Source: http://www.judicial.state.sc.us/whatsnew/displaywhatsnew.cfm?indexID=753
Timestamp: 2015-07-31 01:03:06
Document Index: 724981208

Matched Legal Cases: ['§ 62', 'art 416', '§62', '§62', '§62', '§62', '§62', '§62', '§62']

Re: Revised Minor Settlement Procedure ORDER
D. If net amount is under $10,000 and a conservator exists, require payment to conservator and notice to the Probate Court which appointed conservator, or if no conservator, require that payment be made in accordance with § 62-5-103. III. ATTORNEY
These trusts allow a disabled minor or disabled adult who receives certain governmental benefits to continue to be eligible for the benefits2 even if the individual is awarded and receives settlement proceeds from civil actions, by way of inheritance, or by other funding sources. Normally, the receipt of additional proceeds would disqualify the individual from being eligible for governmental benefits. SNTs and Pooled Fund Trusts carve out an exception which allows the individual both to receive the proceeds and to maintain eligibility for governmental benefits. The premise behind a SNT and Pooled Trust is that the “extra” proceeds from the civil action or inheritance are available for specific supplemental items or supplemental assistance to the special needs individual. That is, the “extra” trust funds can be used to pay for things that are above or in addition to the items provided by governmental benefits. To that end, the funds in the SNT or Pooled Trust can be used by the Trustee to purchase goods or pay for services for the special needs individual (hereinafter the “Trust Beneficiary” or “Beneficiary”) that would not normally be covered by governmental benefits (anything from medications not covered by Medicaid to a home to a vacation—items considered “extra” to what is provided by the governmental benefits3). As a compromise to the carve-out exception, the SNT must direct that, at the death of the Trust Beneficiary (special needs individual), any unused funds in the trust must first be used to pay back the state for the Medicaid services that had been provided to the Trust Beneficiary during his life. A Pooled Fund Trust has the same “pay-back”-type provisions but it is slightly different in that it may have different allocations for pay-back provisions. For example, in some of the pooled trusts established by local Disabilities and Special Needs Boards, 20% of any funds remaining in the Beneficiary’s sub-account (after payment of the Beneficiary’s final expenses) are used to reimburse the non-profit for its administrative services. The remaining 80% is distributed pro-rata to the sub-accounts of the remaining Pooled Fund Trust Beneficiaries. The state will only be repaid for the Medicaid services provided to the Trust Beneficiary during his lifetime if the amounts remaining in the Beneficiary’s sub-account after his death are deemed not to be “retained by the Trust” pursuant to 42 U.S.C. 1396 d(4) (C). Definition of “disabled minor” and “disabled adult”
SNT and Pooled Fund Trusts are created and established specifically for “disabled minors” and “disabled adults” as defined by law. A minor is “disabled,” as defined by 42 U.S.C. 1382 c(a)(3)(C), if the minor has a medically determinable physical or mental impairment, which results in marked and severe functional limitations, and which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. “Disabled adult” is defined by 42 U.S.C. 1382 c(a)(3)(A) as a person who is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months. Disability determinations are regulated further at 45 CFR Part 416. The Probate Court is not responsible for making these determinations, but a disability finding may be necessary for Probate Court jurisdiction pursuant to protective proceedings in SC Code Ann. §62- 5-401 and §62-5-402. SC Code Ann. §62-1-302, grants the Probate Court exclusive original jurisdiction over the protection of minors and incapacitated persons. Incapacitated person, as defined in SC Code Ann. §62-5-101, includes a person impaired by disability. Disability, as described in SC Code Ann. §62-1-201, is a basis for a protective order which then can allow for the creation and establishment of a SNT or a Pooled Fund Trust by the Probate Court.
Note: A SNT or a Pooled Fund Trust may be appropriate in lieu of a traditional Conservatorship. Creating a SNT
5) To the extent that amounts remaining in the Trust Beneficiary’s account upon the death of the Beneficiary are not retained by the trust, the trust pays to the State from the remaining funds in the account an amount equal to the total cost of medical assistance paid on behalf of the Beneficiary under the State plan and in accordance with the provisions of the particular Pooled Fund Trust. A. Considerations:
When deciding whether a SNT or a Pooled Fund Trust is appropriate, the Court should consider all relevant factors, including, where appropriate, the following: 1.) The amount of funds or other assets involved. Is this amount sufficient to disqualify the Trust Beneficiary from public benefits? In order to make this evaluation, the Judge will need to know, or be informed by the parties, what benefits the person receives or wishes to receive and the income and resource limitations for those programs. For example, SSI currently has a $674.00 per month income limit and a $2,000.00 countable resource limit. Under ABD Medicaid there is a countable resource limit of $6,600.00. A child covered under one of the low income programs will be considered part of a budget group (certain people living in the home) for purposes of determining income and resource limitations. Typically, the budget group can have combined countable resources of $30,000.00. Income varies according to the number of people in the budget group.
3.) What is the source and purpose of the funds and assets? 4.) If the Trust Beneficiary is receiving Medicaid (but not SSI), has the SNT been pre-approved by the S.C. Department of Health and Human Services (“DHHS”)?
5.) Who is the proposed Trustee? Is that person or institution reliable and cognizant of the rules relating to administration of SNTs? Should a parent or guardian serve as a co-Trustee or Special Trustee? 6.) Does the SNT contain appropriate restrictions to ensure the funds or other assets are used for the benefit of the Trust Beneficiary and not for other family members? Are there controls in place to ensure that the funds and/or assets are used in accordance with current regulations and solely for the benefit of the Trust Beneficiary and not benefit more than incidentally the Trustee or other persons?
2.) If a SNT is or may be appropriate for all or a portion of the funds and/or other assets, counsel for the Trust Beneficiary should arrange for the creation of an appropriate SNT. A SNT is a complicated, specialized legal document that must conform to multiple federal and state requirements; they should only be prepared by a professional who is familiar with SNT requirements. 3.) The SNT should be approved by DHHS if the Trust Beneficiary is receiving Medicaid, but not SSI. DHHS prefers to receive the SNT after it has been executed. If the Court is establishing the SNT, approval by DHHS may occur during the pendency of the SNT. The SNT must be submitted to DHHS through the Trust Beneficiary's local county eligibility caseworker. The caseworker will notify the submitting attorney or the Court when the Trust is approved or disapproved. 4.) DHHS does not review or approve SNTs for Trust Beneficiaries who are not Medicaid applicants or beneficiaries. In SC, an SSI Beneficiary is automatically eligible for Medicaid. When the source of Medicaid eligibility is through SSI eligibility, approval by DHHS of a SNT is not binding on Social Security and, therefore, these Trusts should not be submitted to DHHS for approval. 5.) Since Medicaid is entitled to recover from the Trust corpus its payments on behalf of a Medicaid recipient who is a Trust Beneficiary, including those recipients whose eligibility is derived through the receipt of SSI, a copy of the executed SNT must be sent to:
Division of Policy and Planning Attention: SNT Coordinator
7.) The Court in which the settlement action is approved should direct that the net settlement funds be paid directly into the SNT approved by the Probate Court (to ensure that the Trust Beneficiary is not inadvertently disqualified by actual or constructive receipt of the settlement funds) and, in the event the Probate Court determines that the SNT is not appropriate for the Trust Beneficiary, the Court in which the settlement action is approved should direct that the net settlement funds be paid to the Trust Beneficiary's conservator appointed by the Probate Court. 8.) Notwithstanding the provision under S.C. Code §62-5-433 (that provides that jurisdiction for approval of settlement of claims in favor of or against minors or incapacitated persons may be in the Circuit Court), the Probate Courts of this state have exclusive original jurisdiction under S.C. Code §62-1-302(a)(2) over all subject matter related to the protection of minors’ property and incapacitated persons’ property, which includes the creation and establishment of a SNT and the approval of the transfer of a minor or incapacitated person’s property, i.e., funds and/or other assets, to a SNT. Therefore, if the settlement is conducted in the Circuit Court, the proper course of action is for the Probate Court to create and establish the SNT, if no parent, grandparent, or legal guardian is available, and approve the funding of the SNT with the Trust Beneficiary’s anticipated net settlement funds prior to the final approval of the settlement by the Circuit Court.
1 A Pooled Fund Trust may be a good option for a special needs individual who is receiving a “smaller” amount of settlement proceeds (≤ $25,000), making it cost-prohibitive for a private SNT but more economical to join a Pooled Fund Trust. The Pooled Fund Trust has a Trustee who manages the funds and who responds to requests for use of funds for the Pooled Fund Trust Beneficiary, ensuring that any pay-outs are in compliance with the allowed rules. 2 The governmental benefits that come into play are income-based or asset-based benefits, such as Supplemental Security Income (“SSI”) and Medicaid. These benefits have resource limits that cannot be exceeded. An increase in income or assets that surpasses the resource limits will render the special needs individual ineligible for continued governmental benefits.