CAN THE TRUSTEE OF A SPECIAL NEEDS TRUST EMPLOY A PARENT OF A DISABLED CHILD AS A CAREGIVER FOR THAT CHILD? (PART II)

(This is a follow up to a blog posted 2-14-12)

Since posting my last blog on 2-14-12, I received a response email from Mr. Travis Smith, Esq. assistant general counsel to the Oklahoma Department of Human Services as to the question posed in the heading of that and this blog post. Mr. Smith is the “go to” person with regard to questions affecting Medicaid qualification through DHS in Oklahoma. I quote his response in part:

“…OKDHS treatment of payments to parents of minors is not specifically addressed in the OAC[“Oklahoma Administrative Code”-the official administrative record that includes policies promulgated by the Oklahoma Health Care Authority controlling Medicaid qualification in Oklahoma]. “And how OKDHS treats any payment to any parent of a minor will be very fact dependent and that they [i.e. parents] should have [their] specific circumstances checked out [i.e., with legal counsel or with OKDHS] before they start making payments.”

He further stated that: “the trust corpus [of the special needs trust] would be available [i.e., treated as a resource thus disqualifying the child from continued receipt of Medicaid benefits] if the parent provides the kind of care that the NM case dealt with.” He is referring to a very significant New Mexico federal court case entitled “Steffan Hobbs vs. Marsha Zenderman, [et al], Secretary of the Department of Human Services.” The opinion was rendered in 2008 and affirmed on appeal to the tenth circuit [579 F.3d 1171, 1179 (10th Cir. 2009)], the same appellate court that hears cases from Oklahoma. The facts in the case evidence considerable free spending habits of the parents in using trust assets to pay for things that benefited the parents/family and not just the disabled child (i.e., violated the “sole benefit rule”). The parents used the trust funds also to pay the mother for care giving for their disabled/brain injured child. Although it appears that the parents may have taken advantage of the trust in paying for things that benefited the parents directly and indirectly, the court also noted that payments were made to the parent for services she “was already legally obligated to provide as a parent.” The door appeared to be somewhat left open for “skilled services” a parent might provide and examples given were “physical or other therapist” or performing “skilled services,” the latter not being defined.

So again, in conclusion a trustee, whether professional or parent, needs to seek legal advice before assuming that payments to a parent as a caregiver will be approved.

Curtis J. Shacklett, Esq.
Barber & Bartz
525 S. Main Street, Suite 800
Tulsa, Oklahoma 74103-4511
Telephone: (918) 599-7755
Facsimile: (918) 599-7756
E-mail: cshacklett@barberbartz.com

LIFECARE TRANSITION PLANNING FOR THE SPECIAL NEEDS CHILD

Most families that have a special needs (i.e., disabled) son or daughter collect a wealth of information about the special needs of that child, including information regarding medical care, educational issues, names of doctors, consultants, care-givers, special activities, and a host of other important bits of information that are critical to the ongoing care of their child.

However, experience with our clients has shown that, in spite of the parent’s good intentions, much of that information is held and remains “between the ears” of the parent rather than in one conveniently organized and well-documented format that would be readily available and transferrable to a successor guardian, caregiver, or Trustee for the disabled child in the event of the loss of life or disability of the parent.

We think it critically important that families with special needs children build a “Lifecare Transition Notebook” to contain such relevant and critically important information in a clear and well organized manner.  Such a notebook will be of priceless value to another family member or friend who takes on some responsibility for caring or overseeing care for the special needs child after the parent can no longer do so. 

In addition, providing a copy of the “Lifecare Transition Notebook” to the professional Trustee who may eventually assume responsibility for managing the Special Needs Trust will help the Trustee have additional and critical information to assist the Trustee in making critical investment or disbursement decisions involving the Trust.

We at Barber & Bartz can provide such a personalized “Lifecare Transition Notebook” to our clients, if requested, as part of the estate and special needs planning services that we provide.