By Thomas D. Begley, Jr., CELA

(Article originally published in the Barrister)  Section 8 of the Federal Housing Act of 1937 provides a rental assistance program for low-income families and individuals. HUD pays rental subsidies so eligible families can afford decent, safe and sanitary housing. The programs are generally administered by Public Housing Agencies (PHAs). Generally, the family pays 30% of its adjusted monthly income for rent. Household income must be within the applicable limit established by HUD. The limits are based on family size and locality. Family members must be U.S. citizens or eligible aliens. There are income limits. Income includes Social Security and Disability benefits, pensions, annuities, alimony, some welfare payments and regular contributions from others. Lump sum acquisitions such as personal injury settlements, are not counted as income. If the personal injury plaintiff receives a settlement and puts the money under the mattress and spends it over time, the expenditures do not count as income and do not affect Section 8 eligibility.  Historically, distributions from trusts, including Special Needs Trusts, have been counted as income, unless they are used for medical purposes or are irregular and sporadic.

In an important decision for Section 8 Housing Voucher recipients, the United State District Court for the 1st Circuit reversed the District Court decision in an important public housing case.(1) In the lower court case,(2) the District Court held that Kimberly DeCambre was receiving distributions from an irrevocable Special Needs Trust funded with the proceeds of a personal injury settlement and disqualified DeCambre from her housing assistance on the grounds that she was no longer income eligible. The Housing Authority held that because the distributions from the Special Needs Trust should be counted as income, the amount of the subsidy provided under Section 8 should be reduced $0 . Over a three year period, the distributions from the trust exceeded $200.000. The Housing Authority and the District Court held the entire amount of the distributions were income and, therefore, DeCambre lost her eligibility for Section 8 assistance. The court stated that if Kimberly DeCambre had put the money under her mattress and spent it over time, there would have been no affect on her Section 8 eligibility. However, the court held that once the personal injury settlement was deposited into the trust, it somehow changed its charac ter and all distributions from the trust were considered distributions of income. These distributions, when added to DeCambre’s other income, reduced her subsidy to $0.

On appeal, an amicus brief was filed by the Special Needs Alliance, the National Academy of Elder Law Attorneys and the National Housing Law Project in support of DeCambre. The Appellate Court noted that lump sum additions to family assets, such as settlement for person or property losses are specifically excluded under HUD Regulations from annual income. DeCambre argued that because all of the funds in her Special Needs Trust derive from a series of lump sum settlement payments for a personal injury. the Housing Authority was required to exclude all of her distributions from her annual income. The lower court agreed up to this point stating that if DeCambre had simply put the money under her mattress and used it in the same manner that the trust had made distributions, there would be no problem because there is no asset test under Section 8. However, the District Court reasoned that by depositing the lump sum payments into the Special Needs Trust, the character of the distributions changed so that each distribution was 100% countable as income.

On appeal the amicus brief contended that the principal deposited into the Special Needs Trust should considered principal and only the income earned by investing the principal should be considered income. The Court of Appeals held that DeCambre’s Special Needs Trust was funded exclusively with the proceeds from a series of tort settlements. Had these settlement proceeds been paid directly to DeCambre, the parties agreed that they would have been treated as a lump sum addition to family assets and, therefore, would have been categorically excluded from annual income upon receipt under HUD’s Regulations. The parties agreed that income derived from investments should be considered income. The only issue was when the trust distributes to or for the benefit of the tenant, some or all of principal originally paid into the trust, how should that distribution be characterized. The Housing Authority maintains that even if DeCambre’s settlement proceeds bad the character of a lump-sum addition to family assets when they entered the Special Needs Trust, they no longer possess that character once they were disbursed from the Special Needs Trust. The Court of Appeals concluded that distributions of principal from the Special Needs Trust remain principal and only the investment income is considered income. The question not before the court was, what is the implication for Third-Party Special Needs Trusts? Should distributions of principal not be considered income, but be considered simply a distribution of principal as with a First-Party Special Needs Trust? The issue was not argued in DeCambre, but logically it would seem that the same result should obtain.

As a matter of procedure in both First-Party and Third-Party Trusts, the Housing Authority should look at the resident’s prior years’ federal and/or state income tax return.

Whether or not the DeCambre decision will be accepted by other PHAs in other districts remains to be seen. The decision may be of limited effect. Section 8 is being amended to provide an asset test of $100, 000.

• DeCambre v. Brookline Housing Authority, Case 15-1458, Document 00117013731 (June 14, 2016 ).
• Brookline Housing Auth. 95 F. Supp. 3d (D. Mass. 2015).

by Thomas D. Begley, Jr., CELA

Historically, a member of the military could arrange for a pension and provide a survivor’s benefit to a spouse or child. A problem arose where the child had a disability and was receiving means-tested public benefits such as Supplemental Security Income (“SSI”) or Medicaid.   If the child with disabilities receiving those benefits or other means-tested public benefits received the pension, they would lose the benefits. This is because any income received from any source reduces the SSI income dollar-for-dollar, and if the pension exceeded the amount of SSI income, SSI would be completely lost. Medicaid is frequently linked to SSI, so that if SSI is lost, the Medicaid would be also be lost. What follows is a story of the Power of One.

An Elder and Disability Law attorney in Virginia, named Kelly Thompson, took up the cause of these beneficiaries with disabilities. Kelly enlisted help from the Special Needs Alliance, which is a national organization of lawyers practicing in the disability field and also the National Academy of Elder Law Attorneys. After several years of hard work, in late 2014 Congress enacted the Disabled Military Child Protection Act in the 2015 National Defense Authorization Act. This legislation allows military retirees and service members to designate their survivor benefit to a Special Needs Trust for the benefit of their disabled child or children.

By having the survivor pension benefits irrevocably paid into a Special Needs Trust, those funds are not counted in determining the financial eligibility of the disabled child. The net result is that the military member’s or retiree’s children with disabilities are able to benefit from the pension as well as maintain their vital public benefits.

Part of the requirements under the Disabled Military Child Protection Act is that an attorney certify that the child has previously applied for, or may in the future apply for, SSI or other benefits, and that the Special Needs Trust is compliant with all applicable state and federal laws. A template is provided for completion and signature

Begley Law Group’s Tom Begley Jr. will be one of two people honored during the 25th anniversary celebration of Planned Lifetime Assistance Network of New Jersey.

A founding member of the Begley Law Group and the Special Needs Alliance, Begley will be presented with the PLAN NJ Legal Champion Award for a 40-year career devoted to the disabled and elderly.  The ceremony will be held June 5 at 6 p.m. at the New Jersey Law Center in New Brunswick.

Planned Lifetime Assistance Network of New Jersey, PLAN NJ, a nonprofit social service agency will celebrate 25 years of serving individuals with severe developmental disabilities and mental health challenges and hope to expand awareness of resources available to residents during the special event this summer.

For more details, here is a link to the full article in the Burlington County Times.

The Voice is the e-mail newsletter of The Special Needs Alliance. This installment was written by Special Needs Alliance member Amy C. O’Hara and her co-author, Sheryl Frishman. Amy and Sheryl are attorneys with the New York law firm Littman Krooks LLP, specializing in special needs planning, trust administration, guardianships, elder law, and estate planning and administration. Amy is an active participant of the Special Needs Alliance publications committee and is a member of the New York State Bar Association. Sheryl’s practice is devoted entirely to the advocacy and life planning needs of children and adults with disabilities and their families. She is immediate past President of the Board of Directors of Westchester Arc. Sheryl also serves on the Board of Governors and Legal Committee of NYSARC Inc.

Letter of Intent

No one else knows your child as well as you do, and no one ever could. You are a walking encyclopedia of your child’s history, experiences, habits, and wishes. If your child has special needs, the family’s history adds a helpful chapter to your child’s book, one detailing his unique medical, behavioral and educational requirements.

What would happen if you suddenly became unable to provide your child with the necessary supports he needs? Without you, your child would become dependent on other caregivers who simply do not possess all of your personal knowledge and insight. However, there are steps you can take now to minimize the natural disruption and disorientation that will occur upon your death or if you become unable to care for your child during your lifetime.

First and foremost, you should appoint a legal guardian for any child who is not expected to be able manage personal financial or medical decisions without assistance. Second, you could prepare a letter of intent to help loved ones and your child manage a difficult transition when you no longer are the primary caregiver. A letter of intent is an important planning tool for parents of children with special needs (including adult children), and also may be useful when planning for minor children who are not expected to face special challenges.

Although a letter of intent is one of the most important estate planning documents a parent can prepare, it is not a formal legal document that must be created by an attorney. The goal of a letter of intent is to memorialize your knowledge of your child’s needs so that you may guide future caregivers, guardians and trustees in providing the best possible care to your child. Simply put, a thoughtful letter of intent ensures that those who come after you need not waste precious time figuring out the best way to manage and care for your child.

The letter of intent may be addressed to anyone you wish – for example “To Whom it May Concern,” “To my Guardian(s), Trustee(s) and Executor.” At minimum, the letter should address the following points:

Family History: Where and when you were born, raised, and married, including anecdotes about your own siblings, grandparents, and other relatives or special friends. A description of your child’s birth and his connections to specific family members or friends will complement your account of favorite memories and feelings about your child.

General Overview: A brief summary of your child’s life to date and your general thoughts and hopes about the future for your child.

Daily Schedule: Because levels of functionality vary for each child and future caregivers may fail to recognize this fact, it is important to include a list of your child’s daily routines, favorite activities, and events or tasks he loves or hates. Because a child’s ability to contribute to even the most mundane aspects of family life builds self-esteem, it is important that the letter mention whether your child can help with tasks like doing the dishes or raking leaves. Alternatively, if your child loves “swiffing” the floor but folding clothes frustrates him, make sure future caregivers have this information.

Food: Describe your child’s diet, including his favorite foods and any specific manner in which the food should be prepared or served. Be certain that the letter also includes a list of foods to which your child is allergic, simply does not like or otherwise may react adversely due to medication.

Medical Care: Describe in detail your child’s disability, medical history and allergies, as well as current doctors, therapists and hospitals. Detail the frequency of your child’s medical and therapy appointments and the purposes and goals of these sessions. List current medications, including how they are administered and for what purpose, and be careful to describe all medications that have not worked for your child in the past.

Education: Detail your child’s educational experiences and describe your desire for your child’s future education, including regular and special classes, specific schools, related services, mainstreaming, extracurricular activities and recreation. Discuss your wishes regarding the types of educational emphasis, i.e., vocational, academic or total communication, and name any specific programs, teachers, or related service providers that you prefer to be part of your child’s overall life plan.

Benefits Received: List the types of governmental benefits your child receives, including Medicaid, Medicare, SSI/SSDI, Supplemental Nutrition Assistance Program (food stamps), and housing assistance. Detail the agencies’ contact information, identification numbers for your child’s case(s), the recertification process for each benefit, including important dates and other reporting requirements.

Employment: Describe the types of work and work environments your child may enjoy; i.e., open employment with supervision, a sheltered workshop or an activity center. List any companies of which you are aware that provide employment in the community and may be of specific interest to your child.

Residential Environment: Describe your child’s living arrangements with family, friends or other organizations. If your child will be unable to continue living with these individuals after you stop being the primary contact for his care, describe what you consider to be the best alternative arrangements. For instance, explain whether you prefer that your child live in a group home or institution located in the same community, the preferred size of the institution, or that your child have a single room or roommate.

Social Environment: Mention the types of social activities your child enjoys, i.e., sports, dances, or movies. Indicate whether your child should be given spending money and, if so, how he has spent money in the past. The letter of intent also should note whether your child takes and/or enjoys taking vacations and, if so, whether he has a favorite travelling companion.

Religious Environment: Specify your child’s religion and any local place of worship your family attends. List all local clergy that may be familiar with your child and your family. Describe your child’s religious education and indicate whether this is of interest to your child.

Behavior Management: Describe any current behavior management program that is having a positive impact on your child and discuss any other behavior management programs that were unsuccessful in the past.

Final Arrangements: List your desires for your child’s final arrangements, including whether you have planned for a funeral, cremation or burial, and any cemetery, monument, religious service or specific clergy to officiate the proceeding.

Other Information: Include any other information that you believe will provide the best possible guidance to the person who assumes responsibility for caring for your child.

Once you prepare, sign and date the letter of intent, you should review the document annually and update it as necessary. It is important that you let your child’s potential future caregiver know the letter of intent exists and where it can be accessed; even better, you can review the document with the caregiver on an annual basis. The letter of intent should be placed with all of your other relevant legal and personal documents concerning your child.

The letter of intent can be a difficult and extremely emotional document to write, as it often is the first time parents actually envision their child with special needs navigating this world without them. However, once it is completed, the first important step has been taken toward creating a detailed road map for future caregivers and trustees. As a parent of a child with special needs, you also may be relieved to know that you are ensuring the highest quality of life for your child by laying the foundation for as seamless a transition as possible after you are gone.

Reprinted with permission of the Special Needs Alliance – www.specialneedsalliance.org.

By: Sheryl R. Frishman, Esq., Littman Krooks LLP

As a mother of a special needs child, there is nothing more frightening for me than my son being in this world without me. The thought of this keeps me up at night. In my opinion, no one knows him as well as I do and no one can care for him like I can. Nevertheless, there will most likely be a time when he is on this earth without me. While planning for the future cannot give you complete peace of mind (as nothing can), a proper plan can be put in place, and there are fabulous tools available, to ensure that your child will be properly cared for after you are gone. Not planning will put the child you want to protect more than anything in the world in jeopardy and in a vulnerable position.

Here are 10 reasons it is necessary to plan for the future of your child with special needs:

1. You are able to do the planning now. Do not wait until it is too late to do the planning. If you are reading this article you are well enough to do the planning for your child. Mahatma Gandhi said “Learn as if you were going to live forever. Live as if you were going to die tomorrow.” We cannot be sure what tomorrow will bring. The time to plan is now!

2. Planning can change as your child ages. Many parents do not want to plan for the future because they want to wait and see exactly what their child’s functioning level will be. Also, parents often want to wait until siblings are old enough to take the reins. A plan that you put in place now can be altered at a later date if circumstances change. However, missing the opportunity to plan, because you waited, will hurt your child much more than a potential change in functioning level. Better to be safe than sorry!

3. You are able to make sure future caregivers know your wishes. Write down what it means to care for your child. What are his likes or dislikes? Where would you like him to live? Etc. Etc. Preparing a “Letter of Intent” (sample letter of intent) will give the people who will be caring for your child the intimate details of what it means to care for your special child.

4. So you can continue making decisions for your child. When your child reaches the age of majority they are emancipated regardless of their functioning level. In order to continue making decisions for your child after he or she reaches the age of majority you will need to become your child’s guardian. You will have to go to court to become your child’s legal guardian after emancipation age. This is not something that happens automatically!

5. So you can have a say in who will become your child’s future caregivers. You want to be able to determine who will care for your child when you are no longer here. If you do not make this determination, or be part of the process for determining your child’s future caregivers, or successor guardian(s), this will be done for you and without your input after your demise.

6. Your child may lose valuable public benefits. If your child has a developmental disability, many of the services he or she will receive, once aged out of the school system, will be paid for by “means tested” public benefits. Thus, your child must have assets and income at or below the poverty level to be eligible. If your child inherits directly, even a small amount of money or real or personal property, he or she would probably be knocked off of those valuable benefits. Therefore, the use of an estate planning tool like a “Supplemental Needs Trust” is necessary to protect the priceless benefits.

7. Public benefits alone will not give your child the quality of life you want them to have. As stated above, eligibility for public benefits may allow your child to qualify and/or receive services once he or she ages out of the school system. Nevertheless, these public benefits will not pay for the “extra” items that you would want your child to have. For example: a television set, a video game, travel, supplemental care givers, companions, etc. A properly drafted Supplemental Needs Trust will allow your child to remain on the priceless public benefits that they require but to also receive the “extras” you would want them to receive.

8. You can put a financial plan in place. We all hear about the importance of saving for your child who is going to college. What about saving for your special needs child? It is extremely important that we put a financial plan in place that will allow us to fund a properly drafted Supplemental Needs Trust to supplement our child’s reliance on public benefits. Life insurance and other financial planning tools need to be explored with a special needs planning professional.

9. The cost of doing the planning is much less than the cost of not doing the planning. People are always concerned about having to use an attorney and the costs involved. The possibility of your child losing their public benefits and the possibility of leaving your child’s future caregivers with no direction will be a much higher cost that your vulnerable child will have to bear after your demise if you do not plan. This planning needs to be done correctly and by a highly qualified special needs planning attorney. Please visit the Special Needs Alliance, www.specialneedsalliance.org, to find a qualified special needs planning professional. This is not something every attorney or even a general estate planning attorney can do. You need to find a professional in your state that specializes in special needs planning so you can assure your child is protected. This is not something you want to bargain hunt for! Not doing the planning correctly can end up costing so much more than using the right qualified attorney

10. If you do not do the planning you will be leaving your child that you want to protect more than anything in the world in a vulnerable position relying on others to do the planning for your child without your input after your demise!

For more information on special needs planning, visit www.specialneedsnewyork.com.