
      • 4.  Specific Notice and Claims Statute for Termination of First Party SNT Established Under Prob C §3604  17.14
    • C.  Paying Debts and Claims
      • 1.  Priority of First Party SNT Creditors
        • a.  Fees and Expenses Payable Before Medi-Cal Reimbursement  17.15
          • (1)  Priority Under Medi-Cal  17.16
          • (2)  Priority Under SSI  17.17
          • (3)  Effect of Conflicting SSI and Medi-Cal Rules  17.18
        • b.  Reasonable Fees for Administration of Trust  17.19
        • c.  Taxes  17.20
        • d.  Funeral Expenses  17.21
      • 2.  Medi-Cal Reimbursement
        • a.  When Required
          • (1)  On Death of SNT Beneficiary  17.22
          • (2)  On Termination of SNT by Other Than Death  17.23
          • (3)  On Termination by Agency Petition  17.24
        • b.  No Formal Claim by Medi-Cal Agencies Required  17.25
        • c.  Time Limit for Medi-Cal Agency’s Claim  17.26
        • d.  Statute of Limitation for Medi-Cal Reimbursement Claim  17.27
        • e.  Assets Subject to Payback Requirement
          • (1)  Assets in General  17.28
          • (2)  Structured Settlement Arrangements  17.29
        • f.  Determining Amount of Payback
          • (1)  Reimbursement Limited to Medi-Cal Services Provided After Establishment of SNT?  17.30
          • (2)  Reviewing Billing Report From Medi-Cal Agencies  17.31
        • g.  Application of SNT Payback Provisions  17.32
        • h.  Other Theories for Reducing Medi-Cal Lien
          • (1)  DHCS’s Right to Recover from SNT Is Permissive  17.32A
          • (2)  Payment Must Meet Definition of “Medical Assistance” to Be Recoverable  17.32B
            • (a)  In-Home Support Services Exempted   17.32C
            • (b)  Other Common Types of Medical Expenses Not Included in “Medical Assistance”   17.32D
          • (3)  Claim Limited When Funding Source Was Lawsuit Brought by Beneficiary  17.32E
        • i.  Form: Petition for Instructions Concerning Medi-Cal Recovery  17.32F
        • j.  Obtaining Release From Medi-Cal Agency  17.33
      • 3.  Other Debts  17.34
    • D.  Final Account  17.35
    • E.  Final Distribution  17.36
    • F.  Form: Receipt on Distribution  17.37
  • IV.  THIRD PARTY SNT
    • A.  Trustee Responsibilities on Termination  17.38
    • B.  Paying Fees and Expenses  17.39
      • 1.  Professional Fees  17.40
      • 2.  Funeral Expenses  17.41
      • 3.  Other Debts  17.42
      • 4.  Taxes  17.43
    • C.  Final Account  17.44
    • D.  Final Distributions  17.45

18

Complete Special Needs Trust Forms

  • I.  THIRD PARTY SPECIAL NEEDS TRUST  18.1
    • A.  Form: Title; Table of Contents  18.2
    • B.  Form: Creation of Trust (Article 1)  18.3
    • C.  Form: Funding and Purpose of Trust (Article 2)  18.4
    • D.  Form: Distribution for Special Needs (Article 3)  18.5
    • E.  Form: Trust Advisory Committee (Article 4)  18.6
    • F.  Form: Care Manager (Article 5)  18.7
    • G.  Form: Trustee and Trust Protector Provisions (Article 6)  18.8
    • H.  Form: Termination Provisions (Article 7)  18.9
    • I.  Form: Trustee’s Duties and Powers (Article 8)  18.10
    • J.  Form: General Matters (Article 9)  18.11
  • II.  INDIVIDUAL-, PARENT-, OR GRANDPARENT-ESTABLISHED (d)(4)(A) SNT “SEED TRUST”  18.12
    • A.  Form: Title; Table of Contents  18.13
    • B.  Form: Creation of Trust (Article 1)  18.14
    • C.  Form: Funding and Purpose of Trust (Article 2)  18.15
    • D.  Form: Distribution for Special Needs (Article 3)  18.16
    • E.  Form: Trust Meets Public Benefit Legal Requirements (Article 4)  18.17
    • F.  Form: Trust Advisory Committee (Article 5)  18.18
    • G.  Form: Trustee Provisions (Article 6)  18.19
    • H.  Form: Administration on Death of Beneficiary (Article 7)  18.20
    • I.  Form: Trustee Powers (Article 8)  18.21
    • J.  Form: General Matters (Article 9)  18.22
  • III.  COURT-ESTABLISHED (d)(4)(A) SPECIAL NEEDS TRUST  18.23
    • A.  Form: Title; Table of Contents  18.24
    • B.  Form: Creation of Trust (Article 1)  18.25
    • C.  Form: Funding and Purpose of Trust (Article 2)  18.26
    • D.  Form: Distribution for Special Needs (Article 3)  18.27
    • E.  Form: Trust Meets Legal Requirements (Article 4)  18.28
    • F.  Form: Trust Advisory Committee and Trust Protector (Article 5)  18.29
    • G.  Form: Trustee Provisions (Article 6)  18.30
    • H.  Form: Administration on Death of Beneficiary (Article 7)  18.31
    • I.  Form: Trustee Powers (Article 8)  18.32
    • J.  Form: General Matters and Instructions Regarding Trusteeship (Article 9)  18.33

SPECIAL NEEDS TRUSTS: PLANNING, DRAFTING, AND ADMINISTRATION

(1st Edition)

June 2018

TABLE OF CONTENTS

 

File Name

Book Section

Title

CH02

Chapter 2

Ethical Considerations When Planning for Persons With Disabilities

02-035

§2.35

Sample Paragraphs in Engagement Letter Confirming Family Member’s Role

02-047

§2.47

Potential Conflicts Disclosure and Waiver for Special Needs Trust Beneficiary and Trustee During Administration of Trust

CH03

Chapter 3

Public Benefits for Persons With Disabilities

03-032

§3.32

Letter to SSA Notifying of Receipt of Assets and Funding of (d)(4)(A) SNT

CH04

Chapter 4

Family Law Issues in Planning for Persons With Disabilities

04-030

§4.30

A Checklist

04-040

§4.40

Transmutation Agreement

CH05

Chapter 5

Estate Planning for Persons With Disabilities

05-014

§5.14

Special Needs Planning Intake Form

05-021

§5.21

Coordination With Other Family Members

05-027

§5.27

Guidelines to Parents for Writing Memorandum of Intent

CH06

Chapter 6

Common Provisions in Third Party Special Needs Trusts

06-003

§6.3

Revocability of SNT

06-004

§6.4

Irrevocability of SNT

06-006

§6.6

Provisions for Multiple Beneficiaries of Third Party SNT

06-008

§6.8

Introductory Provisions

06-010

§6.10

Trust Purpose

06-011

§6.11

Effect on Public Benefits if No Trust

06-012

§6.12

Settlor’s General Philosophy

06-013

§6.13

Use of Memorandum of Intent

06-015

§6.15

Funding the Trust

06-016

§6.16

Acceptance of Property by Trustee

06-017

§6.17

No Commingling of Property

06-019

§6.19

Trustee’s Sole and Absolute Distribution Discretion

06-020

§6.20

Distributions of Income and Principal

06-021

§6.21

Distribution Guidelines

06-022

§6.22

Distributions Shall Be Supplemental and in Beneficiary’s Best Interest

06-023

§6.23

Trustee’s Authority to Refuse Distribution Requests

06-025

§6.25

Care Manager

06-026

§6.26

Role of Care Manager

06-027

§6.27

Compensation of Care Manager

06-028

§6.28

Resignation of Care Manager

06-031

§6.31

Trustee Provisions

06-032

§6.32

Trustee Resignation, Removal, and Replacement

06-033

§6.33

Successor Trustee Powers and Liabilities

06-035

§6.35

Trust Advisory Committee

06-042

§6.42

Trust Protector

06-045

§6.45

Termination on Beneficiary’s Death

06-047

§6.47

Termination if Beneficiary Ineligible for Benefits

06-049

§6.49

Termination on Substantial Gainful Employment

06-051

§6.51

Termination if Court Orders Reimbursement

06-053

§6.53

Termination When Trust Corpus Is Small

06-056

§6.56

Outright Distribution

06-058

§6.58

Special Power of Appointment

06-060

§6.60

Disposition if SNT Beneficiary Is Still Alive

06-062

§6.62

Remote Contingency Distribution

06-064

§6.64

Alternative Distributions for Minors

06-065

§6.65

Alternative Distributions for Persons Eligible for Needs-Based Public Benefits

06-067

§6.67

Payment of Taxes and Other Debts

06-068

§6.68

Payment of Funeral Expenses

06-070

§6.70

Sheltering Assets From Regional Center Consideration

06-072

§6.72

Special Needs Definition

06-074

§6.74

Spendthrift Clause

06-076

§6.76

Trustee Cooperation in Seeking Public Benefits

06-078

§6.78

Professional Fees

CH07

Chapter 7

Funding Third Party Special Needs Trusts

07-018

§7.18

Disclaimer for Attorney Assisting Client in Funding Modeling

07-073

§7.73

Power of Appointment When Making SNT Designated Beneficiary

07-073B

§§7.73B-7.73C

Limitation on Payment of Debts and Administration Expenses

 

§7.73C

Limitation on Payment of Estate Tax

CH08

Chapter 8

Planning Using First Party Special Needs Trusts or Alternatives

08-054

§8.54

Petition to Modify Disqualifying Trust to Special Needs Trust

CH08A

Chapter 8A

Medicare Set-Aside Arrangements

08A-045

§8A.45

CMS Form: Guidelines for Self-Administration of Worker’s Compensation MSA

08A-046

§8A.46

CMS Form: Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA)-Account Expenditure for Lump-Sum Account

08A-049

§8A.49

STEP-BY-STEP CHECKLIST FOR MSP COMPLIANCE FOR FUTURE MEDICAL EXPENSES

CH08B

Chapter 8B

Qualified Settlement Funds

08B-011

§8B.11

QSF Trust Agreement

08B-013

§8B.13

Petition to Establish QSF

08B-014

§8B.14

Memorandum of Points and Authorities

08B-015

§8B.15

Order Establishing QSF

CH09

Chapter 9

Required Provisions in (d)(4)(A) Special Needs Trusts

09-014

§9.14

Title and Introduction of an SNT Established by the Individual

09-014A

§9.14A

Title and Introduction of Parent- or Grandparent-Established SNT

09-015

§9.15

Title and Introduction of Court-Established SNT

09-017

§9.17

Defining SNT Beneficiary

09-019

§9.19

Irrevocability of SNT

09-020A

§9.20A

Payback to Medicaid

09-021A

§9.21A

Distributions on Early Termination

09-023

§9.23

Expenses to Be Paid Before Payback to Medi-Cal

09-025

§9.25

Notice to State Agencies

09-029

§9.29

Trust Meets All Rule 7.903 Requirements

09-031

§9.31

Investment Standard

09-033

§9.33

Bond

09-035

§9.35

Accounting to Court

09-037

§9.37

Trustee Resignation, Removal, and Replacement

09-039

§9.39

Compensation of Trustee, Advisory Committee Members, and Attorney

CH10

Chapter 10

Suggested Provisions in (d)(4)(A) Special Needs Trusts

10-004

§10.4

Trust Purpose

10-006

§10.6

Distribution Provision

10-008

§10.8

Authority to Purchase Residence

10-010

§10.10

Definition of Special Needs

10-012

§10.12

Treatment of Trust by Public Benefit Programs

10-015

§10.15

Special (Limited) Power of Appointment

10-019

§10.19

Grantor Trust Provision

10-022

§10.22

Spendthrift Provision

10-024

§10.24

Asset Augmentation to SNT

10-026

§10.26

Commingling

CH11

Chapter 11

Establishing (d)(4)(A) Special Needs Trusts

11-011H

§11.11H

Checklist: Questions to Ask a Potential Private Professional Trustee

11-026

§11.26

Petition for Order Establishing SNT Under Prob C §§3600–3613

11-030

§11.30

Order Establishing Prob C §3600 SNT

11-039

§11.39

Petition to Establish SNT Under Prob C §2580

CH12

Chapter 12

Pooled Special Needs Trusts

12-007B

§12.7B

Petition to Establish Pooled Trust Account

CH14

Chapter 14

Special Needs Trust Administration and Appropriate Distributions

14-022

§14.22

Record of Trustee’s Discretionary Actions

14-036

§14.36

Income Sources Per Month

14-038

§14.38

Monthly Expenditures

14-039

§14.39

Step 3: Comparing Income and Expenses

CH15

Chapter 15

Specific Special Needs Trust Administration Issues

15-011

§15.11

Caregiver Employment Agreement

CH16

Chapter 16

Special Needs Trust Accounting

16-007

§16.7

Waiver of Account

16-011

§16.11

Letter to Beneficiary About Account

16-019

§16.19

Release of Trustee

16-051

§16.51

Petition for First Account and Report of Trustee

16-052

§16.52

Order Settling Account and Report of Trustee, Allowing Fees

CH17

Chapter 17

Special Needs Trust Termination

17-008

§17.8

Checklist: Trustee Termination of First Party SNT

17-009

§17.9

Checklist: Trustee Termination of Third Party SNT

17-032F

§17.32F

Petition for Instructions Concerning Medi-Cal Recovery

17-037

§17.37

Receipt on Distribution

CH18

Chapter 18

Complete Special Needs Trust Forms

18-002

§§18.2-18.11

Title; Table of Contents

 

§18.3

Creation of Trust (Article 1)

 

§18.4

Funding and Purpose of Trust (Article 2)

 

§18.5

Distribution for Special Needs (Article 3)

 

§18.6

Trust Advisory Committee (Article 4)

 

§18.7

Care Manager (Article 5)

 

§18.8

Trustee and Trust Protector Provisions (Article 6)

 

§18.9

Termination Provisions (Article 7)

 

§18.10

Trustee’s Duties and Powers (Article 8)

 

§18.11

General Matters (Article 9)

18-013

§§18.13-18.22

Title; Table of Contents

 

§18.14

Creation of Trust (Article 1)

 

§18.15

Funding and Purpose of Trust (Article 2)

 

§18.16

Distribution for Special Needs (Article 3)

 

§18.17

Trust Meets Public Benefit Legal Requirements (Article 4)

 

§18.18

Trust Advisory Committee (Article 5)

 

§18.19

Trustee Provisions (Article 6)

 

§18.20

Administration on Death of Beneficiary (Article 7)

 

§18.21

Trustee Powers (Article 8)

 

§18.22

General Matters (Article 9)

18-024

§§18.24-18.33

Title; Table of Contents

 

§18.25

Creation of Trust (Article 1)

 

§18.26

Funding and Purpose of Trust (Article 2)

 

§18.27

Distribution for Special Needs (Article 3)

 

§18.28

Trust Meets Legal Requirements (Article 4)

 

§18.29

Trust Advisory Committee and Trust Protector (Article 5)

 

§18.30

Trustee Provisions (Article 6)

 

§18.31

Administration on Death of Beneficiary (Article 7)

 

§18.32

Trustee Powers (Article 8)

 

§18.33

General Matters and Instructions Regarding Trusteeship (Article 9)

 

About the Authors

LESLIE ANN BARNETT, a 1992 graduate of Loyola Law School, is certified as an Elder Law Attorney by the National Elder Law Foundation. Ms. Barnett, whose practice emphasizes conservatorships, public benefit eligibility issues, estate planning and special needs trusts, is a sole practitioner in Los Angeles. In addition to various Bar memberships, Ms. Barnett is a member of the National Academy of Elder Law Attorneys, Southern California Council for Elder Law Attorneys (President 2005–2006), California Advocates for Nursing Home Reform Legal Network, and a Charter Member of the Academy of Special Needs Trust Planners. She is currently on the Board of Directors for the Center for Health Care Rights. Ms. Barnett also has an M.A. in Social Work and worked as a geriatric social worker for 15 years before practicing law.

DONNA R. BASHAW graduated from Western State University College of Law in 1987, where she was Editor-in-Chief of Law Review and where she is a periodic adjunct professor. She practices elder law at the Elder Law Center in Laguna Hills, California, and is a certified elder law specialist. Mrs. Bashaw is a frequent presenter for Continuing Education of the Bar (CEB), for the National Academy of Elder Law Attorneys, and for the California Advocates for Nursing Home Reform. Mrs. Bashaw is on the national executive board for the National Academy of Elder Law Attorneys, serving as Immediate Past President of the Academy. She was named a Fellow of the National Academy of Elder Law Attorneys in 1997. Mrs. Bashaw is also the immediate past chair of the exam writing committee for national certification of elder law attorneys through the National Elder Law Foundation. She is coauthor of California Durable Powers of Attorney (Cal CEB) and coauthor of California Guide to Tax, Estate & Financial Planning for the Elderly, a Matthew Bender/Lexis-Nexis Publication. For her pro bono service and for her pioneering work in elder law, Mrs. Bashaw received the California Women Lawyers’ Fay Stender Award in 1997, the Teresa Foundation Award in 1998, was named to the Hall of Fame at Western State University in 1999, and received the OCBA Harmon G. Scoville Award in 2000, the Orange County J. Reuben Clark award in 2003, and the State Bar of California Appreciation Award for exceptional public service and contributions to the legal profession in 2005. Mrs. Bashaw served as a delegate to the White House Conference on Aging held in December of 2005. Such a conference is held once every 10 years.

CAROL S. BATTAGLIA has been in private practice for over 25 years and is the senior partner in the law firm of Battaglia & Waltari. As part of her estate planning practice, she routinely works with families who have family members with disabilities to create estate plans using special needs trusts. She also assists trial lawyers in establishing court-created special needs trusts, designing structured settlements, and implementing other strategies to receive an injured party’s settlement funds while maintaining eligibility for government assistance benefits. Ms. Battaglia is a member of the Estate Planning, Probate, and Trust Section of the San Diego County Bar Association and the Estate Planning Council of San Diego. She is also the Southern California member of the Special Needs Alliance, which is a national network of lawyers dedicated to Disability and Public Benefits Law. She is legal counsel to the Special Needs Trust Foundation of San Diego, a pooled special needs trust, for which she wrote the master trust agreement. She is a frequent speaker and author on special needs trusts and other means of maintaining needs-based public benefits. The national attorney’s directory, Martindale-Hubbell, gives Ms. Battaglia its highest rating of AV.

THOMAS BELTRAN is an attorney in private practice in West Los Angeles. He has been handling public benefits matters since 1984. His areas of practice include disability-related estate planning, public benefits litigation in administrative forums and state and federal court, defense of special needs trusts, probate, special education litigation, and appellate matters. He set up the PLAN of California Master Pooled Trust and serves as its general counsel. In the mid-1980s, he was part of a congressional demonstration project that led to the codification of the SSI work incentives, §1619(a)–(b) of the Social Security Act. Mr. Beltran’s other experience includes 10 years with the Regional Centers, work with the special education clinic at Pepperdine Law School, and as a lecturer at the University of Judaism’s graduate school of psychology from 1998 until the program closed in 2001. He has been active in consultation with the dependency system and edited the CASA special education manual. He regularly speaks on disability issues at the California State Bar convention, as well as for CEB, California Advocates for Nursing Home Reform, NBI, and Lorman. He drafted the language for SB 303 (Wright), codified as Pen C §1347.5, applying the ADA’s accessibility requirements to proceedings involving sexual abuse victims with disabilities, and he was the principal drafter of the amendments to Prob C §§3600 et seq. (AB 1851 (Harmon)). Mr. Beltran is a member of the Executive Committee of the State Bar’s Trust and Estates Section. He received his B.A. from the University of North Dakota and his J.D. from Whittier Law School.

JAMES E. BERGE, managing partner of Berge & Berge LLP in San Jose, specializes in estate planning, trust and probate law. After receiving his B.S. from the University of Santa Clara in 1981, Mr. Berge went on to earn his J.D. from the University of Santa Clara School of Law in 1986 and his M.A. in Taxation from Golden Gate University School of Law in 1991. He is a member of the California State Bar, the Probate and Trusts Section of the California and Santa Clara County Bar Associations, the Santa Clara County Estate Planning Counsel and the National Academy of Elder Law Lawyers. He is a member of WealthCounsel, a national association of over 1000 estate planning attorneys who have come together to provide members with education, technical, and legal support in an effort to provide their clients with state of the art estate planning documents for a wide range of estate planning strategies. He is certified by the California State Bar Board of Legal Specialization as an Estate Planning, Probate, and Trust Specialist, and is a California certified public accountant. He is licensed to practice law and accounting in California and is admitted to practice before the United States Tax Court, the United States District Court for the Northern District of California, and the Supreme Court of the United States.

DIEDRE WACHBRIT BRAVERMAN is the principal attorney of Wachbrit Braverman PC in Westlake Village, California. Her practice focuses on estate planning, asset protection, and special needs planning and administration. Ms. Braverman received her B.A. in Classics, magna cum laude, from the University of California, Irvine in 1994 and her J.D. from Stanford Law School in 1997. Ms. Braverman is certified by the California State Bar Board of Legal Specialization as an Estate Planning, Probate, and Trust Specialist. She is a Founding Principal of the Academy of Special Needs Planners, a national organization of attorneys. She teaches CE for attorneys and other professionals nationally and regionally and is a commentator for the Wall Street Journal, the New York Times, and Time Magazine.

JOHN J. CAMPBELL passed away in 2017. He was the founder and principal attorney of the Law Offices of John J. Campbell, P.C., in Denver, Colorado. He had practiced law for over 30 years and had practiced in the areas of elder law and Medicare set asides since 1996. He was licensed to practice law in Colorado. He was a member of the Colorado Bar Association, the Arapahoe County Bar Association, the Missouri Bar Association, the National Academy of Elder Law Attorneys, and the National Alliance of Medicare Set-Aside Professionals. He was a graduate of the University of Missouri-Columbia School of Law, J.D. 1986. He was selected as a Fellow of the Colorado Bar Foundation in 2006 and was the 2006–2008 Cochair of the Elder Law Section of the Colorado Bar Association. He was a Certified Elder Law Attorney by the National Elder Law Foundation; and a Medicare Set-Aside Consultant Certified (national certification through the Commission on Health Care Certification). He was the author of The Complete MSAT Training Course Book; had written and published numerous articles; and had presented seminars on Medicare set asides and elder law issues across the country.

LINDA S. DURSTON is an attorney in private practice in Berkeley, California. Her major practice areas are estate planning, conservatorships, guardianships, and special needs trusts. She formerly practiced Social Security disability law at a not-for-profit agency in Northern California. She is a member of the National Academy of Elder Law Attorneys, California Advocates for Nursing Home Reform, the Contra Costa County Bar Association, and the Alameda County Bar Association. She is past secretary of the California National Academy of Elder Law Attorneys. She is an editor-consultant for California Conservatorship Practice, published by CEB. She is principal author with Linda G. Mills of The Rhetoric, Politics, and Therapeutics of Opening Statements in Social Security Disability Hearings, Yale Journal on Law and Feminism 8, 1:119–144, 1996. She is a graduate of the University of California, Berkeley, where she received B.A., M.A., and Ph.D. degrees in Rhetoric, and where she also taught for many years before entering the legal profession. She received her J.D. from New College of California School of Law in San Francisco.

NANCY KAUPP EWIN, J.D., 1970, Western State University (San Diego) is certified by the California State Bar Board of Legal Specialization as an Estate Planning, Probate, and Trust Specialist. Ms. Ewin is a member of the National Academy of Elder Law Attorneys and has been President of the Southern California Chapter. She supports the California Advocates for Nursing Home Reform. She is a member of the Board of Directors of the Foothills Bar Association and Co-Chair of the Estate Planning, Trust, and Probate Section She serves on the Board of Directors of the Southern Caregiver Resource Center. She serves as adjunct faculty at Cuyamaca College in the ABA Paralegal Studies program, teaching Probate and Estate Planning, and is a frequent lecturer to attorneys and others on matters pertaining to estate planning and legal issues relating to disability and aging.

SCOTT A. HARSHMAN is a member of the firm of Jeffer, Mangels, Butler & Marmaro, LLP in the Orange County office. Mr. Harshman’s practice focuses on trust and estate matters for high net worth individuals, including wealth transfer planning, business succession planning, philanthropic planning, tax controversy, and probate and trust administration. Mr. Harshman received his J.D., cum laude, from Whittier Law School and an LL.M. in Taxation from the University of San Diego School of Law. Mr. Harshman is certified by the California State Bar Board of Legal Specialization as an Estate Planning, Probate, and Trust Specialist. Mr. Harshman is a frequent writer and speaker on estate planning, wealth management, and trust administration.

SANDY KASTEN is a solo practitioner in Berkeley. Her practice focuses on fiduciary and estate taxation, with an emphasis on tax return preparation and planning for trusts, estates, and individuals. Ms. Kasten is a 1976 graduate of the University of California, Hastings College of the Law, and received her M.B.A. in Taxation from Golden Gate University in 1981. She studied accounting at California State University East Bay (formerly CSU Hayward). She is a member of the Alameda County Bar Association and currently serves as treasurer of the Calaveras County Bar Association. She is a past board member of Women Lawyers of Alameda County.

GREGORY J. LEDERMAN graduated from California State University Northridge in 1996 with a B.A. in Speech Communication. He graduated from the University of La Verne College of Law in 2000, where he was a member of Law Review. Mr. Lederman received American Jurist Prudence Awards in Contract Law, Constitutional Law, Civil Procedure, and Insurance Law. Mr. Lederman has a private practice in Woodland Hills focused on estate, trust, and probate law. He is a member of the Estate and Trust Sections of the Los Angeles County Bar and the California State Bar. He is also a member of the National Academy of Elder Law Attorneys.

POLLY LEVIN is an associate attorney with the Bohne Law Group in Walnut Creek. Her major practice areas are estate planning and trust administration, with a particular focus on planning for individuals with disabilities and their families. Ms. Levin also works with personal injury attorneys to establish trusts for minor or disabled clients. She has written articles on planning for persons with disabilities and has appeared in Chuck Finney’s radio program, Your Legal Rights (KALW), discussing special needs trusts. She is a graduate of University of California, Berkeley, and Golden Gate University School of Law. She is a member of the California and New York bars and the Alameda County Bar Association.

TERRY M. MAGADY is in private practice in Los Angeles and specializes in trust administration and litigation, conservatorships, Medi-Cal and other government benefits planning and estate planning for people with special needs. He received his B.A. from Occidental College in 1978, his M.P.A. from Princeton University’s Woodrow Wilson School of Public & International Affairs in 1981, and his J.D. from the University of Southern California in 1986. He is Chairman of the Elder Law Committee of the Beverly Hills Bar Association’s Trust & Estates Section. He is a member of the Council of Advanced Practitioners of the National Academy of Elder Law Attorneys. He serves on Los Angeles County’s public authority for the In-Home Supportive Services program. A certified elder law attorney, Mr. Magady has published many articles on elder law for legal periodicals and has led many CEB programs, including “Advanced Elder Law with Terry Magady.”

CHRISTOPHER M. MOORE is a principal of Moore, Bryan & Schroff in Torrance, California. He is certified by the California State Bar Board of Legal Specialization as an Estate Planning, Probate and Trust and Family Law Specialist. Mr. Moore is a fellow of the American College of Trust and Estate Counsel and the American Academy of Matrimonial Lawyers, and was a member of the State Bar Trusts & Estates Section Executive Committee (2000–2006). Mr. Moore speaks and writes frequently on trusts and estates and family law issues. His practice is limited to trusts and estates and family law. Mr. Moore received his B.A. in 1960 from Stanford University and his J.D. in 1964 from Harvard Law School.

GENE L. OSOFSKY is a partner in the firm of Osofsky & Osofsky in Hayward, specializing in elder law, estate planning, Medi-Cal planning and family law. He received his B.A. in 1966 from the University of California, Berkeley, and his J.D. in 1969 from the University of California, Los Angeles, School of Law. Mr. Osofsky is a certified Specialist in Family Law (State Bar of California, Board of Legal Specialization), a former VISTA Volunteer and legal services attorney, and a recipient of the Wiley Manual Pro Bono Award. He is a member of the National Academy of Elder Law Attorneys and regularly speaks on elder law and disability topics to senior and professional groups throughout the Bay Area. He and his partner have coauthored the “Consumer’s Guide To Medi-Cal Planning,” a consumer-friendly guide for clients, viewable on the firm’s website at www.LawyerForSeniors.Com.

JOHN A. PAYNE, JR., is in private practice in Los Angeles. His practice consists almost exclusively of trust drafting and administration. He received his B.A. with honors from Baldwin Wallace College in Berea, Ohio, in 1970 and his J.D. with honors from the University of Michigan Law School in 1973. He served in the Judge Advocate General’s Corps of the United States Navy from 1974–1977. He is a past chair of the Trusts and Estates Section of the Los Angeles County Bar Association and has served twice (including currently) on the Executive Committee of that Section. He has lectured for CEB on a number of occasions and spoken about special needs trusts for the Los Angeles County Bar Association, N.B.I., the Los Angeles County Public Counsel’s office, the California Center for Judicial Education and Research, and the State Bar Convention in 2004.

RUTH A. PHELPS received her undergraduate degree in mathematics in 1972 from Immaculate Heart College in Los Angeles. She received her J.D. in 1975 and LL.M. (Taxation) in 2004, both from Loyola Law School. She is a member of the Board of Directors and treasurer of the National Academy of Elder Law Attorneys, a member of the Executive Committee of the Trust and Estates Section of the State Bar of California, a fellow of the American College of the Trust and Estate Counsel, past president of the Southern California Chapter of the National Academy of Elder Law Attorneys, and a member of the Board of Overseers of Loyola Law School, Los Angeles. She is a member of the adjunct faculty of Loyola Law School, teaching elder law. Mrs. Phelps serves as a member of the probate Volunteer Panel of Attorneys for Los Angeles County Superior Court. She is certified as an Elder Law Attorney by NAELA and certified by the California State Bar Board of Legal Specialization as an Estate Planning, Probate, and Trust Specialist.

MARK POPOLIZIO, J.D., is the Vice President of MSP Compliance and Policy at ISO Claims Partners. Prior to joining ISO Claims Partners, Mr. Popolizio practiced workers’ compensation and liability legal defense for 10 years. During this time, he developed a national practice that included Medicare set asides and Medicare compliance. Mr. Popolizio is very active on the national MSA/Medicare educational and training circuit. He is a regularly featured speaker on MSA/Medicare issues before carriers/TPAs, state bar associations, and industry-specific organizations. Mr. Popolizio also has published several articles on MSA/Medicare issues.

RUTH E. RATZLAFF is a sole practitioner in Fresno, specializing in elder law. She received her B.A. in 1972 from Fresno Pacific University, and her J.D. in 1979 from Golden Gate University. She is a frequent author and speaker on elder law topics for the National Academy of Elder Law Attorneys (NAELA), the current president of the Northern California NAELA chapter, and editor of the NAELA News. She has a lifetime adult education teaching credential in vocational skills for the handicapped and is licensed as an administrator of a residential care facility for the elderly.

DAVID L. RICE is the principal attorney of the Law Offices of David Lee Rice, APLC, in Torrance specializing in tax, estate planning, and elder law. He received his B.A. from Arizona State University and his J.D. from Loyola Law School. Mr. Rice is certified by the California State Bar Board of Legal Specialization as a specialist in Taxation Law and by the National Elder Law Foundation as a specialist in Elder Law.

DENNIS M. SANDOVAL is the principal at Dennis M. Sandoval, A Professional Law Corporation, specializing in estate planning, elder law, tax planning and tax controversy. He received his B.A. in Business Administration from California State University at Fullerton, his J.D., cum laude, from Western State University College of Law, and his LL.M. in Taxation Law, cum laude, from Golden Gate University College of Law. Mr. Sandoval serves as the Director of Education for the American Academy of Estate Planning Attorneys. He is a member of the Academy of Special Needs Planners, American Academy of Estate Planning Attorneys, and the National Academy of Elder Law Attorneys. Mr. Sandoval is a certified Estate Planning, Trust & Probate Law Specialist and a certified Taxation Law Specialist by the California State Bar Board of Legal Specialization. He is a certified Elder Law Attorney by the National Elder Law Foundation.

GORDON A. SCHALLER is a partner in the Orange County office of Jeffer, Mangels, Butler & Marmaro (JMBM) LLP. He has been a prominent tax and estate planning attorney in Southern California for over 30 years. Mr. Schaller focuses his practice on tax, estate planning, charitable, and wealth management services. He has represented individuals as well as numerous public and private charitable organizations. Mr. Schaller provides creative solutions for tax, charitable, business succession, and family issues. He is well known throughout the country for developing comprehensive, integrated multi-generational wealth planning, preservation, and management solutions. Mr. Schaller frequently facilitates the interaction of the client’s investment, insurance, tax, and philanthropic advisors to achieve goals-based integrated results. Before joining JMBM, Gordon founded an independent wealth advisory firm. He received his B.S., with distinction, from Iowa State University in 1970 and J.D., magna cum laude, from the University of Minnesota Law School in 1973.

ALLAN A. SENKOW is a sole practitioner with offices in Encino and Oxnard. He focuses his practice in the areas of estate planning, tax and elder law. Mr. Senkow received his undergraduate degree from Loyola University in Chicago and his J.D. from the University of LaVerne College of Law. He also attained his LL.M. in tax, with honors, from Golden Gate University School of Law in San Francisco. He is a member of the American Bar Association, the San Fernando Valley Bar Association, the American Academy of Estate Planning Attorneys, and the National Academy of Elder Law Attorneys. He also serves his community as a volunteer Judge Pro Tem with the Los Angeles Superior Court.

KEVIN URBATSCH is certified by the California State Bar Board of Legal Specialization as an Estate Planning, Probate, and Trust Specialist. He is a principal of the Urbatsch Law Firm P.C. in Walnut Creek. He is a frequent writer and lecturer on special needs trusts and the planning needs of individuals with disabilities. He received his B.S. from Truman State University in 1988 and his J.D. from St. Louis University College of Law in 1993. He is a charter member of the Academy of Special Needs Planners; a member of the National Academy of Elder Law Attorneys; the California Advocates for Nursing Home Reform; the Bar Association of San Francisco, Probate & Trust Section; and the State Bar of California, Trust and Estate Section.

GREGORY WILCOX has his own practice in Berkeley, specializing in public benefits planning and related estate planning. He received his B.A. in 1968 from Haverford College, his Master of Public Affairs degree in 1971 from Princeton University, and his J.D. in 1976 from the University of California, Berkeley, School of Law. Mr. Wilcox is a Board Member and past Chair of the Northern California Chapter of the National Academy of Elder Law Attorneys (NAELA), and a past Member of the National Board of NAELA. He is a current Board Member of California Advocates for Nursing Home Reform, San Francisco, and also serves on its Lawyer Referral Service Advisory Committee. He is member and former Chair of the Elder Law Committee of the Alameda County Bar Association’s Trust and Estates Section. A frequent lecturer to attorneys on public benefits, Mr. Wilcox has also published numerous articles on Supplemental Security Income, special needs trusts, and public benefit planning.

About the 2018 Update Authors

LESLIE ANN BARNETT is an update author of chapter 8. See author bio in the About the Authors section.

CAROL S. BATTAGLIA is an update author of chapters 14, 15, and 17. See author bio in the About the Authors section.

JAMES E. BERGE is the update author of chapters 1 and 2. See author bio in the About the Authors section.

DAVID S. HAMILTON, an update author for chapter 7, is an attorney with Dennis M. Sandoval, A Professional Law Corporation. His practice focuses on estate planning, elder law, probates, conservatorships, and litigation regarding wills and trusts. Mr. Hamilton earned his B.A. in Organizational Leadership from Chapman University in 2009. He earned his J.D., magna cum laude, from the University of La Verne College of Law in 2015. During law school, Mr. Hamilton was the Editor-in-Chief for Volume 36 of the University of La Verne Law Review, and he was the Editor-in-Chief for Volume 20 of the Journal of Law, Business & Ethics.

MELINDA HUNSAKER, an update author for chapter 8, is a managing partner with McGonigle & Hunsaker, LLP. Her practice focuses on Medi-Cal planning, applications, and appeals; estate planning and trust administration, including Special Needs Trusts; and probate, conservatorships, and guardianships. Ms. Hunsaker received her B.A. in Sociology from California State University, Fullerton, and her J.D., cum laude, from Western State University College of Law. She is a Certified Elder Law Attorney (CELA) by the National Elder Law Foundation. Ms. Hunsaker is a member of the National Academy of Elder Law Attorneys, the Orange County Bar Association (OCBA) Trust and Estates section, the OCBA Elder Law section, the J. Reuben Clark Law Society, of which she is also a board member, and the Special Needs Alliance.

TERRY M. MAGADY is the update author of chapter 5. See author bio in the About the Authors section.

RUTH A. PHELPS is the update author of chapter 6. See author bio in the About the Authors section.

MARK POPOLIZIO is the update author of chapter 8A. See author bio in the About the Authors section.

DAVID L. RICE is an update author of chapter 13. See author bio in the About the Authors section.

DENNIS M. SANDOVAL is an update author of chapter 13. See author bio in the About the Authors section.

PETER STERN has his own practice in Palo Alto and is the update author of chapter 16. Mr. Stern received his J.D. in 1981 from Stanford University School of Law. Mr. Stern holds undergraduate and graduate degrees in history from Denison University and Princeton University. Mr. Stern is a member of the Santa Clara County and Silicon Valley Bar Associations. He was elected to the American College of Trust and Estate Counsel (ACTEC) in 2007. Mr. Stern was a member of the Executive Committee of the Trusts and Estates Section of the State Bar of California from 2000–2011 and was its chair from 2007–2008. He served on the Probate and Mental Health Committee of the Judicial Council of California from 2001–2007. He is certified as a specialist in estate planning, trust, and probate law by the California Board of Legal Specialization of the State Bar of California. His current practice deals with a broad spectrum of estate planning, conservatorships, probate, and elder law, including Medi-Cal planning and other legal assistance to families of persons suffering from incapacities. Mr. Stern is the author of California Conservatorship Practice, chap 19 (Cal CEB).

KEVIN URBATSCH is an update author of chapters 3, 8B, and 9–12. See author bio in the About the Authors section.

MARY L. WALTARI is an update author of chapters 14, 15, and 17. Ms. Waltari is a partner in the firm of Battaglia & Waltari in San Diego. She received her B.S. in 1984 from San Diego State University and her J.D. in 1991 from the University of San Diego. After 10 years of practicing in business and securities litigation, Ms. Waltari changed her focus to estate planning. She practices in estate planning, first and third party special needs trusts, as well as conservatorships. Ms. Waltari is a member of the Special Needs Alliance, which is a national network of lawyers dedicated to Disability and Public Benefits Law. She has lobbied in Washington, D.C. for legislation to allow greater access to special needs trusts for individuals. Ms. Waltari is a frequent lecturer on special needs trusts and conservatorships to both professional and parent organizations. She is a member of the San Diego County Bar Association and the William B. Enright Chapter of the American Inns of Court.

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