Archive for the ‘Elder Law’ Category

Supplemental or Special Needs Trusts

Monday, December 20th, 2010

by: Rebecca Proctor, Elder Law Attorney

Question:
I have an adult daughter who has autism. While speaking with a friend, she said I should check with an attorney about setting up a special needs trust for my daughter so I could have peace of mind that she will be cared for when I die. Can you give me some information about a special needs trust, how it works and whether I should have a special needs trust for my daughter?

Answer:
Quite often, parents with adult children have already discovered that in order to receive governmental benefits for their child, the child must have very limited assets and income available to them. However, as you have probably found, governmental benefit programs just simply do not provide all that is needed.

Usually disabled persons can qualify for government benefits derived from Social Security Disability Income (SSDI), public housing or Medicaid. However, there are very strict rules for qualifying for these benefits. SSDI assists in the everyday living needs of a qualified person. Medicaid provides for the health care of persons who don’t have private insurance or cannot qualify for Medicare. Medicare is a government-run health care system program which is provided to persons with work related benefits. To be eligible for Medicaid, you must be either 65 or disabled. However, as stated, one must have very limited income and resources to qualify.

All trust structures, which includes a special needs trust, basically are a form of ownership of various assets where one person, the trustee, manages trust assets according to the terms of the trust document. A trustee must follow the provisions of the trust and only use the funds or assets according to the terms of the trust and, only for the benefit of the person or persons who are the recipients/beneficiaries of those assets, as has been determined by the trust terms. A “Special Needs or Supplemental Needs Trust” is a trust created for a physically or mentally disabled person, whether it is an adult or child, and for those who will need resource, other than governmental benefits, to care for them over their lifetime.

Many disabled individuals receive critical governmental benefits that they cannot afford to pay for in the private sector. Further, most special needs persons are not usually capable of managing their own financial affairs. This is where a special needs trust can assist in giving a parent peace of mind. Special needs trusts are primarily used to assist disabled persons, someone like your daughter and who are possibly receiving governmental benefits such as SSI or Medicaid. It is designed to benefit those persons with limited income, few resources, and receiving governmental benefits which do not or cannot supply all the “special or supplemental” needs of that disabled individual.

Generally special needs trusts fall into two categories, self settled trusts and third party trusts. Self settled trusts are trusts created by someone for themselves, using their individual assets, possibly from an insurance settlement following an accident which rendered them disabled. A Third party trust is usually a spouse of a disabled person, a parent for a disabled person, or some other third party (possibly a grandparent) which sets aside funds or resources for the benefit of another. With a special needs trust in place, a third party can provide funds for various needs or lifestyle betterment for the disabled individual, while preserving the individual’s access to governmental benefits and health care.

Therefore, if a third party or parent who wants to make sure that their loved one is provided for above and beyond the governmental benefits they receive, then a supplemental needs trust can be a good choice. Funds to set up a Supplemental Needs Trust can come from a variety of sources, such as an inheritance (funds passed on after death), a personal injury claim or from investments provided by a spouse, parent or other third party.

The benefits received by the special needs individual from a supplemental needs trust need not jeopardize their governmental benefits. A beneficiary of a properly drafted special needs trust never has a legal claim to the property (funds) in the trust. The funds are used for their various needs or to enhance their lifestyles that are not provided by the governmental programs. Such funds can be used for transportation, social activities, classes or just general overall purchases of daily items or activities.

If after reading this brief review on Special Needs Trust, you have a question, please feel free to call me at 364-2417.

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Guardianship – Quick Review

Friday, December 17th, 2010

By, Rebecca J. Proctor, Esq.

Guardianship is a court ordered proceeding in which a person, either voluntarily or involuntarily relinquishes their rights to another person called a legal guardian who will then have the authority to make a person’s decisions concerning their physical person and/ or property.

A Guardianship proceeding can be initiated by any interested adult on behalf of another if they genuinely feel that a person is not capable to appropriately care for themselves either physically or financially. If a person is either mentally or physically incapacitated, or both, and appears not to be capable to protect themselves from neglect, abuse or exploitation, then a petition can be filed with the Court which will begin a legal process to assist that incapacitated person.

In Florida, once the Petition is filed, a Court with legal jurisdiction will appoint an examining committee of (3) professionals who will examine the person and prepare a report for the Court. Upon the determination of the evidence, the examining committee reports and other evidence presented, a Judge may make a determination that the person is incapacitated and appoint a Guardian. So if one finds themselves or another in need of assistance or cannot make health care or financial decisions, then a guardianship proceeding may be recommended for that person.

If after reading this brief review, you feel that you would like to meet to discuss your legal matter further with Rebecca Proctor, then, please feel free to contact her at the Kirk Pinkerton, PA Law Firm at 941-364-2417.

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Ethical Representation of the Elderly Client

Sunday, December 12th, 2010

By: Rebecca Proctor, Elder Law Attorney (941-364-2417)

As a practicing attorney representing many elderly clients, I am cognizant of my ethical duties to my clients. Among the important influences that affect my professional ethics in the practice of law are the Ethical Rules that are mandated by the Florida Bar.

Four Ethical Rules that I believe directly affect the representation of the elderly client are:

1. Rule 4-1.14 Clients under a Disability
2. Rule 4-1.2 Objectives and scope of Representation
3. Rule 4-1.6 Confidentiality of Information
4. Rule 4.1.5 Fees and Costs for Legal Services

How does the first rule “Clients with a Disability” involve ethics in my practice? Disability can mean elderly clients with physical or mental disabilities and incapacities within varying degrees. Many times I have persons come into my office that may be a little slower in focusing or reasoning or may have trouble understanding the legal concepts that affect them. I must be aware of that and be able to explain those legal concepts or rules that affect them in a way that they can understand their legal problems and are able to make the best and most beneficial decision for themselves. I cannot just tell an individual what I think is best for them, but must let them make the decisions for themselves.

Likewise, being able to explain the objectives and scope of representation to a client who is very aged or partially incapacitated can be a challenge. When a person must follow a legal rule or procedure in order to accomplish their objectives, it most definitely involves having to use one’s professional ethical judgment and discretion. Being able to thoroughly explain the objectives of your legal representation, taking the time for someone to understand and also knowing if that person doesn’t really understand but may just be agreeing to whatever you say are some of the concerns that one must be aware of in their representation of the elderly. I must by my following my moral code and professional ethical rules provide a client who has some physical or mental disability with as much information and allow them as much individual autonomy that I would for a client who is not impaired or has no disability.

As an attorney, I am bound by the Rule of Confidentiality. Many times elderly persons have individuals in their family that they do not want to know their business, they do not trust them, but they may have to depend on that family member in their daily living. For example, I had an 82 year old client who owned a home and who also lived with the daughter in that home. She wanted to leave the home to her daughter when she passed, but she did not want the daughter to know about the gift before she passed, nor did she want the daughter to know how much money or what kind of investments she currently held. The daughter had a history of impersonating her mother in order to obtain personal information on the mother. My elderly client and I developed a system of key words for our telephone calls so I would know if it was in fact my client or her daughter calling me. This was our way to develop a method to maintain client confidentiality.

The Rule relating to the charging of fees and costs for legal services is directly involved with having an ethical practice. I cannot charge exorbitant or excessive fees. A client that has a disability and who may not know what a reasonable fee for a legal services would be, must be dealt with ethically. As you could imagine, if one does not practice ethically, a client with a mental disability or incapacity could be easily taken advantage of or an unethical person could collect a larger fee knowing that the elderly client would never know or suspect.

In conclusion, these ethical rules that I have set forth in this article can easily be applied to most all professions. In business and practice,you have to understand the inabilities or disabilities that elder persons may have. You must be sure to thoroughly explain and describe what services or products you are going to provide to them. Further, one should always keep the transactions confidential and you must never take excessive fees for your services or products just because you can, even though there is not a professional ethical rule that binds you.

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