Posts Tagged ‘Ohio’

When You Might Want to Open an ABLE Act Account

SEPTEMBER 13, 2016 VOLUME 23 NUMBER 34
Now that ABLE Act programs have been set up in several states, you might wonder if it’s time for you to set up an account for yourself or a family member with a disability. How can you figure out whether ABLE is right for you? We’ll try to help.

The Achieving a Better Life Experience Act (ABLE Act) was passed in 2014. It permitted people with disabilities to have a separate account, usable for disability-related expenses, that would not be counted as an available resource for Supplemental Security Income (SSI) or Medicaid eligibility purposes. States were encouraged to set up ABLE Act programs, and people with disabilities were permitted to open an account with any state — provided that the state permitted non-residents to participate.

So far, four states have opened their ABLE Act programs. One of those (Florida) permits only Florida residents to participate. The other three (in Ohio, Tennessee and Nebraska) are open to anyone who qualifies.

ABLE limitations

There are a number of concerns about ABLE Act accounts. First, no more than $14,000 per year can be put into an account. Second, any funds left in the account at the death of the participant — regardless of where the money originally came from — will be paid to the participant’s state’s Medicaid program. Those two limitations make ABLE Act accounts unattractive for most family members who might otherwise think of giving or leaving substantial assets to a loved one who happens to have a disability.

There is a lot of misunderstanding about one other item: are ABLE Act accounts like investment accounts, or more like checking accounts? In some cases they might look like one or the other, but thinking of ABLE Act accounts as terrific investment opportunities for people with disabilities is, well, just misguided. Earnings will be limited, expenses are likely to be somewhat higher than similar accounts for other purposes (like education accounts, on which the ABLE Act accounts were modeled), and any account that does grow to more than $100,000 will cause suspension of SSI benefits anyway. We believe that, in most cases, ABLE Act accounts will most resemble checking or savings accounts.

ABLE uses

That doesn’t mean that the ABLE Act won’t provide terrific opportunities, however. There are a number of situations in which we imagine the ABLE Act will be a great boon for beneficiaries. A sampling of the most likely beneficial circumstances for ABLE Act accounts:

  1. The capable beneficiary. Are you the person with a disability? If you could handle a savings account yourself, but have been unable to put anything away because of the $2,000 asset limit for SSI, then the ABLE Act was written for you. You can now save any money you don’t need from your SSI each month, and park it in an ABLE Act account. You can save for vehicle repairs (or a new vehicle), for tuition, or even for the property taxes on your home. There are more uses you can consider, and you probably see the possibilities.
  2. The housing shortfall. Do you (or a family member) get assistance with your housing expenses? And when you do, does that reduce your SSI benefit? If so, you might explore the ABLE Act account as a way to pass the housing assistance through a sieve that makes it perfectly permissible — and removes any reduction in your SSI payments. Your bottom line might be to increase your SSI benefit to the highest possible amount, while still getting assistance from family members with living expenses.
  3. The small inheritance, or personal injury settlement. If you have less than $14,000 coming to you from an unrestricted inheritance, or settlement of a personal injury lawsuit, you probably already know that it could interrupt your eligibility for SSI (and, perhaps, for AHCCCS, Arizona’s Medicaid program). ABLE makes it possible to take the proceeds — so long as they are less than $14,000 net — and have no negative effect on your benefits. Even slightly larger amounts can be handled this way, depending on timing, other expenses and the particulars of each situation. But one obvious way to increase the number somewhat: in addition to the $14,000 put into an ABLE Act account in any given year, an SSI recipient is permitted to have up to $2,000 in a regular bank account — provided that it’s the only account. So a person who has no assets at all can settle a $16,000 lawsuit without having any effect on SSI.
  4. The Special Needs Trust beneficiary. This one may not always be available (trust language can differ), but it might be a great option: the trustee of a special needs trust, who has been unable to give any money directly to the beneficiary, may now be able to put money into an ABLE Act account. That could give the beneficiary control over the funds, and the ability to pay at least some bills directly. The ABLE Act could give new flexibility to trustees of special needs trusts.

We’re confident that there are other ideas out there, and we even have a few ourselves. Another time perhaps we’ll try to compare the available ABLE Act accounts.

In the meantime, we have one other suggestion: if you have created a special needs trust for your child (or other person) with a disability, you might want to consider modifying it to explicitly permit the trustee to put money into an ABLE Act account. We’re happy — eager, in fact — to talk with our clients about this idea.

Subject of Guardianship Allowed to Hire Own Attorney

JULY 4, 2016 VOLUME 23 NUMBER 25
Just two weeks ago we told you about an Ohio appellate decision dealing with the authority of a close family member (in that case a sister) to participate in, and appeal from, a guardianship hearing. At about the same time another Ohio appellate court was dealing with a related question for guardianship proceedings: does the subject of a guardianship have the right to hire his or her own attorney? Spoiler alert: yes.

Janna Christensen (not her real name) was the subject of a guardianship proceeding in Marion County, Ohio. Her daughter Maria was appointed as her guardian in January of 2013.

By mid-2015, Janna wanted to terminate or modify her guardianship. Another daughter of Janna, and Janna’s brother, helped her get in touch with attorney Brian Cook, who agreed to represent her. Because his new client had a guardian appointed, Mr. Cook asked for court approval for her signature on a retainer agreement or, in the alternative, an instruction that Maria should sign on her mother’s behalf.

At a hearing a week later, however, the probate judge was skeptical about Mr. Cook’s involvement. The judge criticized Mr. Cook, saying: “I don’t disagree that [Janna] has the right to independent counsel,” but “you have also usurped the authority of the guardian and the Court who’s the superior guardian” for Janna. In other words, the Judge felt that the decision about hiring an attorney was one for Maria or the judge, not for Janna herself.

At that same hearing, with Janna not present (and without allowing Mr. Cook to speak on her behalf), the probate judge went on to deny Janna’s request for a review. At a later hearing, again without Janna present and without allowing Mr. Cook to represent her, the probate judge went further and agreed with Maria that visitation by other family members should be limited.

Mr. Cook nonetheless filed an appeal on behalf of Janna. The Ohio Court of Appeals agreed with his analysis, and reversed the local probate judge. There were at least three problems with the probate court order, according to the appellate court:

  1. The ward in a guardianship proceeding is entitled to be present at hearings. When Janna specifically asked to be present, to be heard, and to have a specific attorney represent her, the probate judge was wrong to make a decision about her attorney without granting her request to participate.
  2. Janna had a right to choose her own attorney, and her choice should not have been subjected to her daughter’s oversight.
  3. Maria’s request to restrict her visitors should not have been considered without Janna’s presence, especially since she had specifically asked to be there, to address the court, and to have her attorney represent her.

Generally speaking, the subject of a guardianship proceeding should be given the right to select their own attorney. The probate court’s decision in Janna’s case to gloss over that right was cause for reversal of its orders, and the entire proceeding was remanded for further proceedings — with Janna’s attorney in place. Guardianship of Carpenter, June 13, 2016.

Unmentioned in the Court of Appeals proceeding, but of great concern in some of the pleadings filed in the case, is that Maria, the daughter appointed as guardian, has already charged over $90,000 in fees in her administration of her mother’s estate. Maria is an attorney in Marion, Ohio, and she apparently charged her regular attorney’s rate of between $175 and $200 per hour for the work she did in managing her mother’s affairs, her finances — and her visitors.

Would a similar result occur in Arizona? Yes, almost certainly. Though there is no clear statutory provision authorizing the subject of a guardianship or conservatorship to hire his or her own attorney, the implication in the statutes — and the universal practice — would permit such a decision. It may not be hard to imagine circumstances in which the probate court might question whether the legal representation was actually initiated by the client, or for the purposes of advancing the client’s wishes, but that would be the rare circumstance. In general, even a person who has been found to be incapacitated will — and should — be permitted to select their own attorney.

Would the same outcome be anticipated in every state? Perhaps not. Some states might take the position (either by law or by practice) that the determination that a person lacked capacity precluded them from hiring an attorney. That position would, however, be wrongheaded, misguided, and antediluvian. Not that we feel strongly about it or anything.

Concerned Sister Permitted to Intervene in Guardianship Proceeding

JUNE 20, 2016 VOLUME 23 NUMBER 23
Suppose your sister is developmentally disabled, and your brother has been appointed as her guardian, to make medical, placement and other decisions. Suppose your brother has moved her to a facility you aren’t sure about, and has restricted family access to visit her. Can you do anything to question his decisions as a guardian?

In Arizona, at least, the answer would be straightforward. Any interested person can appear in a guardianship or conservatorship proceeding, and siblings would clearly qualify.

That doesn’t mean that your concerns would necessarily be resolved. The probate judge might ultimately decide that your brother was behaving appropriately, and your efforts might be ineffective. But you would have the opportunity to be heard, and you probably would be able to get access to medical and other records necessary to make your pitch — within reason. Oh, it’s worth noting that you also would have to pay a court filing fee, and that you would be held to the same standards regulating other litigants — no frivolous filings, no wild accusations, no inflammatory pleadings. But you would have the opportunity to be heard.

That isn’t always true in every circumstance or in every state. But you can now add one more state to the list in which you probably have the ability to get involved.

Jacqui Swensen (not her real name) is the concerned sister in our story. Her sister Tamara lives in Ohio, and is in her fifties. Tamara lived at home with the sisters’ parents until they could no longer care for her; in 2013 Tamara’s brother Jeff and sister Charlene were appointed as guardians. Tamara now lives in a group home near where she lived for most of her life.

Altogether there are nine surviving Swensen children, and they live all over the country — except for Tamara, Jeff and Charlene, who all stayed in Ohio. The other siblings visit frequently, have Tamara visit in their homes from time to time, and remain actively involved, even though Jeff and Charlene have been the ones with legal authority as the guardians.

When Tamara moved from her family home to the group home, Jeff limited visits from family members and Tamara’s travel to their homes. He explained that he wanted to help ease the transition into the group home, but several of the siblings became concerned. He did permit Tamara to visit her siblings, though — including a trip to Jacqui’s home after the move-in had been completed.

While Tamara visited her, Jacqui became concerned about her health — both physical and mental. She had a persistent rash, and was not handling her grooming well. Jacqui also expressed concern about her mental health; that concern was echoed by another sister, who reported that during her visit Tamara had several crying episodes.

Jeff followed up on the rash, and it was ultimately found to be scabies. He also undertook to review other care issues with the group home, and to respond to his siblings’ concerns. By this time, though, family communication was tense.

Jacqui filed a request with the probate court for review of the guardianship, and some months later (after a failed attempt at mediation) the court held four days of hearings. All the siblings were permitted to spell out their concerns and introduce evidence. At the conclusion of the hearings, the court ruled that Jeff could continue as guardian and ordered a set visitation schedule.

Jacqui filed an appeal, but Jeff objected. She was not actually a party to the proceedings, he argued, and so didn’t have any right to appeal.

The Ohio Court of Appeals dealt with the question of Jacqui’s standing to appeal. First, the appellate court noted that Jeff’s point was well-taken: if Jacqui was not a party, she could not appeal the decision. But the probate court was wrong, ruled the judges, to deny Jacqui’s request to formally intervene in the guardianship in the first instance.

Though Jacqui and the other siblings had been permitted to participate, to call witnesses and cross-examine Jeff’s witnesses, the probate judge had not granted her formal status as an intervening party. That, said the Court of Appeals, was a mistake. Partly because of the unique nature of guardianship proceedings, the interest of a sibling in monitoring the care and welfare of a person in Tamara’s position should militate in favor of allowing them to intervene. Guardianship of Sweeney, June 2, 2016.

It is important to note that the appellate court expressly did not agree with Jacqui’s objections to the probate court’s rulings on the merits. Jeff’s guardianship was confirmed, and his authority to regulate Tamara’s care was reinforced. The visitation schedule remained in effect, as well. But Jacqui now clearly has the legal authority to intervene in her sister’s guardianship, and assurance that her views will be heard.

Ohio Probate Judge Describes Court as “Superior Guardian”

DECEMBER 27, 2011 VOLUME 18 NUMBER 44
Carl Smith is a developmentally disabled young man living in Ohio. When he reached age 18, his mother Peggy Smith applied to the local probate court for appointment as his guardian. She was appointed, and Carl continued to live with her for the next several years.

In 2005 James Stewart moved into the Smith home. Mr. Stewart was a recently-released felon; he had spent fourteen years in the Ohio prison system after a rape conviction. Mr. Stewart and Ms. Smith later married.

In 2007 Carl Smith reported that his stepfather had slapped him. Without any further evidence of violence, authorities simply closed their investigation. In 2008 Carl reported that his stepfather had beaten him with a belt; caregivers at his day program observed cuts and bruises, and a report was filed. Mr. Stewart was charged with a felony for the alleged abuse, and he represented himself at trial. He was convicted.

Meanwhile, the probate court learned of the assault charge and scheduled its own hearing into Carl’s care and living arrangements. Concerned about his safety, the probate judge removed Mrs. Stewart (the former Ms. Smith) as guardian and appointed a private fiduciary to make placement and treatment decisions for Carl. Carl moved into a group home with two other developmentally disabled residents and a full-time caregiver.

Mrs. Stewart appealed her removal as guardian. The Ohio Court of Appeals agreed that her removal was premature as the criminal charges against Mr. Stewart had not yet been resolved. At about the same time, the same Court of Appeals also reversed the conviction of Mr. Stewart on the assault charge, finding that he should not have been allowed to represent himself in his criminal trial.

The county prosecutor made a decision not to re-try Mr. Stewart on the assault charge, since he had already served as much jail time as he would get if there was another trial. Mrs. Stewart then sought approval to return Carl’s guardianship to her, and to bring him back into her — and her husband’s — home.

The Ohio probate judge declined to make Mrs. Stewart the guardian for her son once again. After a court-appointed investigator reported that Carl was frightened of Mr. Stewart and happy in his current environment, the judge ruled that Mrs. Stewart had exposed her son to potential and actual harm.

In a guardianship case, ruled the probate judge, the court is the “superior guardian” and ultimately responsible for decisions about placement, care and welfare. The appointed guardian “is simply an officer of the court subject to the court’s control, direction and supervision.” With that responsibility, it is incumbent on the probate court to investigate and act on any concerns about the well-being of wards in guardianship proceedings.

Mrs. Stewart appealed again. She argued that the probate court had disobeyed the earlier Court of Appeals instruction by not returning Carl to her care, and that it had no jurisdiction to initiate its own investigation into Carl’s living arrangements.

In its second view of the guardianship matter (and its third look at the Stewart/Smith family) the Court of Appeals dismissed Mrs. Stewart’s allegations. It agreed with the probate judge that the court is the “superior guardian,” and that a guardian’s actions are always subject to the court’s review. The appellate court quoted a 2010 Ohio Supreme Court decision (In Re: Guardianship of Spangler) in which the state’s high court had ruled that “the plenary power of the probate court as the superior guardian allows it to investigate whether a guardian should be removed upon receipt of sufficient information that the guardian is not acting in the ward’s best interest.” In Re: Guardianship of Smith, December 16, 2011.

In addition to Ohio, courts in Mississippi and Washington have described their local probate courts as the “superior guardian” in recent guardianship disputes. What does that mean? As a practical matter, it means that court-appointed guardians — even when they are also the parents or other close family member — are responsible to the probate judge for their decisions about care and placement. The probate judge may investigate, may enter restrictive orders and may even remove guardians when it appears necessary for the ward’s safety or well-being.

Arizona Legislature Changes Format For Beneficiary Deed

APRIL 3, 2006  VOLUME 13, NUMBER 40

Five years ago the Arizona Legislature adopted an interesting new law. Modeled on a similar law in Missouri, the “beneficiary deed” statute permitted property owners to designate who would receive their property on death—much like a “payable on death” bank account. Now the state legislature has revisited beneficiary deeds, and made them even more flexible and useful.

One unanswered problem arose a handful of times under the previous law. What would happen if a person named to receive property by a beneficiary deed died before the original property owner? If, for example, a parent signed a beneficiary deed to “my two children, John and Mary,” and Mary died before the parent leaving children of her own, did that mean that her children would receive her share, or that son John would own the entire property on the parent’s death?

Effective this fall (the date is not yet set and won’t be known until the legislature adjourns) beneficiary deeds can solve that problem. Under a law signed by Governor Napolitano on March 24, 2006, all new beneficiary deeds must include a paragraph indicating which of two choices the owner prefers. The language required by the new law:

If a grantee beneficiary predeceases the owner, the conveyance to that grantee beneficiary shall either (choose one):

[] Become null and void.

[] Become part of the estate of the grantee beneficiary.

There are still a number of important issues to remember in the use of beneficiary deeds, and it will not be appropriate in every case to use this approach to transfer property. With some of the following limitations in mind, however, it may be that the beneficiary deed is a simple, inexpensive and useful method to avoid probate, especially in small estates. Among the remaining limitations for beneficiary deeds:

  • They are not available in every state. As of this writing, only Arizona, Arkansas, Colorado, Kansas, Missouri, Nevada, New Mexico and Ohio permit the use of beneficiary deeds.
  • An individual using a beneficiary deed will need to coordinate his or her estate plan as to multiple assets—it may, for instance, be necessary to keep track of beneficiary designations on multiple properties, several bank accounts, and a number of insurance policies and brokerage accounts. Anyone with more than a handful of assets should probably consider a living trust instead.
  • A beneficiary deed can be changed by a surviving owner, so in the case of a husband and wife (for example), the final distribution is not set until the second death.
  • The beneficiary deed provides no estate tax planning benefits for larger estates.

And what about individuals who signed an Arizona beneficiary deed before the new law was passed? Nothing in the law requires them to change their deeds, but they would be well-advised to consider updating the language to clarify what would happen if a beneficiary died before them. For those who might sign a beneficiary deed between now and the effective date, the best approach is less clear. Both the existing law and the new version require that beneficiary deeds be “substantially in the following form”—and then the form changes. Our advice: if you plan on signing an Arizona beneficiary deed in the next few months, expect to sign an updated version this fall.

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