Posts Tagged ‘majority’

What Preparation Do I Need For My Son’s 18th Birthday?

APRIL 4, 2011 VOLUME 18 NUMBER 12
My son will be 18 in a little more than a year. He is in high school, in the special education program. What do I need to do to prepare for his eighteenth birthday?

Excellent question. Assuming it is limited to legal matters (those are the only ones we’re particularly good with), we have a number of things for you to consider:

Guardianship. You may need to seek a guardianship in order to maintain your ability to make medical decisions for your son. You will undoubtedly begin hearing from all sorts of concerned (and mostly well-informed) people about how difficult and expensive that process is, and how you need to get a head start on it. Relax. The news is mostly good.

Arizona, like a number of other states, gives family members the ability to make medical decisions for an incapacitated relative. Parents have a high priority under Arizona law. Of course, if you are no longer married to your son’s other parent, that can mean a conflict over who will be first. It may be perfectly obvious to you, but the law assumes you and your ex have equal rights until a court decides otherwise — and a childhood custody order does not resolve the question.

Assuming you get along with your ex, or you are still married to your son’s other parent, does that mean no guardianship is necessary? Not exactly. There are some circumstances where it still might be appropriate to seek guardianship; you will want to consult with a lawyer who knows something about guardianship to review the concerns and options.

Some parents go ahead and file for guardianship even if it may not be completely necessary. They reason that they want the security of knowing they have legal authority, and that is not a foolish mistake. Other parents reason that they want to maintain as much autonomy and self-determination for their children as possible, despite whatever limitations they might have. That is also not a foolish point of view. What does that mean? Every family circumstance is a little bit different, and good advice is needed.

If you do decide to file for guardianship, there probably is no rush. The Arizona legislature is right now considering changes that would allow you to file before your son turns 18, but until those changes are final (perhaps by September of this year) you can’t really file until after that anyway. The process will take about six weeks, and probably cost about $1,500 to $2,000 in legal and filing fees. That assumes, of course, that it is clear that your son needs a guardian, and that he doesn’t disagree.

One thing that would help with the decision-making process, and get everything going more quickly: get a letter from your son’s physician that indicates whether the doctor thinks he can make medical and personal decisions on his own. That letter will be necessary for the permanent hearing anyway, and it will help us counsel you on whether and how to proceed.

Child Support. Is there an old child support order requiring your ex to pay you monthly? Arizona permits child support to continue past age 18 if the child is disabled. You need to jump on this issue right away.

One caveat: child support (whether it is paid to you, directly to your son or to someone else on his behalf) will probably keep him from getting Supplemental Security Income (SSI) payments — unless you plan carefully. This is not a simple issue, and few divorce lawyers have dealt with the kind of planning necessary to keep child support and SSI both coming in. We need to talk about this one at some length.

Social Security. Is your son now receiving Supplemental Security Income (SSI) payments? If not, it may be because of your assets and income, which are imputed to him for eligibility purposes. If that is the case, your assets and income will no longer count once he turns 18. If he is “disabled” (and that’s different from “has a disability”) then it would be good to get that established and get SSI benefits flowing immediately.

Promptly after your son’s 18th birthday you should apply for SSI for him. If he gets it, he will automatically qualify for AHCCCS (Arizona’s Medicaid program). That will also help assure that he gets services from the Division of Developmental Disabilities (DDD) if his disability is developmental.

There are a number of things to keep in mind once your son’s SSI eligibility is set:

  • If he lives with you without paying rent (or paying toward the costs of his food and shelter), his SSI will be reduced by about $250 per moth (the number changes with the maximum SSI benefit rate). If that happens, you might consider charging rent as a way of increasing his benefit — but it won’t change his eligibility for AHCCCS.
  • In any event, it is important to get his disability established by Social Security before he turns 22. If you do, then he will probably qualify for dependents’ and survivors’ benefits under your Social Security account. That means that when either of his parents retires, his SSI may suddenly switch to Social Security (or a combination of Social Security and SSI) and he will qualify for Medicare coverage instead of (or in addition to) his AHCCCS coverage. Similiarly, upon the death of either parent his benefit will probably bump up again.
  • If you help your son secure employment, perhaps in a family business or other friendly and unchallenging environment, he may lose his future eligibility for Social Security benefits on your account. That might not be best for him long term. Same result if he marries — it can cut off his future dependents’ or survivors’ benefits.

Graduation. You may want to have your son graduate with his high school class. It is often a matter of pride and self-respect, and friends and family may have encouraged that perspective for years. Unfortunately, graduation might not be best for your son.

Programs offered through the school systems are often more appropriate, more easily available and better staffed than those offered to adult participants in DDD-sponsored programs. Usually students who have been identified as developmentally disabled can stay in high school until age 22; that is often in their best interests. You might talk to lawyers familiar with the local social service scene, and to parents of other children who have been through the graduation decision.

UTMA Accounts. Do you have an old Uniform Transfer to Minors Act account you (or maybe your parents) set up for your son years ago? It’s time to deal with that, too. The good news: you actually still have a couple years. Rather than ending at 18, they mostly end at age 21. But when that day arrives, the UTMA account will keep your son from receiving SSI benefits and maybe even AHCCCS. Let’s get that problem dealt with in advance.

Estate Planning. When your son was still a minor it was important that you sign a will identifying your choice for his guardian if you had died. Thank goodness you are going to make it to his majority — but the problem hasn’t gone away. You still need to do your own estate planning, or to update it if you have already done it.

Have you created a special needs trust to receive any share you intend to leave to him? Do you have life insurance, IRAs or retirement accounts, bank accounts or even real estate listing him as beneficiary? You need to get on this project right away — you are now almost two decades older than you were when you first thought about his future care.

Claim Against UTMA Custodian For Taking Funds Filed Too Late

OCTOBER 28, 2002 VOLUME 10, NUMBER 17
Allan Levine thought it was a good idea to set aside some money for his young grandchildren, Derek and Danielle Levine, and so in 1987 he established investment accounts for them. He used a popular and easy way of setting aside the money—he created accounts under the Uniform Transfers to Minors Act, or UTMA, listing himself as custodian. Apparently, however, Mr. Levine did not understand that the UTMA accounts really belonged to his grandchildren.

In December, 1995, Mr. Levine withdrew almost $125,000 from the two accounts and placed the proceeds into his own living trust. That trust provided that it would benefit Mr. Levine for the rest of his life, and that it would go to his wife Karen Levine upon his death. In other words, Derek and Danielle Levine would no longer receive any portion of the money that had been set aside for them.

Mr. Levine died in 1999. Because he had established a living trust, there was no probate required—his entire estate passed directly to his widow. His granddaughter Danielle was 17 at the time of his death, and grandson Derek had just turned 18 four months earlier.

Eighteen months after Mr. Levine’s death his grandchildren sued his widow, claiming that they were entitled to a portion of the money she had received from their grandfather’s trust. She moved to dismiss, not because he had the right to withdraw money from the UTMA accounts but because state law bars suits filed more than one year after the death of the defendant, and the grandchildren’s claim was really against Mr. Levine’s estate. The trial judge dismissed the lawsuit.

The general rule is that the claim of a minor is not foreclosed while he or she is still a minor. Danielle Levine argued before the California Court of Appeals that she had filed her lawsuit less than one year after reaching her majority, and that she should be allowed to prove that her grandfather had breached his duty to her by taking back his gift. The Court of Appeals disagreed and allowed the dismissal to stand. Levine v. Levine, October 17, 2002.

Mr. Levine’s behavior was not all that uncommon. Parents and grandparents often set up UTMA accounts for their offspring, then later decide they want their money back. Had Derek and Danielle Levine filed their lawsuit against their grandfather before his death, or against his estate within one year after his death, they would probably have prevailed; the UTMA money was not Mr. Levine’s to do with as he pleased, even though he was still listed as custodian on the accounts.

Arizona, like California, has adopted the UTMA—and the rules are similar in Arizona. Some states (and some older accounts) may still refer to the predecessor to the UTMA—the Uniform Gifts to Minors Act or UGMA. The rules governing UGMA accounts will also be similar. Money set aside in a UTMA (or UGMA) account no longer belongs to the donor, even if he or she remains as custodian.

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