On July 27, 2015, a Federal District Court in Pennsylvania (Elias v. Colvin, 2015 WL 4529877, M.D.
Pa July 27, 2015) ruled that if an individual can direct the use of a trust’s
corpus (i.e., principal) the trust
should be deemed an available or countable resource to the individual
for purposes of SSI (Supplemental Security Income) purposes.
In this case, the individual beneficiary was provided a
debit card allowing her direct access to her first party Special Needs Trust
(SNT) (i.e., a Medicaid Payback
Trust). This direct access ended when
the trusteeship changed, perhaps indicating that a more enlightened Trustee
took over management of the Trust. The
Social Security Administration (SSA) ruled that the debit card granted the
beneficiary access to her trust and, therefore, caused the trust to be deemed
an available resource to her, thus, causing a loss of her SSI, and a demand for
repayment by the SSA for over $18,000 was asserted against the
beneficiary. The decision of the SSA was
upheld on an appeal to the Federal District Court. This case once again warns the Trustees of
the major error caused when a beneficiary of a first party Medicaid payback
trust is given a debit card tied to the trust account, allowing access to trust
assets by the beneficiary.
Barber & Bartz, P.C.
525 S. Main St., Ste. 800
Tulsa, OK 74103-4511
Telephone: (918) 599-7755
Facsimile: (918) 599-7756
Email: cshacklett@barberbartz.com
Website: www.barberbartz.com
