Who watches the watchers?
July 15, 2013 9:55 AM Subscribe
Mark Holman was a severely disabled teenager who had been living in an institution since his mother became ill. Upon her death, her lawyer petitioned for his guardianship before Judge Kristen Booth Glen, who asked a simple question: when did you last see Mark?
"I haven't seen him since he was eight or nine," responded the lawyer. "His mother used to bring him to our office with his brother, just to show him my face and so forth and so on, so I haven't seen him probably since 1995 or 1996."
Appalled by both the poor standard of care in Mark's case and the breathtaking lack of regulations compelling anything better, Judge Glen set about writing an opinion that would change the way trusts for people with disabilities are managed in New York State in very, very significant ways.
Activist Judges... god bless them!
posted by The 10th Regiment of Foot at 10:07 AM on July 15, 2013 [3 favorites]
posted by The 10th Regiment of Foot at 10:07 AM on July 15, 2013 [3 favorites]
Like we needed further proof that bankers are often pieces of shit.
posted by cjorgensen at 10:18 AM on July 15, 2013 [6 favorites]
posted by cjorgensen at 10:18 AM on July 15, 2013 [6 favorites]
While I think Glen was great for what she's done, I worked in a Medicaid/Medicare/Social Security-funded facility for mentally retarded adults and this statement is inaccurate:
"When you think about an institution that gets the shit payments they get from Medicaid, they do their best," she says. "But they can't do one-on-one. They can't carefully teach somebody to use a communicative device. They can't take people out to restaurants. The more somebody interacts with the community, the more they're allowed to exercise their choice, the more they learn how to make decisions."
We did all of those things on our Medicaid/Medicare/SS budget. Sure family funding helped pay for extra living expenses and may have meant a higher-quality communication device or Aveda shampoo vs. Suave, but the level and quality of care was the same for all clients. I usually did not know nor certainly did I care who got what sort of funds. I took them all out to eat and to places they liked to go. I worked with them all one-on-one, took them to work and play, helped them use their devices, and set and acheive life goals. Many of these activities were in fact MANDATED by the system and the privately funded clientelle were reaping the benefits of being included in an organization that had to meet (and we strove of exceed) the mandated standards.
posted by The 10th Regiment of Foot at 10:21 AM on July 15, 2013 [18 favorites]
"When you think about an institution that gets the shit payments they get from Medicaid, they do their best," she says. "But they can't do one-on-one. They can't carefully teach somebody to use a communicative device. They can't take people out to restaurants. The more somebody interacts with the community, the more they're allowed to exercise their choice, the more they learn how to make decisions."
We did all of those things on our Medicaid/Medicare/SS budget. Sure family funding helped pay for extra living expenses and may have meant a higher-quality communication device or Aveda shampoo vs. Suave, but the level and quality of care was the same for all clients. I usually did not know nor certainly did I care who got what sort of funds. I took them all out to eat and to places they liked to go. I worked with them all one-on-one, took them to work and play, helped them use their devices, and set and acheive life goals. Many of these activities were in fact MANDATED by the system and the privately funded clientelle were reaping the benefits of being included in an organization that had to meet (and we strove of exceed) the mandated standards.
posted by The 10th Regiment of Foot at 10:21 AM on July 15, 2013 [18 favorites]
Maybe there could be a special institution for financiers who are demonstrated to lack moral ability and fail the interests of those dependent on their services. I realize that medical science holds out some hope for eventual treatment and productive reintroduction to society, but, until that time, these people with the potential for economic violence should be isolated for society's protection as well as their own.
posted by GenjiandProust at 10:23 AM on July 15, 2013 [5 favorites]
posted by GenjiandProust at 10:23 AM on July 15, 2013 [5 favorites]
From the piece, emphasis added: "This is very upsetting to me," [the guardian/banker] Platt says. Now 81, he sounds exhausted when he speaks of Mark's case from his Upper East Side office.
"I never gave her any reason to have such a harsh opinion," he says. "It's not pleasant, especially with the career that I've had, and I'm going to make sure that I continue to do what I'm doing. I will never, ever let anyone criticize me."
Now there's a man you want in charge of the well-being of your children. Holy shit.
posted by Harvey Jerkwater at 10:23 AM on July 15, 2013 [21 favorites]
"I never gave her any reason to have such a harsh opinion," he says. "It's not pleasant, especially with the career that I've had, and I'm going to make sure that I continue to do what I'm doing. I will never, ever let anyone criticize me."
Now there's a man you want in charge of the well-being of your children. Holy shit.
posted by Harvey Jerkwater at 10:23 AM on July 15, 2013 [21 favorites]
My husband and I established a supplemental needs trust fund for our son who receives a monthly disability check. In the trust we put a small house, and a small amount of money that we are slowly trying to increase to produce enough income to eventually cover insurance, taxes and repairs.
When we established the trust, as little as the trust is, a large amount of pressure was brought on us to choose the lawyer who created the trust and his bank for trustees: apparently denying my son disbursements would create discord in the family. We refused, and placed ourselves as trustees and our daughters after we are gone. It seems that we made the right decision
posted by francesca too at 10:24 AM on July 15, 2013 [5 favorites]
When we established the trust, as little as the trust is, a large amount of pressure was brought on us to choose the lawyer who created the trust and his bank for trustees: apparently denying my son disbursements would create discord in the family. We refused, and placed ourselves as trustees and our daughters after we are gone. It seems that we made the right decision
posted by francesca too at 10:24 AM on July 15, 2013 [5 favorites]
Maybe there could be a special institution for financiers who are demonstrated to lack moral ability and fail the interests of those dependent on their services. I realize that medical science holds out some hope for eventual treatment and productive reintroduction to society, but, until that time, these people with the potential for economic violence should be isolated for society's protection as well as their own.
Like this one?
posted by The 10th Regiment of Foot at 10:25 AM on July 15, 2013 [2 favorites]
Like this one?
posted by The 10th Regiment of Foot at 10:25 AM on July 15, 2013 [2 favorites]
Thanks for this, as it may be relevant to a family member of mine.
posted by immlass at 10:30 AM on July 15, 2013
posted by immlass at 10:30 AM on July 15, 2013
"It's not pleasant, especially with the career that I've had, and I'm going to make sure that I continue to do what I'm doing. I will never, ever let anyone criticize me."
Wow, now I feel obligated: Mr Platt, you sir, are a piece of shit.
posted by el io at 10:34 AM on July 15, 2013 [4 favorites]
Wow, now I feel obligated: Mr Platt, you sir, are a piece of shit.
posted by el io at 10:34 AM on July 15, 2013 [4 favorites]
"It's not pleasant, especially with the career that I've had, and I'm going to make sure that I continue to do what I'm doing. I will never, ever let anyone criticize me."
Said like a true asshole incapable of the most basic of self-reflection or understanding of his own shortcomings.
posted by Blasdelb at 10:35 AM on July 15, 2013
Said like a true asshole incapable of the most basic of self-reflection or understanding of his own shortcomings.
posted by Blasdelb at 10:35 AM on July 15, 2013
We need more judges like Glen. She's doing good work with the abuses of these large trusts, but the amount of everyday bilking that happens to the disabled and elderly by supposed caretakers is just staggering across the board, whether it's legal guardians or caretaking companies or their own close family members doing it.
posted by jason_steakums at 10:38 AM on July 15, 2013 [4 favorites]
posted by jason_steakums at 10:38 AM on July 15, 2013 [4 favorites]
This article very clearly illustrates how the stratification and isolation of finance from the realities of the society in which their interests intersect is at a severely distorted and wrong headed juxtaposition. Banks and financial institutions appear to believe that money is the be-all-end-all of their responsibility, and many other sectors of society are saying, more and more, that "NO!", money is not the be-all-end-all, it is a tool, and should be regarded and respected as such. Money does not make one healthy. Money does not make one wise. Money does allow for opportunity and facilitates economic activity and engagement.
Were I to have the ability, I would rewrite the charter of every bank and financial institution in the world, simply adding the clause that money is to be used for the benefit of the stake-holder, not the benefit of the bank.
It is really simple human behavior. If no one states a clear goal for what a banks purpose is, it will behave (or rather, the people who work at the bank will, on the banks behalf) as a selfish and entitled tyrant, using the accumulated power of the capitol it holds to extract more capitol in rents from their clients. Because no one prior has said "hey, that money should be used for these progressive social ends", the banks have no interest or sense of responsibility except to create more wealth (mostly for themselves, through fees and commissions). And this is why you end up with horrible institutions that can wield the power of destroying the economy in 2007-8.
Sigh. If only to dream of a better system, where the externalized costs are accounted for. Sure, they grew Mark's trust from $1M to $3M. But wouldn't Mark (and the economy as a whole) have been better had they simple grown it to $2M and spent the rest on his care and set a structure in place to enable his care to be overseen in a much more engaged and productive manner?
When will we learn that saving for tomorrow is great and all, but you shouldn't make yourself (and others around you) suffer because you can't be bothered to look at what needs to be done today?
/end probably nonsense rant
posted by daq at 10:39 AM on July 15, 2013 [6 favorites]
Were I to have the ability, I would rewrite the charter of every bank and financial institution in the world, simply adding the clause that money is to be used for the benefit of the stake-holder, not the benefit of the bank.
It is really simple human behavior. If no one states a clear goal for what a banks purpose is, it will behave (or rather, the people who work at the bank will, on the banks behalf) as a selfish and entitled tyrant, using the accumulated power of the capitol it holds to extract more capitol in rents from their clients. Because no one prior has said "hey, that money should be used for these progressive social ends", the banks have no interest or sense of responsibility except to create more wealth (mostly for themselves, through fees and commissions). And this is why you end up with horrible institutions that can wield the power of destroying the economy in 2007-8.
Sigh. If only to dream of a better system, where the externalized costs are accounted for. Sure, they grew Mark's trust from $1M to $3M. But wouldn't Mark (and the economy as a whole) have been better had they simple grown it to $2M and spent the rest on his care and set a structure in place to enable his care to be overseen in a much more engaged and productive manner?
When will we learn that saving for tomorrow is great and all, but you shouldn't make yourself (and others around you) suffer because you can't be bothered to look at what needs to be done today?
/end probably nonsense rant
posted by daq at 10:39 AM on July 15, 2013 [6 favorites]
I was sad to see that Glen has since retired, but what a great legacy to leave behind. And she's now teaching-- I hope she goes on to inspire other judicial professionals by example.
posted by WidgetAlley at 10:41 AM on July 15, 2013
posted by WidgetAlley at 10:41 AM on July 15, 2013
His delays in visiting Mark and filing paperwork were largely due to health problems, [Platt] says.
You know, at 81, if he has health and family concerns that prevent his being able to do the job in a timely and responsible manner, he should remove himself as a trustee. He certainly seemed capable of collecting commissions though.
posted by BigHeartedGuy at 10:51 AM on July 15, 2013 [18 favorites]
You know, at 81, if he has health and family concerns that prevent his being able to do the job in a timely and responsible manner, he should remove himself as a trustee. He certainly seemed capable of collecting commissions though.
posted by BigHeartedGuy at 10:51 AM on July 15, 2013 [18 favorites]
That affadavit from Platt is horeshit.
Of course the kid improved because he was finally getting the attention he needed.
Now imagine if he had gotten it 5 years earlier. He might be speaking in simple full sentences, or at least have a few more single words, or better abilities to use PECs for communication.
posted by zizzle at 10:51 AM on July 15, 2013 [1 favorite]
Of course the kid improved because he was finally getting the attention he needed.
Now imagine if he had gotten it 5 years earlier. He might be speaking in simple full sentences, or at least have a few more single words, or better abilities to use PECs for communication.
posted by zizzle at 10:51 AM on July 15, 2013 [1 favorite]
Some studies on the effects of perceived self-affluence on behavior.
posted by amtho at 10:54 AM on July 15, 2013 [2 favorites]
posted by amtho at 10:54 AM on July 15, 2013 [2 favorites]
Platt seems like some kind of con man even in his better days
In 1995, Marie went to a talk on estate planning at a Manhattan hotel. The speaker was Harvey Platt, an estate lawyer who had written several books on trusts. Then in his 60s, Platt co-chaired a trust for the New York State Association for Retarded Children, the nation's largest nonprofit supporting people with intellectual disabilities.
"The selection of the trustee can be in many instances the most difficult part of creating a trust,"
...
Marie approached Platt after the lecture. His face was framed by thick, oval glasses, and he had the manner of an old-fashioned family attorney. Platt agreed to help Marie create trusts for Mark and Charles. When she died, her sister would become Mark's guardian, with Platt as a backup.
Hard to find a trustee. Luckily he agreed to do it after literally minutes of arm twisting.
posted by Ad hominem at 11:03 AM on July 15, 2013 [1 favorite]
In 1995, Marie went to a talk on estate planning at a Manhattan hotel. The speaker was Harvey Platt, an estate lawyer who had written several books on trusts. Then in his 60s, Platt co-chaired a trust for the New York State Association for Retarded Children, the nation's largest nonprofit supporting people with intellectual disabilities.
"The selection of the trustee can be in many instances the most difficult part of creating a trust,"
...
Marie approached Platt after the lecture. His face was framed by thick, oval glasses, and he had the manner of an old-fashioned family attorney. Platt agreed to help Marie create trusts for Mark and Charles. When she died, her sister would become Mark's guardian, with Platt as a backup.
Hard to find a trustee. Luckily he agreed to do it after literally minutes of arm twisting.
posted by Ad hominem at 11:03 AM on July 15, 2013 [1 favorite]
That whole run of bullshit from him after the "I will never, ever let anyone criticize me." line is a hell of a thing. He'll never even consider taking responsibility for anything but hey, what about Anderson, the court and society? Blame them. Also god fixed Mark.
And, you know, I'm sympathetic to the medical problems and deaths in Platt's family (which is why he mentioned it), but that's kind of a perfect example of why you should take Glen's advice and hire someone who can care for the child when you can't.
posted by jason_steakums at 11:14 AM on July 15, 2013
And, you know, I'm sympathetic to the medical problems and deaths in Platt's family (which is why he mentioned it), but that's kind of a perfect example of why you should take Glen's advice and hire someone who can care for the child when you can't.
posted by jason_steakums at 11:14 AM on July 15, 2013
Now I'm curious to know what happens to the billions of dollars in all of these special needs trusts after the beneficiary dies. Yes, Medicaid / Medicare stand first in line and get paid for the cost of all the past care, and yes, in some cases that exhausts the trust funds.
But a $3.6 million dollar trust? What happens after (inevitably, sadly) Mark dies, and Medicaid gets paid off? Does JP Morgan get to keep the rest? Or does that depend on the exact details of the trust documents? Who checks?
[Deleted expletives about vultures as unfair to vultures.]
posted by RedOrGreen at 11:20 AM on July 15, 2013
But a $3.6 million dollar trust? What happens after (inevitably, sadly) Mark dies, and Medicaid gets paid off? Does JP Morgan get to keep the rest? Or does that depend on the exact details of the trust documents? Who checks?
[Deleted expletives about vultures as unfair to vultures.]
posted by RedOrGreen at 11:20 AM on July 15, 2013
Some studies on the effects of perceived self-affluence on behavior.
So because the autistic guy was perceived as wealthy he suddenly started to succeed?
posted by The 10th Regiment of Foot at 11:23 AM on July 15, 2013
So because the autistic guy was perceived as wealthy he suddenly started to succeed?
posted by The 10th Regiment of Foot at 11:23 AM on July 15, 2013
[Deleted expletives about vultures as unfair to vultures.]
True. Vultures serve a very useful purpose. Which is more than I can say for some of the people described in this story.
posted by GenjiandProust at 11:23 AM on July 15, 2013
True. Vultures serve a very useful purpose. Which is more than I can say for some of the people described in this story.
posted by GenjiandProust at 11:23 AM on July 15, 2013
if he has health and family concerns that prevent his being able to do the job in a timely and responsible manner, he should remove himself as a trustee.
This. This is what ethical advisors do.
posted by small_ruminant at 11:28 AM on July 15, 2013
This. This is what ethical advisors do.
posted by small_ruminant at 11:28 AM on July 15, 2013
Yes, Medicaid / Medicare stand first in line and get paid for the cost of all the past care, and yes, in some cases that exhausts the trust funds.
Apparently that's not the case for trusts like this one? It looks like when Alice creates a trust for disabled person Bob with Charlie as the trustee, the government pays for care throughout Bob's life and never gets any reimbursement. When Bob dies, the trust does whatever it says to do with the money when Bob dies.
Which, I have to admit, annoys me. Maybe I'm just a crazy person, but it seems to me that disabled millionaires can pay for their own care until they're not rich any more.
posted by ROU_Xenophobe at 11:32 AM on July 15, 2013 [1 favorite]
Apparently that's not the case for trusts like this one? It looks like when Alice creates a trust for disabled person Bob with Charlie as the trustee, the government pays for care throughout Bob's life and never gets any reimbursement. When Bob dies, the trust does whatever it says to do with the money when Bob dies.
Which, I have to admit, annoys me. Maybe I'm just a crazy person, but it seems to me that disabled millionaires can pay for their own care until they're not rich any more.
posted by ROU_Xenophobe at 11:32 AM on July 15, 2013 [1 favorite]
But a $3.6 million dollar trust?
Not even getting into the fact that with today's health care costs, $3.6 million could easily be used up within a very short time frame, far shorter than the life of the patient.
posted by Melismata at 11:35 AM on July 15, 2013
Not even getting into the fact that with today's health care costs, $3.6 million could easily be used up within a very short time frame, far shorter than the life of the patient.
posted by Melismata at 11:35 AM on July 15, 2013
it seems to me that disabled millionaires can pay for their own care until they're not rich any more.
The problem is that if you have a system that demands that people go bankrupt before it will step in and help, you're going to see that happening a lot more often to ordinary lower and middle class folks than to filthy rich types. I'd rather see a system that makes sure everyone gets some standard of care no matter what their personal fortune amounts to. It's annoying seeing a rich family mooch off the state when they could be paying their own way, but it's preferable to seeing countless poorer people get ground into the dust for no reason other than 'you aren't poor enough yet.'
posted by echo target at 11:51 AM on July 15, 2013 [18 favorites]
The problem is that if you have a system that demands that people go bankrupt before it will step in and help, you're going to see that happening a lot more often to ordinary lower and middle class folks than to filthy rich types. I'd rather see a system that makes sure everyone gets some standard of care no matter what their personal fortune amounts to. It's annoying seeing a rich family mooch off the state when they could be paying their own way, but it's preferable to seeing countless poorer people get ground into the dust for no reason other than 'you aren't poor enough yet.'
posted by echo target at 11:51 AM on July 15, 2013 [18 favorites]
it seems to me that disabled millionaires can pay for their own care until they're not rich any more.
Echo target says what I wanted to. I've set up these types of trust accounts* and the standard use case that I see is when a family member passes, and their life insurance kicks in, or their (modest) estate passes down. Usually a few hundred grand, which is really not that much when we're talking dozens of years. In my clients' situations (so not at "needs to be in a home" levels of symptoms but usually "cannot work or participate properly in the community"), they're getting less than $1k/mo for rent+food+etc, all of which is going to it. The new money can do things like get them a better car, maybe some physio, a bit of entertainment, taxis to get them out in the community.
It's exempt from being spent down, which is good: if it's not exempt, then they're not allowed to have more than like $5000 in assets (1 vehicle and 1 house are not considered assets, thankfully). So they can't save up to make bigger purchases without having that exemption.
---
It's tricky, these absolute discretionary trusts. At least here, there are ways to set up better trusts with some more control over the trustees, but only if it's done before the money comes into the person with a disability. And people are bad at planning for the future. It's especially tricky when my client is being helped by a friend (great!) to meet with me, but has no other support network, so the friend is also going to be the trustee; there's a serious potential for abuse there. I don't really know how to get around it.
*I'm a lawyer at a legal clinic, helping low income people with disability-related matters. I haven't actually been a trustee or anything.
posted by Lemurrhea at 12:19 PM on July 15, 2013
Echo target says what I wanted to. I've set up these types of trust accounts* and the standard use case that I see is when a family member passes, and their life insurance kicks in, or their (modest) estate passes down. Usually a few hundred grand, which is really not that much when we're talking dozens of years. In my clients' situations (so not at "needs to be in a home" levels of symptoms but usually "cannot work or participate properly in the community"), they're getting less than $1k/mo for rent+food+etc, all of which is going to it. The new money can do things like get them a better car, maybe some physio, a bit of entertainment, taxis to get them out in the community.
It's exempt from being spent down, which is good: if it's not exempt, then they're not allowed to have more than like $5000 in assets (1 vehicle and 1 house are not considered assets, thankfully). So they can't save up to make bigger purchases without having that exemption.
---
It's tricky, these absolute discretionary trusts. At least here, there are ways to set up better trusts with some more control over the trustees, but only if it's done before the money comes into the person with a disability. And people are bad at planning for the future. It's especially tricky when my client is being helped by a friend (great!) to meet with me, but has no other support network, so the friend is also going to be the trustee; there's a serious potential for abuse there. I don't really know how to get around it.
*I'm a lawyer at a legal clinic, helping low income people with disability-related matters. I haven't actually been a trustee or anything.
posted by Lemurrhea at 12:19 PM on July 15, 2013
The problem is that if you have a system that demands that people go bankrupt before it will step in and help, you're going to see that happening a lot more often to ordinary lower and middle class folks than to filthy rich types.
Sure, but here we're not talking about a family spending down the family's resources and grinding themselves into it. We're talking about trusts for institutionalized orphans.
To be clear, I've no particular objection to setting up trusts that provide for additional care for institutionalized people. What I'm objecting to is the state being unable to recoup its medicaid expenses from the trust on the death of the institutionalized person. If poor people establish a $5K trust for their institutionalized child, or a middle-class family a $50K trust, and by some miracle there's money left in it on the child's death, it should go towards previous care for the child instead of being distributed to cousins or sent to the parents' alma mater.
posted by ROU_Xenophobe at 12:27 PM on July 15, 2013 [1 favorite]
Sure, but here we're not talking about a family spending down the family's resources and grinding themselves into it. We're talking about trusts for institutionalized orphans.
To be clear, I've no particular objection to setting up trusts that provide for additional care for institutionalized people. What I'm objecting to is the state being unable to recoup its medicaid expenses from the trust on the death of the institutionalized person. If poor people establish a $5K trust for their institutionalized child, or a middle-class family a $50K trust, and by some miracle there's money left in it on the child's death, it should go towards previous care for the child instead of being distributed to cousins or sent to the parents' alma mater.
posted by ROU_Xenophobe at 12:27 PM on July 15, 2013 [1 favorite]
The sad example of (child actor) Jackie Coogan showed that even biological parents can't always be trusted to concern themselves with what's best for their children. (The result was CA's 1939 Coogan's Law.) As late as the 60s child actors were still being used by the industry and then thrown away when they grew up.
Kids lives have improved a lot in the intervening decades ... but it seems that a kid with money is still a target for people capable of rationalizing away their heartless usury.
posted by Twang at 12:51 PM on July 15, 2013 [1 favorite]
Kids lives have improved a lot in the intervening decades ... but it seems that a kid with money is still a target for people capable of rationalizing away their heartless usury.
posted by Twang at 12:51 PM on July 15, 2013 [1 favorite]
ROU_Xenophobe: Apparently that's not the case for trusts like this one? and What I'm objecting to is the state being unable to recoup its medicaid expenses from the trust on the death of the institutionalized person.
I am not a legal expert by any means, but I do have very close personal experience that touches on some of this.
Here's the simplified version as I understand it (for NY): if a disabled person is eligible to receive a lump sum amount (legal settlement, typically, or maybe a parent's estate), Medicaid is first in line for repayment[*] for care expenses till that point. If there's money left over, that money can go into a trust fund which is shielded from the Medicaid assets test for the duration of the disabled person's life. Then, once again, Medicaid is first in line to get paid back. So it is not the case that money goes to cousins or parents' alma mater while the government gets stiffed.
What I don't understand is what happens if there's money left in the trust fund after the disabled person dies and all Medicaid obligations have been paid back. Then what? (Of course it is probably true that the richer you are, the better the lawyers you can hire, and the better the deal you can get - that never changes...)
[*] This may be a negotiated partial repayment in order to have some money left for a trust fund, according to some recent NY legal decisions, but here be dragons. Or at least, legal fine print. Possibly all of this applies only to NY, and other states have different rules.
posted by RedOrGreen at 1:31 PM on July 15, 2013
I am not a legal expert by any means, but I do have very close personal experience that touches on some of this.
Here's the simplified version as I understand it (for NY): if a disabled person is eligible to receive a lump sum amount (legal settlement, typically, or maybe a parent's estate), Medicaid is first in line for repayment[*] for care expenses till that point. If there's money left over, that money can go into a trust fund which is shielded from the Medicaid assets test for the duration of the disabled person's life. Then, once again, Medicaid is first in line to get paid back. So it is not the case that money goes to cousins or parents' alma mater while the government gets stiffed.
What I don't understand is what happens if there's money left in the trust fund after the disabled person dies and all Medicaid obligations have been paid back. Then what? (Of course it is probably true that the richer you are, the better the lawyers you can hire, and the better the deal you can get - that never changes...)
[*] This may be a negotiated partial repayment in order to have some money left for a trust fund, according to some recent NY legal decisions, but here be dragons. Or at least, legal fine print. Possibly all of this applies only to NY, and other states have different rules.
posted by RedOrGreen at 1:31 PM on July 15, 2013
What I don't understand is what happens if there's money left in the trust fund after the disabled person dies and all Medicaid obligations have been paid back. Then what? (Of course it is probably true that the richer you are, the better the lawyers you can hire, and the better the deal you can get - that never changes...)
It depends on the trust, but generally in the case of a special needs trust, once governmental assistance programs are repaid, the money goes to the heirs of the beneficiary.
posted by mygoditsbob at 1:48 PM on July 15, 2013 [1 favorite]
It depends on the trust, but generally in the case of a special needs trust, once governmental assistance programs are repaid, the money goes to the heirs of the beneficiary.
posted by mygoditsbob at 1:48 PM on July 15, 2013 [1 favorite]
The supplemental needs trust fund differs from regular trust funds. Here a primer by NAMI to help the families of mentally ill people understand how they work. I have absolutely no objection in having the State be reimbursed of its Medicaid expenses, if the money in the trust has been used to improve my son's life before.
posted by francesca too at 2:04 PM on July 15, 2013
posted by francesca too at 2:04 PM on July 15, 2013
Now imagine if he had gotten it 5 years earlier. He might be speaking in simple full sentences, or at least have a few more single words, or better abilities to use PECs for communication.
Now imagine if the government could pay caregivers and institutions more than what Judge Glen describes as "the shit payments they get from Medicaid." Maybe the majority of people in these situations who don't have multimillion-dollar trust funds could get to go out to a restaurant sometime or get to try new communication devices. Sure, there are places that really strive (and have a decent private funding base) like The 10th Regiment of Foot's facility, but minimal sensible "luxuries" should be available to all severely disabled adults. That's not going to happen if Medicaid pays the bare minimum needed to ward off immediate starvation.
posted by zachlipton at 2:08 PM on July 15, 2013 [7 favorites]
Now imagine if the government could pay caregivers and institutions more than what Judge Glen describes as "the shit payments they get from Medicaid." Maybe the majority of people in these situations who don't have multimillion-dollar trust funds could get to go out to a restaurant sometime or get to try new communication devices. Sure, there are places that really strive (and have a decent private funding base) like The 10th Regiment of Foot's facility, but minimal sensible "luxuries" should be available to all severely disabled adults. That's not going to happen if Medicaid pays the bare minimum needed to ward off immediate starvation.
posted by zachlipton at 2:08 PM on July 15, 2013 [7 favorites]
So it is not the case that money goes to cousins or parents' alma mater while the government gets stiffed.
The wikipedia page about this and the NAMI page francesca too linked to both suggest that this only applies to self-settled trusts and not to "third party" trusts.
I'd be tickled to be wrong, but the way I'm reading it makes it look like this is legal:
(1) Parents establish trust for the benefit of adult disabled child with their money, appointing someone else as trustee.
(2) They die, trust pays for supplemental care while the child lives or until it is exhausted, while the state pays for the primary care. The state has no claim on these funds for reimbursement of medicaid care.
(3) Child dies.
(4) The trust document says that when this happens, the remaining money goes to the alma mater, or some cousins, or whatever. The state has no claim on the remaining funds.
...which annoys me, whether the amount in question is $5 or $5M.
posted by ROU_Xenophobe at 2:35 PM on July 15, 2013
The wikipedia page about this and the NAMI page francesca too linked to both suggest that this only applies to self-settled trusts and not to "third party" trusts.
I'd be tickled to be wrong, but the way I'm reading it makes it look like this is legal:
(1) Parents establish trust for the benefit of adult disabled child with their money, appointing someone else as trustee.
(2) They die, trust pays for supplemental care while the child lives or until it is exhausted, while the state pays for the primary care. The state has no claim on these funds for reimbursement of medicaid care.
(3) Child dies.
(4) The trust document says that when this happens, the remaining money goes to the alma mater, or some cousins, or whatever. The state has no claim on the remaining funds.
...which annoys me, whether the amount in question is $5 or $5M.
posted by ROU_Xenophobe at 2:35 PM on July 15, 2013
Looking at the NAMI page, parents can't establish a third-party trust, so I don't know why that's a concern in this case.
Marie couldn't have established a third-party trust with Mark as the beneficiary, unless they were using some other loophole.
posted by muddgirl at 4:02 PM on July 15, 2013
The person establishing the trust must have no legal obligation to support the disabled individual.The trustee is not necessarily the person establishing the trust.
Marie couldn't have established a third-party trust with Mark as the beneficiary, unless they were using some other loophole.
posted by muddgirl at 4:02 PM on July 15, 2013
The person establishing the trust must have no legal obligation to support the disabled individual.
From what I gather from other pages, this just means that you have to create the trust after the child is 21 (or whatever the age of emancipation is in your state) so that the parental obligation has ended.
posted by ROU_Xenophobe at 5:04 PM on July 15, 2013
From what I gather from other pages, this just means that you have to create the trust after the child is 21 (or whatever the age of emancipation is in your state) so that the parental obligation has ended.
posted by ROU_Xenophobe at 5:04 PM on July 15, 2013
...which annoys me, whether the amount in question is $5 or $5M.
Why? Think about it this way:
If these trusts didn't exist, the parents could accomplish basically the same thing by leaving the money to, say, their daughter and instructing her how to use it for their son's care. The supplemental needs trust provides a much more accountable and enforceable version of this, while resolving some tax problems. The only way to really do what you want would be for the government to be able to take the assets of anyone with a severely disabled, now adult, child to repay benefits. That's just not workable, as we don't hold parents financially responsible for their adult children's needs.
Finally, the number of trusts we're talking about here is really quite small. There just aren't that many millionaires with severely disabled children, and the amount of money left over may be pretty small by the time it pays for decades of needs. I can't see a real impact on Medicaid/SSI/etc... funds if the rules were changed.
posted by zachlipton at 5:42 PM on July 15, 2013 [1 favorite]
Why? Think about it this way:
- Parents have an adult disabled son. He receives a basic level of funding toward his care from the government, as he is unable to work and requires caretakers for basic needs.
- Because the parents love their son and are able to do so, they use some of their own money to try to improve the quality of his life. In other words, they give him gifts like a special trip out to lunch, pay for therapies, or hook him up with a communicative device and someone to help him learn to use it. In other words: supplemental needs (that's why we in the US sometimes call these things "supplemental needs trusts").
- At some point, parents realize their son will likely outlive them. They would like for their son to continue to get some of these gifts after they die or are unable to provide them. They are fortunate enough to have some amount of assets (and/or a life insurance benefit) that they can set aside in a trust for this purpose.
- After the parents are gone, the trust (if it isn't being run by a greedy or uncaring trustee) continues to make such gifts and arranges for son's supplemental needs. The money in the trust is not and never has been the son's money.
- Son dies. If any money is left in the trust, it is distributed according to the parents' instructions.
If these trusts didn't exist, the parents could accomplish basically the same thing by leaving the money to, say, their daughter and instructing her how to use it for their son's care. The supplemental needs trust provides a much more accountable and enforceable version of this, while resolving some tax problems. The only way to really do what you want would be for the government to be able to take the assets of anyone with a severely disabled, now adult, child to repay benefits. That's just not workable, as we don't hold parents financially responsible for their adult children's needs.
Finally, the number of trusts we're talking about here is really quite small. There just aren't that many millionaires with severely disabled children, and the amount of money left over may be pretty small by the time it pays for decades of needs. I can't see a real impact on Medicaid/SSI/etc... funds if the rules were changed.
posted by zachlipton at 5:42 PM on July 15, 2013 [1 favorite]
Wait. I'm missing what happened to Charles, the first boy she adopted, Mark's brother? Did I skip over it somewhere?
posted by mooza at 7:05 PM on July 15, 2013
posted by mooza at 7:05 PM on July 15, 2013
Son dies. If any money is left in the trust, it is distributed according to the parents' instructions.
Why should the state be entitled to that money after step 5?
Because (a) the state spent hundreds of thousands to millions of dollars on the child's care and (b) levels of general taxation are insufficient to support all disabled people at a decent level. Honestly, I wouldn't care very much if the US's taxation scheme were at sufficient levels to pay for care without means-testing it. But it isn't, so well-off people trying not just to avoid already low levels of taxation while they provide their children with extensive benefits, but also to put the government they're attempting not to pay on the hook for as much of that care as possible, are a bit irksome.
The only way to really do what you want would be for the government to be able to take the assets of anyone with a severely disabled, now adult, child to repay benefits.
Actually, it would be pretty simple: expand the definition of which distributions from the trust count as income to the beneficiary, and tax them.
Or, again, just have higher levels of overall taxation and provide benefits to all who need them.
posted by ROU_Xenophobe at 7:41 PM on July 15, 2013
Why should the state be entitled to that money after step 5?
Because (a) the state spent hundreds of thousands to millions of dollars on the child's care and (b) levels of general taxation are insufficient to support all disabled people at a decent level. Honestly, I wouldn't care very much if the US's taxation scheme were at sufficient levels to pay for care without means-testing it. But it isn't, so well-off people trying not just to avoid already low levels of taxation while they provide their children with extensive benefits, but also to put the government they're attempting not to pay on the hook for as much of that care as possible, are a bit irksome.
The only way to really do what you want would be for the government to be able to take the assets of anyone with a severely disabled, now adult, child to repay benefits.
Actually, it would be pretty simple: expand the definition of which distributions from the trust count as income to the beneficiary, and tax them.
Or, again, just have higher levels of overall taxation and provide benefits to all who need them.
posted by ROU_Xenophobe at 7:41 PM on July 15, 2013
Well, I have special needs family members who are going to need something like this after my parents, who raised them, are gone. I sort of see the point of wanting to recapture (claw back is the usual term) monies from a wealthy family who may arguably be seen to have been sponging off the system, but I think the reality of these things, as zachlipton says, is that most of the real cases are not some filthy rich clan of moneybags -- it's people who managed to scrape together a settlement or donations/bequests/inheritances that are just enough to sustain these supplemental needs for the duration of the recipient's life. I'm hoping that by the time of my death there may be as much as a couple million to speak of, but that's not really a lot -- maybe $35K in interest annually, more if you're more aggressively invested -- and even if you allow for depletion, if you end up with a serious illness for any of them, I dunno what would happen.
The thing is, the way that the Medicaid system works, you need to have the assets protected, at arm's length, from the beneficiary. If you allow that at all, you're allowing for basically any amount of assets. If you allow claw-back, you need to have some very well thought out rules so that the government can't just claw back from any family member or entity that's been supporting them.
posted by dhartung at 3:51 AM on July 16, 2013
The thing is, the way that the Medicaid system works, you need to have the assets protected, at arm's length, from the beneficiary. If you allow that at all, you're allowing for basically any amount of assets. If you allow claw-back, you need to have some very well thought out rules so that the government can't just claw back from any family member or entity that's been supporting them.
posted by dhartung at 3:51 AM on July 16, 2013
Son dies. If any money is left in the trust, it is distributed according to the parents' instructions.
You are assuming too much. What if the son has heirs? What if the son set up his own trust prior to beconing a ward? There are too many variables to apply a one-size solution and that is the reason for probate court.
posted by The 10th Regiment of Foot at 4:34 AM on July 16, 2013
You are assuming too much. What if the son has heirs? What if the son set up his own trust prior to beconing a ward? There are too many variables to apply a one-size solution and that is the reason for probate court.
posted by The 10th Regiment of Foot at 4:34 AM on July 16, 2013
Wait. I'm missing what happened to Charles, the first boy she adopted, Mark's brother? Did I skip over it somewhere?
I was wondering this as well.
You didn't skip it. It isn't there.
posted by zizzle at 5:55 AM on July 16, 2013
I was wondering this as well.
You didn't skip it. It isn't there.
posted by zizzle at 5:55 AM on July 16, 2013
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Hey, lady, enough of the fancy, schmancy legal mumbo-jumbo. Tell us what you really think.
posted by yoink at 10:04 AM on July 15, 2013 [27 favorites]