QUESTION
Whether a trust established for S. S~, the number holder (NH) and a Supplemental Security
Income (SSI) recipient, is a valid special needs trust for determining NH’s resources
and eligibility for SSI.
OPINION
The trust is not a valid special needs trust for determining NH’s resources and eligibility
for SSI. However, the trust is irrevocable under Florida law because NH has no legal
authority to revoke or terminate the trust or direct the use of the trust principal.
Nevertheless, because the Trustee can make payments to and for the benefit of NH,
the portion of the Trust from which the Trustee can make payments and that is attributable
to NH would be a resource for determining NH’s eligibility for SSI.
BACKGROUND
According to the information provided, NH is 47 years old (DOB: 1972). The Social
Security Administration (agency) found her disabled effective March 3, 2017. NH is
the settlor/grantor and beneficiary of the S. S.~ Self Settled Special Needs Trust
(Trust), established on October 25, 2018. Trust, Art. I; Art. 16, § B; Grantor’s Execution
and Creation. The Trust designates its purpose as the health, education, maintenance,
and support of NH. Trust, Art. 4. NH is the sole beneficiary and her interests take
priority over the interests of any remainder beneficiaries. See Trust, Art. 8, § A, No. 4.
NH initially funded the Trust with litigation settlement monies and such funds must
be titled solely in the name of the Trust. See Trust, Art. 3, Nos. 1, 2. A third party may transfer other property to the Trustee
with the consent of the Trustee as a gift to the Trust. See Trust, Art. 3, No. 3. The third party may not reclaim the gifted property. Seeid. However, the underlying Trust funding settlement terms contain a “Claw Back” provision
as an “integral part” of the settlement, which could result in a transfer of Trust
assets. Seeid.
The Trust is composed of three separate subtrusts for dividing assets. Trust, Art.
2, No. 1. These subtrusts are: the Settlement Protection subtrust, the Special Needs
subtrust, and the Medicare Set-Aside subtrust, which is administered as part of the
Special Needs subtrust. Seeid.; Trust, Art. 17, Nos. 17, 25. The Settlement Protection subtrust is a vehicle to
hold funds, manage investments, and enrich the life of NH. See Trust, Art. 4, No. 1. The Special Needs subtrust permits the use of Trust assets
to supplement, and not to supplant, any benefits or assistance of any Federal or state
governmental entity that NH may receive. Seeid.; Trust, Art. 17, No. 25. The Medicare Set-Aside subtrust segregates a share of the
Trust principal and income as a Medicare Set-Aside Arrangement in accordance with
the provisions of the Social Security Act. Trust, Art. 17, No. 17. However, neither
such segregation of Trust principal into the Medicare Set-Aside subtrust, nor payment
of medical expenses from the Medicare Set-Aside subtrust, limits the Trustee’s powers
or impairs the absolute discretion provided to the Trustee regarding distributions
or allotments from the Trust. Seeid.
The Trustee has broad authority and discretion regarding allocations of Trust assets
and distributions from the Trust. See Trust, Art. 10, § B. For instance, the Trustee has the power to initially allocate
the Trust assets to the Settlement Protection subtrust and the Trustee has discretion,
at any time after the Settlement Protection subtrust is initially funded, to transfer
assets from the Settlement Protection subtrust to the Special Needs subtrust. See Trust, Art. 2, No. 2; Art. 3, No. 4. Art. 10, No. 2. However, “[t]he decision to
distribute funds [from the Settlement Protection subtrust to the Special Needs subtrust]
rests solely at the discretion of [the] Trustee.” Trust, Art. 5, No. 3. The Trustee
“shall have the discretion to fund either the Settlement Protection Subtrust, or any
Subtrust, or to transfer funds from and among the Subtrusts.” Trust, Art. 3, No. 3.
Additionally, the Trustee with “sole and absolute discretion, has the power to postpone
or suspend any principal distribution, for any definite or indefinite period.” Trust,
Art. 10, § B, No. 16.
NH has no right or ability to compel disbursements. See Trust, Art. 8, § A, No. 1; Art. 7; Art. 8, § D, No. 6; Art. 18, No 57. The Trust
agreement specifies that NH has no control over the Trust pursuant to Program Operations
Manual System (POMS) SI 01120.200.B.10. See Trust, Art. 8, § A, No. 2. The Trust agreement also specifies that NH may not revoke
or terminate the Trust. See Trust, Art. 8, § A, No. 2, § D, No. 6. Further, the Trust agreement indicates that
the Trust is irrevocable, noting that subject to the limited exception to preserve
compliance with the requirements of 42 U.S.C. § 1396p and applicable POMS:
-
[N]o person shall have any right or power, whether alone or in conjunction with others,
in whatever capacity (i) to alter, amend, revoke, or terminate this Trust, or any
of the terms of this Agreement, in whole or in part; (ii) to designate the persons
who shall possess or enjoy the Trust Assets, and the income therefrom during his lifetime;
or (iii) to exercise any of the incidents of ownership in any property transferred
to the Trust.
Trust, Art. 18, No. 56. However, the Trust Protector may terminate the Trust if he
determines it no longer serves a good and valuable purpose and direct that the Trust
assets be fully paid out to the Beneficiary or Guardian. See Trust, Art. 12, No. 10. Before doing so, the Trust Protector must first satisfy any
and all repayment liabilities which may exist to “the State Medicaid agency.” Id.
Additionally, NH has no right or ability to assign, pledge, encumber, anticipate,
sale, or transfer in any manner any interest in the Trust or any Trust asset. See Trust, Art. 18, No. 57. Likewise, NH has no interest in the Trust that, while in
the possession of the Trustee, can be liable for or subject to her debts, contracts,
obligations, liabilities, or torts. Seeid. The Trust agreement further specifies that neither NH nor her spouse may serve as
a Trustee or Successor Trustee. See Trust, Art. 10, § A, No. 1.
Upon NH’s death, the state Medicaid agency will receive reimbursement from all monies
and assets remaining in the Special Needs subtrust up to an amount equal to the total
medical assistance paid on behalf of NH under the state plan. See Trust, Art. 9, § B, No. 5. There is no provision addressing state Medicaid agency
reimbursement from assets held in the Settlement Protection subtrust. See Trust, Art. 5. The Special Needs subtrust repayment will be made to all appropriate
state Medicaid agencies from which NH received benefits during her life. Seeid. If NH received medical assistance from more than one state, the trust will repay
each state that provided medical assistance. See Trust, Art. 9, § B, No. 6. Further, if NH received payment from other assistance
programs, the claim of the state Medicaid agency furnishing medical assistance will
be repaid before any other assistance programs are repaid. See Trust, Art. 9, § B, No. 7. The Trust document notes that in the event NH received
benefits from more than one state’s Medicaid agency, and “[i]f the Special Needs Subtrust
has insufficient assets to repay all medical assistance benefits received, then each
State shall be paid its proportionate share of the remaining Trust Assets.” Trust,
Art. 9, § B, No. 6. However, the Trust contains no provision regarding repayment of
such a shortfall to a single state’s Medicaid agency, and reimbursement in that case
is limited to funds from the Special Needs subtrust, with no contribution from the
Settlement Protection subtrust or from the overall Trust as a whole. See Trust, Art. 9, § B, No. 5. “Trust Assets” are “all real or personal assets transferred
to the trustee(s) under this Trust agreement as the body or object of the trust.”
Trust, Art. 17, No. 30.
The Trust agreement specifies that it is to be construed, regulated, and governed
in accordance with the laws of the state of Florida. See Trust, Art. 16, § 1; Art. 18, No. 46; Acceptance and Execution by Trustee. In a telephone
interview, Glen Armand, the president of Eastern Point Trust Company (Eastern Point),
the Trustee, explained that he signed the Trust document on behalf of a “Committee
of Trustees.” The Committee of Trustees is composed of attorneys and trust companies
from each of the states where Eastern Point does business, and that they associate
with a number of attorneys and trust companies from Florida. Mr. Armand stated Eastern
Point manages a number of the trusts located in Florida with associated trustees located
in Florida. He also stated Eastern Point has been doing business in Florida since
2012.
DISCUSSION
A. Special Needs Trust Analysis
SSI is a general public assistance program for aged, blind, or disabled individuals
who meet certain income and resource restrictions and other eligibility requirements.
See Social Security Act (Act) §§ 1602, 1611(a); 20 C.F.R. §§ 416.110, 416.202 (2020).[5] “Resources” include cash or other liquid assets or any real or personal property
that an individual owns and could convert to cash to be used for his or her support
and maintenance. 20 C.F.R. § 416.1201(a); accord POMS SI 01110.100.B.1; POMS SI 01120.010.B. “If the individual has the right, authority or power to liquidate the property
or his or her share of the property, it is considered a resource. If a property right
cannot be liquidated, the property will not be considered a resource of the individual
. . . .” 20 C.F.R. § 416.1201(a)(1); accord POMS SI 01110.100.B.1, .B.3; POMS SI 01110.115.A; POMS SI 01120.010.B.
Pursuant to section 1613(e) of the Act, the agency generally must consider the principal
or corpus of a trust established with the assets of an individual to be a resource
of the individual. Act § 1613(e)(1)-(3); POMS SI 01120.201.A.1. However, certain exceptions are provided for trusts established in accordance
with section 1917(d)(4) of the Act. Act § 1613(e)(5); POMS SI 01120.201.A.1; POMS SI 01120.203.A. Special needs trusts are one such exception. See Act § 1917(d)(4)(A); POMS SI 01120.203.A. To qualify as a special needs trust, trusts established after December 13, 2016,
must: (1) contain the assets of an individual under age sixty-five who is disabled
as defined by the Act; (2) be established for the benefit of the individual by the
individual, a parent, grandparent, legal guardian, or court; and (3) provide that
“the State will receive all amounts remaining in the trust upon the death of such
individual up to an amount equal to the total medical assistance paid on behalf of
the individual under a State plan under [Title XVIII of the Act].” Act § 1917(d)(4)(A);
see POMS SI 01120.203.C.1.
The Trust, established on October 25, 2018, satisfies the first requirement of a special
needs trust because NH is under age sixty-five and the agency has found her disabled.
The Trust also meets the second requirement because NH is the settlor/grantor of the
Trust and she created the Trust solely for her benefit. See Trust, Art. I; Art. 16, § B; Grantor’s Execution and Creation; Art. 4; Art. 8, §
A, No. 4.
However, the Trust does not meet the third requirement because it does not sufficiently
provide that when NH dies, the Trustee will use any remaining Trust assets to repay
any state that provided medical assistance or benefits to NH during her lifetime.
See Act § 1917(d)(4)(A); POMS SI 01120.203.C.1. On its face, the Trust contains language stating the intent to “meet[] the requirements
of a first party Special Needs Trust located at 42 U.S.C. § 1382b(e)(5) and implementing
Social Security Administration policies set.” Trust, p. 9, 42 U.S.C. §
1396p(d)(4)(A) Review for Special Needs Trusts Only. Indeed, this provision asserts, “[t]he Trust provides specific language to reimburse
all State Medicaid agencies up to an amount equal to the total medical assistance
paid on behalf of the Beneficiary under any State’s Medicaid plan as set forth in
this Trust document.” Trust, p. 9, 42 U.S.C. § 1396p(d)(4)(A) Review
for Special Needs Trusts Only, No. 5. However, only two of the subtrusts – the Special Needs subtrust and the Medicare
Set-Aside subtrust – actually contain and are subject to a specific provision regarding
state Medicaid agency reimbursement. See Trust, Art. 9, § B, No. 5. The remaining subtrust – the Settlement Protection subtrust
– contains no such s tate Medicaid agency reimbursement provision and the potential
exists that assets held in that subtrust at NH’s death would be sheltered from reimbursement.
Only the Special Needs subtrust contains a State Medicaid agency reimbursement clause,
stating expressly that any such reimbursement will come from “all monies and assets
remaining in the Special Needs subtrust .” Id. (emphasis added). The Trustee administers the Medicare Set-Aside subtrust as part
of the Special Needs subtrust, and thus, it presumably falls under this reimbursement
provision. See Trust, Art. 2, No. 1; Art. 17, Nos. 17, 25. Indeed, the Medicare Set-Aside subtrust
segregates a share of the Trust principal and income to be administered as a Medicare
Set-Aside Arrangement in accordance with the provisions of the Act. See Trust, Art. 17, No. 17.[6]
In contrast, the Settlement Protection subtrust contains no corresponding Medicaid
reimbursement provision. See Trust, Art. 4, No. 1; Art. 5. By specifying that the state Medicaid agency reimbursement
provision applies only to assets in the Special Needs subtrust, without any provision
addressing assets in the Settlement Protection subtrust, assets contained in the Settlement
Protection subtrust on NH’s death could be sheltered from any Medicaid repayment requirement.
Because this possibility exists, the Trust does not provide that “the State will receive
all amounts remaining in the trust upon the death of [NH]” equal to the total medical assistance NH received under any
state Medicaid plan. Act § 1917(d)(4)(A) (emphasis added); see POMS SI 01120.203.C.1.[7]
Coupling this exclusion of Settlement Protection subtrust assets from state Medicaid
agency reimbursement with the unfettered discretion of the Trustee regarding Trust
Asset allocation among the three subtrusts, any interpretation that the Trust meets
the requirements of a valid special needs trust is further undermined. See Act § 1613(e)(5); POMS SI 01120.201.A.1; POMS SI 01120.203.A; Trust, Art. 10, § B. Although the Trustee has discretion, at any time after the
Settlement Protection subtrust is initially funded, to transfer assets from the Settlement
Protection subtrust to the Special Needs subtrust, there is no requirement that the
Trustee do so. See Trust, Art. 10, No. 2. “The decision to distribute funds [from the Settlement Protection
subtrust to the Special Needs subtrust] rests solely at the discretion of [the] Trustee.”
Trust, Art. 5, No. 3. The Trustee “shall have the discretion to fund either the Settlement
Protection Subtrust, or any Subtrust, or to transfer funds from and among the Subtrusts.”
Trust, Art. 3, No. 3. Moreover, the Trustee has “sole and absolute
discretion , . . . to postpone or suspend any principal distribution, for any definite or indefinite
period.” Trust, Art. 10, § B, No. 16 (emphasis added). Thus, the Trustee could segregate
assets in the sheltered Settlement Protection subtrust simply by exercising the discretion
to refrain from allocation. Alternatively, the Trustee could transfer assets from
the Special Needs subtrust to the Settlement Protection subtrust at any time per his
or her unfettered discretion. The Trustee could thereby protect such assets from the
state Medicaid agency reimbursement provisions of the Special Needs subtrust.[8] Thus, because the express language of the Trust agreement creates a possibility that
Trust assets could be protected from state Medicaid reimbursement, the Trust does
not meet the state Medicaid reimbursement requirement of a valid special needs trust
under the Act. See Act § 1917(d)(4)(A); POMS SI 01120.203.C.1
Additionally, the Trust agreement’s reference to the initial funding settlement agreement’s
Claw Back provision, an “integral part” of that settlement, raises further concerns
that funds previously transferred to the Trust could be subject to transfer out of
the Trust, thus exempting such funds from a state Medicaid agency reimbursement provision.
See Trust, Art. 3, No. 3. Although reference to this Claw Back provision is vague, with
little explanation of how it would work in practice, it nevertheless raises the potential
that the Trustee could transfer Trust assets on or before the death of NH and thus
remove those funds from consideration for Medicaid reimbursement purposes.
Finally, the Trust agreement’s early termination clause invalidates it as a special
needs trust because it does not refer to all the state agencies that might have provided
medical assistance. See Trust, Art. 12, No. 10. Specifically, the clause does not meet the POMS requirements
by explicitly providing that “the State(s), as primary assignee, would receive all
amounts remaining in the trust at the time of termination up to an amount equal to
the total amount of medical assistance paid on behalf of the individual under the
State Medicaid plan(s).” POMS SI 01120.199F.1.
Accordingly, the trust does not satisfy the third requirement for a valid special
needs trust of providing that when NH dies, the Trustee will use any remaining trust
assets to repay any state that provided medical assistance or benefits to NH during
her lifetime. Thus, the Trust is not a valid special needs trust in accordance with
section 1917(d)(4)(A) of the Act and the POMS. See Act § 1917(d)(4)(A); POMS SI 01120.203.C.1.
B. Revocability of the Trust
1. Federal Law
Although the Trust is not a valid special needs trust exempt from counting as a resource
under section 1613(e), the agency also applies its regular resource counting rules
to determine if the trust is a resource that may affect an individual’s eligibility
for SSI.[9] See POMS SI 01120.203.C.1; accord POMS SI 01120.200.A. A trust is a countable resource if the individual has legal authority to revoke
or terminate the trust and use the funds to meet his or her food or shelter needs,
or if the individual can direct the use of the trust principal for his or her support
and maintenance under the terms of the trust. See POMS SI 01120.200.D.1.a. Similarly, if an individual can sell his or her beneficial interest in the
trust, that interest is a resource. Seeid. Conversely, if an individual does not have legal authority to revoke or terminate
the trust or to direct the use of the trust assets for his or her own support and
maintenance, the trust principal is not a resource for SSI purposes. See POMS SI 01120.200.D.2.[10]
“If the individual at issue . . . is the grantor of the trust, the trust is usually
a resource to that individual if he or she can revoke the trust and reclaim the trust
assets.” POMS SI 01120.200.B.11.[11] “Some states follow the general principle of trust law that if a grantor is also
the sole beneficiary of a trust, the trust is revocable regardless of language in
the trust to the contrary.” POMS SI 01120.200.D.3; see also POMS SI ATL01120.201.B (“Laws for each state in the Atlanta Region follow the general principle of trust
law that if a grantor is also the sole beneficiary of a trust, the trust is revocable
regardless of language in the trust document to the contrary.”). “However, many .
. . States recognize that the grantor cannot unilaterally revoke the trust if there
is a named ‘ residual beneficiary ’ in the trust document who would, for example,
receive the principal upon the grantor’s death or the occurrence of some other specific
event.” POMS SI 01120.200.D.3; see also POMS SI ATL01120.201.B (stating that “ if there is a residual beneficiary properly designated in the trust
document, then the trust is irrevocable by its terms and is not a resource for SSI
purposes”). “A residual beneficiary . . . is not a current beneficiary of a trust,
but he or she will receive the residual benefit of the trust contingent upon the occurrence
of a specific event, such as the death of the primary beneficiary.” POMS SI 01120.200.B.10; accord POMS SI 01120.200.D.3. To determine whether the Trust is revocable, the agency must look at the terms
of the Trust and applicable state law. See POMS SI 01120.200.D.2 (“The revocability of a trust . . . depend[s] on the terms of the trust agreement
and on State law.”).
The Settlor created the Trust under Florida law, and Florida law governs the Trust
agreement, according to the Trust terms. Further, Glen Armand confirmed that he signed
the trust on behalf of a Committee of Trustees, composed of attorneys and trust companies,
some of whom reside and operate in Florida; that Eastern Point manages a number of
the trusts located in Florida with associated trustees located in Florida; and that
Eastern Point has been doing business in Florida since 2012. Therefore, we look to
Florida law to determine whether the Trust is revocable. See POMS SI 01120.200.D.2; see also Fla. Stat. Ann. § 736.0107 (West 2020)[12] (stating “[t]he meaning and effect of the terms of a trust are determined by . .
. [t]he law of the jurisdiction designated in the terms of the trust, provided there
is a sufficient nexus to the designated jurisdiction at the time of the creation of
the trust or during the trust administration, including, but not limited to, the location
of real property held by the trust or the residence or location of an office of the
settlor, trustee, or any beneficiary”).
2. State Law
In Florida, a trust is created only if: (a) the settlor has capacity to create a trust;
(b) the settlor indicates an intent to create the trust; (c) the trust has a definite
beneficiary or is a charitable trust, a trust for the care of an animal, or a trust
for a noncharitable purpose; (d) the trustee has duties to perform; and (e) the same
person is not the sole trustee and sole beneficiary. Fla. Stat. Ann. § 736.0402(1).
“A beneficiary is definite if the beneficiary can be ascertained now or in the future,
subject to any applicable rule against perpetuities.” Fla. Stat. Ann. § 736.0402(2).
“Once created, a valid trust cannot be altered, amended, or revoked except by the
exercise of a power identified in the trust.” L’Argent v. Barnett Bank, 730 So. 2d 395, 396 (Fla. Dist. Ct. App. 1999), cited inLittell v.
Law Firm of Trinkle, Moody, Swanson, Byrd & Colton, 345 F. App’x 415, 419 (11th Cir. 2009).
“The polestar of trust . . . interpretation is the settlor’s intent.” Bryan v.
Dethlefs, 959 So. 2d 314, 317 (Fla. Dist. Ct. App. 2007); see Fla. Stat. Ann. § 736.1101(1). “In determining the settlors’ intent, the court should
not resort to isolated words and phrases; instead, the court should construe the instrument
as a whole, taking into account the general dispositional scheme.” Roberts v. Sarros, 920 So. 2d 193, 195 (Fla. Dist. Ct. App. 2006) (internal quotation marks omitted);
seeLittell, 345 F. App’x at 419; Bryan, 959 So. 2d at 317; L’Argent, 730 So. 2d at 397. When the terms of a trust are clear and unambiguous, “the settlors’
intent as expressed in the trust controls and the court cannot resort to extrinsic
evidence.” Littell, 345 F. App’x at 419; seeBryan, 959 So. 2d at 317 n.2; L’Argent, 730 So. 2d at 397.
Under Florida law, “[u]nless the terms of a trust expressly provide that the trust
is irrevocable, the settlor may revoke or amend the trust.” Fla. Stat. Ann. § 736.0602(1).
“‘Revocable,’ as applied to a trust, means revocable by the settlor without the consent
of the trustee or a person holding an adverse interest.” Fla. Stat. Ann. § 736.0103(17).
Furthermore, a revocable trust:
-
“is created when a person, called the settlor, subjects property owned by him to a
trust for the benefit of at least one other person, reserving to himself as settlor-beneficiary
the income from the trust property for life and the power to revoke the trust in whole
or in part at any time. The other person or persons’ enjoyment of the trust is postponed
until the settlor’s death.” By definition, then, when a settlor sets up a revocable
trust, he or she has the right to recall or end the trust at any time, and thereby
regain absolute ownership of the trust property. This retention of control over property
distinguishes a revocable trust from the other types of conveyances . . . , i.e.,
gifts, deeds, wills, contracts, etc.
Fla. Nat’l Bank of Palm Beach Cnty. v. Genova, 460 So. 2d 895, 897 (Fla. 1985) (quoting E. Carr, Revocable Trusts, 5-6 (1980)); see
also Donna Litman, Revocable Trusts Under the Florida Trust Code, 34 Nova L. Rev. 1, 5 (2009) (“A revocable trust requires a transfer of ownership
or declaration of trust during lifetime as would an irrevocable trust; however, it
differs from an irrevocable trust because the settlor can amend or revoke the trust
and recall the transfer or the declaration during lifetime.”).
As noted above, in this case the terms of the Trust explicitly state, “[t]he Trust
is irrevocable and by its express terms does not provide the Beneficiary the right to revoke or
terminate the Trust.” Trust, Preamble (emphasis added); see Trust, Art. 8, § A, No. 2, § D, No. 6. The Trust agreement further notes that subject
to a limited exception to preserve compliance with the requirements of the Act, no
one has any right or power to alter, amend, revoke, or terminate the Trust. Trust,
Art. 18, No. 56. Additionally, under the terms of the Trust, NH has no control over
the Trust pursuant to POMS SI 01120.200.B.10. Trust, Art. 8, § A, No. 2. Further, NH may not assign, pledge, anticipate,
encumber, sale, or transfer her interest in the Trust or any Trust assets. See Trust, Art. 18, No. 57. Likewise, NH has no interest in the Trust that can be liable
for or subject to her debts, contracts, obligations, liabilities, or torts. Seeid. The Trustee has sole discretion regarding disbursement and NH has no right or ability
to compel disbursements. See Trust, Art. 8, § A, No. 1; Art. 7; Art. 8, § D, No. 6; Art. 18, No 57. Additionally,
NH and her spouse are prohibited from serving as a Trustee or Successor Trustee of
the Trust. See Trust, Art. 10, § A, No. 1. Thus, the Trust contains sufficient indication that it
was intended to be irrevocable.
Moreover, a trust is irrevocable if it sufficiently identifies a residual beneficiary.
See POMS SI ATL01120.201.B. “A residual beneficiary, while not a current beneficiary of a trust, is named
to receive the benefit of the trust after a specific event occurs, e.g., the death
of the primary beneficiary.” POMS SI ATL01120.201.C. State laws generally differ regarding the language needed to designate a residual
beneficiary. See POMS SI ATL01120.201.C.1. In Florida, a trust may designate a residual beneficiary with general, non-specific
terms such as “to my estate.” SeeCutler v.
Cutler, 994 So. 2d 341, 342-43 (Fla. Dist. Ct. App. 2008) (holding trust provision leaving
real property assets to beneficiary’s estate upon her death was effective to create
a residuary beneficiary in the estate and subjected real property to payment of estate’s
debts); POMS SI ATL 01120.201.C.6 (stating Florida recognizes generalized wording
as sufficient to name a residual beneficiary). The Trust here named a valid residual
beneficiary because it provides that upon NH’s death, the Trustee shall distribute
the remaining Trust assets to such persons as NH names in her will, or if NH fails
to provide for such distribution in her will, then the Trustee shall distribute the
remaining assets to NH’s estate. See Trust, Art. 9, § C, No. 6. Because NH's Trust sufficiently identifies a residual
beneficiary, the Trust is not revocable by NH. See POMS SI ATL01120.201.B.
We believe the provisions listed above establish that NH’s Trust is irrevocable under
Florida law. Nothing in the Trust appears to grant NH the ability to control her Trust
account, revoke her Trust account, or sell her assets in or income from her Trust
account. See Fla. Stat. Ann. § 736.0103(15); L’Argent, 730 So. 2d at 397; Genova, 460 So. 2d at 897. Thus, reading the Trust agreement as a whole, we believe NH intended
her Trust account to be irrevocable and a Florida court would give effect to NH’s
intent based on the express language in the Trust agreement. SeeLittell, 345 F. App’x at 419; Bryan, 959 So. 2d at 317; Roberts, 920 So. 2d at 195; L’Argent, 730 So. 2d at 397.
Although the Trust is irrevocable under Florida law, POMS SI 01120.201D.2.a states:
In determining whether an irrevocable trust established with the assets of an individual
is a resource, we must consider how the trust can make payments. If the trustee can
make any payments to or for the benefit of the individual or individual’s spouse,
the portion of the trust from which the trustee can make payments and that is attributable
to the individual is a resource.
Here, the Trust agreement establishes that the Trustee can make payments to or for
the benefit of NH. See Trust, Art. 4; Art. 5, No. 2. Therefore, the portion of the Trust from which the
Trustee can make payments and that is attributable to NH would be a resource for determining
NH’s eligibility for SSI. See POMS SI 01120.201D.2.
CONCLUSION
The Trust is not a valid special needs trust under the Act. However, the Trust is
irrevocable under Florida law because NH has no legal authority to revoke or terminate
the Trust or direct the use of the Trust principal. Nevertheless, because the Trustee
can make payments to and for the benefit of NH, the portion of the Trust from which
the Trustee can make payments and that is attributable to NH would be a resource for
determining NH’s eligibility for SSI.