Author Archives: Sheri

Invite Others to Contribute to the 3rd Party Special Needs Trust

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When parents ponder how to provide for their child with special needs, they sometimes forget one of the key advantages of a 3rd party special needs trust that is created while the parents are still alive: the trust can be the recipient not just of the obvious assets that are available for the child. Members of the extended family (grandparents, aunts, uncles, etc.) and friends can also make gifts to the trust or remember the trust as they plan their own estates.

In addition to the gifts and inheritances from other people who love the child, parents can leave their own assets to the trust in their will or trust. They can also name the trust as a beneficiary of life insurance or retirement benefits. Parents might consider whether making the trust the beneficiary of a life insurance policy makes sense now, while they are still healthy and insurance rates are low.

An attorney whose practice focuses on helping families with children who have special needs can assist you in setting up a trust that can receive such gifts and ensuring the gifts are properly allocated so they do not jeopardize any public benefits the child may receive.

* The information contained in this Blog is intended for general information and educational purposes only and does not constitute legal advice or an opinion of counsel.

Child Support and Supplemental Security Income

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Supplemental Security Income (SSI) is a federal program that provides cash assistance to people with disabilities who have very limited incomes and resources. In most cases, SSI recipients may also obtain a much more important benefit — automatic Medicaid eligibility. Because access to SSI depends on a beneficiary’s income and resources, even small increases in income can cause a reduction or loss of SSI benefits. Unfortunately, when an SSI beneficiary’s parent is ordered to pay child support, those payments can end up ruining the beneficiary’s access to government benefits.

Child support payments are a problem for SSI recipients because the Social Security Administration (SSA) treats a substantial portion of a child support payment as unearned income for purposes of calculating SSI benefits. Receipt of unearned income results in a dollar-for-dollar reduction in an SSI benefit, so, for instance, an SSI beneficiary who receives $200 in unearned income has her SSI benefit reduced by $200 in the month that the income is received. If the amount of unearned income is greater than the entire SSI benefit (for example, when someone has a $500 monthly SSI benefit and she receives $600 in unearned income), the beneficiary loses SSI, and, potentially, Medicaid.

Fortunately, the SSA does not always count an entire child support payment as unearned income. If a child support recipient is younger than 18 (or 22, if she is still in school), and if the recipient receives the payment from an absent parent (defined as a parent who does not live in the same household as the child), then the SSA considers only two-thirds of the payment as unearned income. However, this is small consolation for an SSI beneficiary who has her assistance reduced or terminated despite the one-third break.

There are several ways to handle child support for a child with special needs. If the amount of the child’s SSI benefit is clear at the time of the divorce, it may be possible to agree upon a child support settlement that reduces, but does not eliminate, SSI. (Of course, the benefit of receiving SSI and Medicaid has to be weighed against the advantages of a larger child support payment. In some cases, it may be better to forgo SSI and receive a larger child support award instead.)

In other cases, it may make sense to create a special needs trust for the child’s benefit. The court can then order the non-custodial parent to make support payments directly into the special needs trust. The trust will shelter the income and allow the child to retain SSI benefits, and, in many cases, the support payments can be retained in the trust if not immediately used. Unfortunately, these particular special needs trusts are not perfect because they must contain a “payback provision” that allows the government to recover its Medicaid expenses from the unused assets in a deceased SSI beneficiary’s trust. However, if properly managed, there may not be a large sum remaining in the special needs trust when the beneficiary passes away.

If you are in the middle of a divorce, or if previously agreed-upon child support payments are wreaking havoc with your child’s SSI benefits, talk to your special needs planner about your options immediately.

* The information contained in this Blog is intended for general information and educational purposes only and does not constitute legal advice or an opinion of counsel.

Choosing an Investment Advisor for a Special Needs Trust

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Trustees of special needs trusts have a duty to properly manage the funds in their care. However, most trustees, especially non-professional ones, are not sophisticated investors and they should not be directly managing the investment of large sums of money. This does not mean that the trustee of a special needs trust should simply toss the trust funds into a savings account and be done with it. On the contrary, a trustee needs to grow the trust principal as best he can, keeping in mind the current and future needs of the trust’s beneficiary. In many cases, this means that the trustee should hire a professional investment advisor.

There are countless investment professionals out there to choose from — so many, in fact, that the choice of an investment advisor can quickly become overwhelming. The Web site of the Securities and Exchange Commission (SEC)offers several tips for beginning investors who are seeking to hire an investment professional. According to the SEC, investors should know exactly what services they are looking for prior to interviewing advisors, and they should find out what services their potential investment advisor provides, how much those services cost, and how and when the advisor gets paid.

These threshold questions are important, but the SEC also recommends asking each potential advisor a battery of specific questions, including questions about their experience, education and employment history, whether the advisor is limited to recommending a certain set of products and whether the advisor is registered with the SEC or with a state licensing agency. Trustees should also understand the various types of fee structures utilized by investment advisors, including a percentage fee based on the total assets under management, an hourly system, a fixed fee or a commission based on the products sold.

Trustees of special needs trusts have slightly different needs than typical investors, and, if possible, they should work with advisors who are flexible and who already have experience investing the funds of special needs trusts. Trustees should also be aware that hiring a poor financial advisor could lead to a breach-of-fiduciary duty claim against the trustee, so more detailed background checks and due diligence are required than if the trustee were an individual investor.

* The information contained in this Blog is intended for general information and educational purposes only and does not constitute legal advice or an opinion of counsel.

Centers for Disease Control (CDC) Updates Recommendations for 65+ DPT Vaccinations

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The Center for Disease Control (CDC) recently updated their recommendation for DPT vaccinations.  Since 2005, the Advisory Committee on Immunization Practices (ACIP) has recommended a tetanus toxoid, reduced diphtheria toxoid, and acellular pertussis (Tdap) vaccine booster dose for  those adults aged 19-64 years who have not yet received a dose .

In October 2010, despite the lack of an approved Tdap vaccine for adults aged 65 years and older, ACIP recommended that unvaccinated adults aged 65 years and older be vaccinated with Tdap if in close contact with an infant, and that other adults aged 65 years and older may receive Tdap.

In July 2011, the Food and Drug Administration (FDA) approved expanding the age indication for Boostrix (GlaxoSmithKline Biologicals, Rixensart, Belgium) to aged 65 years and older.

In February 2012, ACIP recommended Tdap for all adults aged 65 years and older. This recommendation supersedes previous Tdap recommendations regarding adults aged 65 years and older.

* The information contained in this Blog is intended for general information and educational purposes only and does not constitute legal advice or an opinion of counsel.

10 Tips to Avoid International Scams

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Mass marketing fraud is a significant source of income for international crime rings. Con artists ignore geographic boundaries to reach out to potential victims by phone, email, postal mail, and through the Internet, and then trick them into sending money or giving out personal information. According to the Federal Trade Commission, the nation’s consumer protection agency, Americans report losses of more than a billion dollars a year to these frauds.

These con artists are successful because they can be clever, but knowledgeable consumers can avoid these scams.

Here are 10 things you can do to stop a scam:

  1. Keep in mind that wiring money is like sending cash: the sender has no protections against loss. Con artists often insist that people wire money, especially overseas, because it’s nearly impossible to reverse the transaction or trace the money. Don’t wire money to strangers, to sellers who insist on wire transfers for payment, or to someone who claims to be a relative in an emergency (and wants to keep the request a secret).
  2. Don’t send money to someone you don’t know. That includes an online merchant you’ve never heard of — or an online love interest who asks for money or favors. It’s best to do business with sites you know and trust. If you buy items through an online auction, consider a payment option that provides protection, like a credit card. Don’t send cash or use a wire transfer service.
  3. Don’t respond to messages that ask for your personal or financial information, whether the message comes as an email, a phone call, a text message, or an advertisement. Don’t click on links in the message, or call phone numbers that are left on your answering machine, either. The crooks behind these messages are trying to trick you into giving up your personal information. If you get a message and are concerned about your account status, call the number on your credit or debit card — or your statement — and check it out.
  4. Don’t play a foreign lottery. First, it’s illegal to play foreign lotteries. Second, it’s easy to be tempted by messages that boast enticing odds in a foreign lottery, or messages that claim you’ve already won. Inevitably, you’ll be asked to pay “taxes,” “fees,” or “customs duties” to collect your prize. If you send money, you won’t get it back, regardless of the promises.
  5.  Don’t agree to deposit a check from someone you don’t know and then wire money back, no matter how convincing the story. By law, banks must make funds from deposited checks available within days, but uncovering a fake check can take weeks. You are responsible for the checks you deposit: When a check turns out to be a fake, it’s you who is responsible for paying back the bank.
  6. Read your bills and monthly statements regularly—on paper and online. Scammers steal account information and then run up charges or commit crimes in your name. Dishonest merchants sometimes bill you for monthly “membership fees” and other goods or services you didn’t authorize. If you see charges you don’t recognize or didn’t okay, contact your bank, card issuer, or other creditor immediately.
  7. In the wake of a natural disaster or another crisis, give to established charities rather than one that seems to have sprung up overnight. Pop-up charities probably don’t have the infrastructure to get help to the affected areas or people, and they could be collecting the money to finance illegal activity.
  8. Talk to your doctor before buying health products or signing up for medical treatments. Ask about research that supports a product’s claims—and possible risks or side effects. Buy prescription drugs only from licensed U.S. pharmacies. Otherwise, you could end up with products that are fake, expired or mislabeled — in short, products that could be dangerous.
  9. Remember there’s no such thing as a sure thing. If someone contacts you promoting low-risk, high-return investment opportunities, stay away. When you hear pitches that insist you act now, guarantees of big profits, promises of little or no financial risk, or demands that you send cash immediately, report them to the FTC. For more information about investment fraud, click here.
  10. Know where an offer comes from and who you’re dealing with.Try to find a seller’s physical address (not just a P.O. Box) and phone number. With VoIP and other web-based technologies, it’s tough to tell where someone is calling from. Do an internet search for the company name and website and look for negative reviews. Check them out with the Better Business Bureau.One bonus tip: Visit OnGuardOnline.gov to learn how to avoid internet fraud, secure your computer and protect your personal information.

For More Information

Visit the Federal Trade Commission (FTC) website. The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them.

 

 

* The information contained in this Blog is intended for general information and educational purposes only and does not constitute legal advice or an opinion of counsel.

It’s Possible to Discharge a Student Loan Because of Disability

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As of 2011, the average college student (graduate and undergraduate) left school with $23,300 in debt. Repayment of student loans has always been difficult, but with the economy still working its way back, many recent graduates have no jobs and no way to pay back their loans. People with disabilities that prevent them from working face an even more desperate set of challenges.

Fortunately, people with disabilities can apply for disability discharges of loans from the following programs: Federal Family Education Loans (FFEL), Perkins Loans, William D. Ford Federal Direct Loans (Direct Loans), and Teacher Education Assistance for College and Higher Education (TEACH) Grants.

To qualify for a disability discharge, a borrower must show that she has a physical or mental impairment that will either result in death or has lasted or will be expected to last more than 60 months. (Different, less stringent rules apply to veterans with disabilities.) The borrower’s doctor must submit paperwork to the U.S. Department of Education certifying the borrower’s condition, and, if approved, the loan will be conditionally discharged.

Once a loan is conditionally discharged, the borrower must not engage in employment that results in income exceeding the federal poverty rate for a family of two for the next three years. Once the three-year period has passed, the loan will be completely discharged.

No one wants to default on his obligations, but if a borrower cannot repay a loan due to disability, he should promptly apply for a disability discharge so that the funds he would normally spend on loan repayment can be directed towards future care.

* The information contained in this Blog is intended for general information and educational purposes only and does not constitute legal advice or an opinion of counsel.

Social Security to Add Adult Huntington’s Disease to Compassionate Allowances Program

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Compassionate Allowances are a way of quickly identifying diseases and other medical conditions that invariably qualify under the statutory standard for disability. The Compassionate Allowances program fast-tracks disability decisions to ensure that Americans with the most serious disabilities receive their benefit decisions within days instead of months or years.

The Social Security Administration will add symptomatic Huntington’s Disease to its Compassionate Allowances program for adults by the end of the year. The expedited disability process will identify people with significant symptoms of this devastating neurological disease. Adult Huntington’s Disease will accompany the designation of Juvenile Huntington’s Disease as a Compassionate Allowance condition, which will be effective next month.

* The information contained in this Blog is intended for general information and educational purposes only and does not constitute legal advice or an opinion of counsel.

 

 

 

 

 

Medi-Cal vs. Medicare – What’s the Difference?

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People with special needs may qualify for a variety of government benefits, including Medi-cal and Medicare. It can be difficult to tell the two programs apart, especially because their names are so similar. However, Medi-Cal and Medicare, which account for the lions share of federal spending on health care, are dramatically different programs with different eligibility requirements and benefits. Here’s how the two programs differ.

Means-Tested Means Medi-Cal

Medi-Cal is a state and federal partnership program that gives medical coverage to selected groups with low-incomes — children, pregnant women, parents of eligible children, people with disabilities, and elderly in need of long-term care. In order to qualify for Medi-Cal, a person must generally have a low monthly income, and in certain cases he may not have many resources in his own name. Because eligibility is based on a person’s income and assets, Medi-Cal is known as a means-tested program.

Medicare is a pure health insurance system that is open any member of a qualifying group, regardless of income or assets. Although people over age 65 make up the majority of Medicare beneficiaries, younger people with disabilities can also qualify for Medicare benefits if they have been eligible to receive Social Security Disability Insurance (SSDI) benefits for at least two years. Even people who have not paid into the Social Security system could qualify for benefits on a parent’s work record in certain situations.

Medical Coverage Varies Depending on the Program

Medicare, which is run primarily by the federal government, offers three main types of coverage. Part A covers hospital visits and some follow-up care, Part B covers doctor visits and other outpatient care, and Part D provides prescription drug coverage. (Part C, also known as Medicare Advantage, is a managed care alternative to regular Medicare that is offered by private insurers working with the federal government.) Although Medicare covers a variety of treatments and physicians, it does not pay for long-term care in a skilled nursing facility other than for short rehabilitation stays, and it usually does not completely cover a beneficiary’s hospital or doctor costs. To make up for these shortfalls, many Medicare recipients purchase private Medigap insurance plans that provide coverage for services or costs that Medicare does not cover.

Medi-Cal is a joint program between the state and the federal government, and each state is given much wider latitude to pick and choose the programs it offers residents. While we refer to this program as Medi-Cal in California, it is called Medicaid in other states. Some Medicaid programs are very comprehensive and cover everything a patient could need, while other Medicaid programs, especially so-called Medicaid waiver programs, target specific demographic groups, like people with developmental disabilities. Medicaid is, however, the primary federal insurer for long-term care.

To Payback or Not to Payback

Because Medi-Cal is a means-tested program, a potential beneficiary with too many resources (assets) may have to place some of his funds into a special needs trust in order to obtain benefits. There are two main types of special needs trusts that hold a beneficiary’s own funds: first-party special needs trusts and pooled trusts. In both cases, when the trust beneficiary dies, the funds remaining in the trust must be used to pay back the government for services received from Medi-Cal.

Because Medicare is an insurance program, a beneficiary is not usually required to repay the government when she receives benefits. However, in some cases involving workers compensation and other claims, a Medicare or potential Medicare beneficiary must set up a Medicare set-aside trust that is designed to cover a portion of his future care.

Dual Eligibles

It is possible to qualify for both Medi-Cal and Medicare at the same time, and people who receive benefits from both programs are called dual eligibles. Unfortunately,Medi-Cal and Medicare were not designed to work together, and coordination is not always easy. In many cases, dual eligibles have their Medicare premiums paid by the Medi-Cal  program.

* The information contained in this Blog is intended for general information and educational purposes only and does not constitute legal advice or an opinion of counsel.

 

SCAM ALERT: Federal Trade Commission (FTC) Issues Alert for Scams Relating to Recent Affordable Care Act Decision

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Just after the U.S. Supreme Court ruled on the Affordable Care Act, scam artists began working the phones. The scam works as follows: Claiming to be from the government, scam artists tell listeners that under the Affordable Care Act, they need to verify some information. For example, they might have the routing number of the person’s bank, and then use that information to get the person to reveal the entire account number. Other times, they have asked for credit card numbers, Social Security numbers, Medicare ID, or other personal information.

The Federal Trade Commission, the nation’s consumer protection agency, has again issued a warning not to give out personal or financial information in response to unsolicited phone calls, emails, or knocks on your door. If you get a call from someone who claims to be from the government and who asks for your personal information, hang up. It’s a scam. The government and legitimate organizations with which you do business have the information they need and will not ask you for it. Then, file a complaint at the Federal Trade Commission Website  or call 1-877-FTC-HELP. If you think your identity has been stolen, visit the Federal Trade Commission Website or call 1-877-ID-THEFT. You also can file a complaint with the California Attorney General.

* The information contained in this Blog is intended for general information and educational purposes only and does not constitute legal advice or an opinion of counsel.