BASIC (01-05)

PS 01805.017 Indiana

A. PS 05-184 SSI-Indiana-Request from Atlanta Region for OGC Review of Property Jointly Owned by Husband an Wife in Indiana (Kenneth and Lorrie R~)-REPLY Your Reference: 2D5G6 SI 2-1-6 IN (R~) Our Reference: 05-120

DATE: June 27, 2005

1. SYLLABUS

Indiana Law states that unless there is evidence to the contrary, when a husband and wife enter into a written contract to purchase real-estate that purchase is entered into as tenancy in the entirety. Therefore, land in question may not be sold unless both parties consent to the sale to it.

2. OPINION

You have forwarded a question from the Atlanta Region asking whether a warranty deed conveying property in the State of Indiana to a husband and wife automatically creates a tenancy by the entirety, absent language to the contrary. For the following reasons, we believe that it does.

FACTS

On September 14, 1999, a corporate warranty deed was executed conveying real property in the State of Indiana to Kenneth J. R~ and Lorrie R~, husband and wife, for $10. The deed does not specify whether Mr. and Mrs. R~ took the land as a joint tenancy, a tenancy in common, or a tenancy in the entirety. Mrs. R~, who is a deemor for an SSI disabled child, is now separated from her spouse.

DISCUSSION

The parent of a disabled child is subject to resource limitations in order for the disabled child to receive SSI. POMS SI 01110.530(B)(2), 01330.200(A). A resource includes any real property that an individual has the right, authority, or power to convert to cash. POMS SI 01110.100(B)(1). Conversely, any real property that an individual does not have the right, authority, or power to convert to cash is not a resource. POMS SI 01110.100(B)(3).

POMS SI CHI0110.510(B) states that a husband and wife who own real property in Indiana as a tenancy in the entirety cannot transfer their ownership interest in the property without the consent of the other spouse. But the POMS does not indicate what is the default type of ownership when the type of ownership is not specified in the real estate contract. Indiana statutory law provides the answer to this question. The Indiana Code states that a written contract in which a husband and wife purchase real estate creates an estate by the entireties, unless the contract expressly creates a tenancy in common, or unless it appears from the tenor of the contract that the contract was intended to create a tenancy in common. Ind. Code § 32-17-3-1 (2005). Here, as the contract neither expressly creates a tenancy in common, and it does not appear from the tenor of the contract that the contract was intended to create a tenancy in common, under the Indiana statute, the contract created a tenancy in the entirety. The current statute is consistent with Indiana common law. Davis v. Clark, 26 Ind. 424 (1866). Thus, as the contract created a tenancy in the entirety, Mrs. R~ is unable to transfer her ownership interest in the property without the consent of Mr. R~. POMS SI CHI0110.510(B).

CONCLUSION

In conclusion, a warranty deed conveying property in the State of Indiana to a husband and wife automatically creates a tenancy by the entirety, absent evidence to the contrary.

B. PS 05-003 SSI-Regional Supplement on the Validity of Loans for Minors in Region V States (Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin)Your Reference Number: SI-2-1-10 Our Reference Number: 04S041

DATE: September 28, 2004

1. SYLLABUS

State law in most Region V states prevents formal and informal loan agreements entered into with minors from being enforceable against the minor parties. Each state has specific exceptions that may apply depending on the circumstances surrounding the loan agreement. For example, minors that have been emancipated by the court may enter into valid loan agreements in some states, and loans for necessities may be enforceable depending on state law. All states in Region V have specific laws regarding the ratification of a loan upon a minor attaining age of majority (age 18 in all states in Region V). Loans entered into with a minor must be examined closely to determine whether ratification has occurred and the loan is, therefore, enforceable.

2. OPINION

You asked for an opinion on whether loan agreements entered into by minors - whether formal or informal - are enforceable in the six states in Region V. In each of the six states in Region V, a contract, including a loan, entered into with a minor (defined as an individual who has not reached the age of eighteen) is generally voidable by the minor party, but not by the party who is of the age of majority. Such agreements, therefore, are not enforceable against minors, regardless of whether the loan contract is a formal, written agreement. However, some exceptions apply. Below is a general discussion of our conclusions and an outline of the particular rules for each state in Region V.

DISCUSSION

Assets are a resource for SSI purposes if the individual owns them and can convert them to cash for her support and maintenance. If the individual has the right, authority, or power to liquidate the property, it is a resource. Loan proceeds and payments and loan agreements may be considered a resource or income to the borrower and lender, and the rules for determining when a loan counts as a resource vary based on whether the underlying loan agreement is a bona fide loan. In order to constitute a bona fide loan, a loan must be enforceable under state law. You have asked whether a loan agreement entered into with a minor is enforceable under state law.

In all Region V states, minors generally lack the legal capacity to contract. The age of majority is eighteen in all Region V states. Loan agreements entered into with a minor, whether formal, written agreements or otherwise, therefore, are not enforceable under state law, because they are voidable at the option of the minor party. Certain exceptions apply, however, and some loans entered into with minors are enforceable. For example, if a minor takes out a loan for the purchase of necessities, the loan will be enforceable under state law. Additionally, in some states in Region V, a minor's loan is enforceable if the minor fraudulently represented that he was of the age of majority when he took out the loan. Further, a minor may ratify or disaffirm a loan upon attaining the age of majority; ratification renders the loan enforceable. The states in Region V generally require a clear, intentional act to constitute ratification. Some states in Region V dictate that a loan will be deemed ratified where a minor fails to disaffirm the loan within a reasonable time after attaining the age of majority.

The six states in Region V follow essentially similar rules regarding the enforceability of loans to which a minor is a party. However, some slight differences exist. Below we have outlined the particular rules for each state in Region V. Please use these outlines in drafting your POMS Regional Supplement. Our office would be happy to review your draft guidelines.

Illinois

Age of Majority

In Illinois, the age of a majority is eighteen.

General Rule

A loan agreement with a minor is not enforceable because the loan agreement is voidable by the minor party.

Exceptions

A minor who has been emancipated by court order may enter valid loan contracts, which are thus enforceable.

A loan with a minor is enforceable if it is entered into for the purpose of obtaining necessities; necessities includes items such as food, clothing, lodging, and education, but typically does not include automobiles, even if used to earn a living.

Ratification

A loan agreement becomes enforceable against a minor party if the minor, upon reaching the age of majority, ratifies the loan agreement. Illinois law allows a minor to either ratify a contract with an intentional act after reaching the age of majority, or to disaffirm the contract within a reasonable time or within the statute of limitations applicable to the type of loan at issue. Acts which may constitute ratification include making payments on a loan, or causing a loan contract to be recorded. In Illinois, if a minor fails to ratify a loan agreement upon attaining age of majority, the loan may nonetheless be deemed ratified, and thereby rendered enforceable against the minor, if he fails to disaffirm the loan agreement within any applicable statute of limitations. If you cannot clearly determine whether a disaffirmance has occurred within a reasonable time or within an applicable statute of limitations, please request a legal opinion from OGC.

Indiana

Age of Majority

In Indiana, the age of majority is eighteen.

General Rule

Any loan entered into with a minor is not enforceable because the loan contract is voidable at the minor's option. A minor may void his contract at any time prior to, or upon attaining, the age of majority. Whether emancipation affects the minor's right to disaffirm his contracts depends upon the scope of the emancipation. If you cannot clearly determine whether a minor's emancipation affects his ability to enter valid loan contracts, please consult OGC for a legal opinion.

Exceptions

A loan entered into by a minor who represented in writing that he was eighteen or over in obtaining the loan is enforceable.

Loans by minors for necessities are enforceable, so long as the minor is not living at home or otherwise being supported by his parents. Necessities include items such as food, clothing, lodging, medical services, and education as well as such provisions provided for the minor's spouse, but generally do not include automobiles. Medical services are considered necessities regardless of whether a minor is living at home or being supported by his parents.

Ratification

A minor may ratify a loan contract upon reaching the age of majority, rendering the loan enforceable. Ratification is not presumed, or deemed, to occur unless there is some affirmative act. A ratifying act may be done without the minor having explicit knowledge that his acts constitute a ratification or that he was not otherwise liable. However, ratification induced by fraud or undue influence is not valid and will not render a loan agreement enforceable. Whether a valid ratification has occurred depends on the facts of particular case, but the ratification should be in proportion to the nature of the original transaction. For example, if a minor party, after reaching the age of majority, agrees to pay, or makes a payment on, a simple loan which he entered into by himself while a minor, ratification has occurred.

Michigan

Age of Majority

The age of majority in Michigan is eighteen.

General Rule

A loan agreement with a minor is not enforceable because minors lack the legal capacity to contract and their contracts are voidable. Emancipation of a minor does not affect this general rule. However, if you have evidence of a minor's emancipation that indicates the minor may enter a valid contract, please request a legal opinion from OGC regarding whether that minor's loan is enforceable.

Exceptions

If a minor willfully misrepresented his age to obtain a loan, and if the misrepresentation was either made in writing in a separate instrument or admitted in open court, the loan is enforceable against the minor party. Such a loan may not be disaffirmed by the minor upon attaining the age of majority.

Loan agreements entered into by minors for the purchase of necessities are enforceable under state law. Necessities include items such as clothing and books for education.

Ratification

A loan is rendered enforceable in Michigan if a minor ratifies the loan with an affirmative act upon reaching the age of majority. Ratification consists of making a distinct acknowledgement of a loan contract and indicating an intention to be bound by it, for example by writing a letter acknowledging one's loan and promising to pay it. A minor may also disaffirm his loan upon attaining the age of majority. Silence may be sufficient to constitute ratification only where it would be inequitable to permit the defense of infancy. If a question arises as to whether a loan has been ratified based on silence, or a failure to disaffirm, please request a legal opinion from OGC.

Minnesota

Age of Majority

The age of majority in Minnesota is eighteen.

General Rule

Any loan agreement with a minor which has not been fully executed (performed) is not enforceable. A minor who enters a loan agreement by fraud may still disaffirm the contract. If you are presented with evidence of emancipation, or other evidence showing that a minor's loan obligation may be authorized by law, please consult with OGC for a legal opinion regarding whether the loan is enforceable.

Exceptions

A loan a minor enters for the purchase of necessities, however, is enforceable. Necessities includes items such as food, clothing, and lodging, but not transportation expenses.

Ratification

A minor party may affirm his loan by a ratifying act upon reaching the age of majority; the loan is then enforceable in Minnesota. A ratification consists of some word, act, or deed that indicates an intention to be bound by the loan. A minor also may disaffirm his loan within a reasonable time after attaining the age of majority. In Minnesota, unlike in the other states in Region V, a minor is required to return the proceeds of a loan in order to disaffirm the loan. If the minor does not actively disaffirm within a reasonable time of attaining majority, the loan will be considered ratified. The fact that a minor may be unaware of his right to disaffirm will not absolve him of his duty to act promptly in disaffirming the loan in order to avoid liability. If you cannot clearly determine whether a loan has been disaffirmed within a reasonable time, please request a legal opinion from OGC regarding whether the loan is enforceable.

Ohio

Age of Majority

In Ohio, the age of majority is eighteen.

General Rule

A loan entered into with a minor is not enforceable because the loan is voidable at the minor's option. If you are presented with evidence of emancipation, or other evidence showing that a minor's loan obligation may be authorized by law, please consult with OGC for a legal opinion regarding whether the loan is enforceable.

Exceptions

Loans entered into with a minor for the purchase of necessities are enforceable. To be enforceable, however, such loan contracts must be fair and reasonable, and must be made by the non-minor party in good faith and without knowledge of the minor's lack of capacity to contract. Necessities include "food, medicine, clothing, shelter, or personal services usually considered reasonably essential for the preservation and enjoyment of life."

Ratification

If a minor does not disaffirm his loan or other contract within a reasonable time after reaching the age of majority, ratification may be inferred from his voluntary actions, regardless of whether he had a definite intent to ratify the contract. For example, a minor who makes payments on a car loan and uses the car after reaching the age of majority is considered to have ratified his loan contract. In such a case, the loan agreement would then be rendered enforceable under state law. If you cannot clearly ascertain whether a loan has been disaffirmed by the minor upon reaching the age of majority, please request an opinion from OGC regarding whether the loan is enforceable under state law.

Wisconsin

Age of Majority

The age of majority in Wisconsin is eighteen.

General Rule

A loan entered into with a minor is not enforceable because it is voidable at the minor's option. This rule does not change depending on whether the minor is emancipated.

Exceptions

Loans to minors for the purpose of purchasing necessities are enforceable in Wisconsin. What constitutes necessities includes those items necessary for the minor's personal care and maintenance, but does not usually include cars.

Ratification

A minor may ratify a contract upon reaching the age of majority, and such ratification may be express or implied, as long as the intention to be bound by the contract is "clearly manifested." While ratification does not require express knowledge of the voidable act [or contract], it does require knowledge of "all material facts relating to the act." Thus, ratification may consist of simply being aware of one's interest in, and continuing to enjoy the benefits of, a loan contract entered into while a minor. Ratification renders the loan enforceable.

CONCLUSION

As discussed above, loans entered into with minors generally are not enforceable against the minor parties. Some exceptions apply, and certain loans of minors, such as those for necessities or those where a minor fraudulently misrepresents his age, may be enforceable, depending on the law of the minor's state. Further, a minor may ratify a loan upon attaining the age of majority, at which point the loan is rendered enforceable. Some states in Region V will deem ratification to occur if the minor fails to disaffirm his loan within a reasonable time upon attaining majority. If you cannot clearly determine whether a particular loan has been ratified and is thereby rendered enforceable, please request a legal opinion from OGC.

C. PS 04-141 Uniform Gifts to Minors Act - Andrea N S~ (~)

DATE: November 5, 1996

1. SYLLABUS

This opinion addresses whether an individual may make a gift or transfer of money, or other property, to a minor under state of Indiana's adoption of the Uniform Gifts to Minors Act. An analysis of the Indiana Code reveals that it does not restrict the transfer of a transferor's own property to his or her own self as custodian for the benefit of a minor

2. OPINION

This is with reference to your inquiry as to whether an individual may make a gift or transfer of money, or other property, to a minor under the Indiana's adoption of the Uniform Gifts to Minors Act. For the following reasons, we are of the opinion that this is permissible under Indiana State law.

The Uniform Gifts to Minors Act (UGMA) was originally approved by the National Conference of Commissioners on Uniform State Laws in 1956. Since that time the UGMA has been amended three times: in 1965, 1966, and again in 1983. Many states, including Indiana, substantially revised their versions of the UGMA following the enactment of the 1966 UGMA. Many states greatly expanded the kinds of property that could be made the subject of a gift under the Act. As a consequence, the National Conference of Commissioners on Uniform State Laws again revised the UGMA in 1983, allowing any kind of property, real or personal, tangible or intangible, to be made the subject of a transfer to a custodian for the benefits of a minor. See Uniform Transfers to Minors Act 1983 Act, Uniform Laws Annon., historical notes (West 1994). Because the revisions allowed for a wider variety of transfers, the Uniform Law was renamed the Uniform Transfers to Minors Act in 1983 to indicate the wider sweep of the Act. id.

Indiana repealed its 1966 Gifts to Minors Act in 1989 with P.L. 267-1989 and enacted its Uniform Transfers to Minors Act, Ind. Ann. Code 30-2-8.5-1 to 30-2-8.5-40. Section 30-2-8.5-18 of the Indiana Code provides for the nomination of a custodian by a transferror. The Indiana Code provides that "[c]ustodial property is created and a transfer is made if: . . . . money is paid or delivered to a broker or financial institution for credit to an account in the name of: . . . the transferor . . . followed by the words 'as custodian for (name of minor) under the Indiana Uniform Transfers to Minors act.'" Ind. Code Ann. § 30-2-8.5-24 (a)(2)(A). The Indiana Code makes similar provision for the transfer of uncertified securities, certified securities, ownership of a life or endowment insurance policy, an irrevocable exercise of a power of appointment, an irrevocable present right to future payment, interest in real property, or a certificate of title to tangible personal property. Ind. Code Ann. 30-2-8.5-24. The Indiana Code does not restrict the transfer of a transferor's own property to his or her own self as custodian for the benefit of a minor.

We should note that this practice has been viewed with dissatisfaction by the Internal Revenue Service. In a case involving a New York resident's transfer of securities to himself as custodian for his minor daughter, the United States Tax Court ruled that the securities were includable in his gross estate for tax purposes where he died prior to his daughter having reached the age of majority. The Court reasoned that the decedent had a legal obligation to support his daughter and that, as a custodian, he retained the right to use the income from the custodial property to discharge his legal obligation to support her. The Court alternatively reasoned that the property was includable in his gross estate since, as a custodian, he had the right as well as the power to pay over income and principal to his daughter at any time and thereby "terminate" the custodial arrangement. Estate of Chrysler v. Commissioner, 44 T.C. 55 (U.S. Tax Ct. 1965).*/ Although the decision of the Court was reversed on an unrelated basis, see Chrysler v. Commissioner, 361 F.2d 508 (2nd Cir. 1966), the court's rationale was reasserted in the case of Stuit v. Commissioner of Internal Revenue, 54 T.C. 580 (U.S. Tax Ct. 1970), where the United States Tax Court found that the value of securities which were transferred by a Illinois decedent to a minor under its UGMA was includable in the decedent's gross estate since, as custodian, he had the right as well as the power to pay over income and principal to his minor daughter, the beneficiary of the gift, at any time. id.

Thus, according to the Court, the decedent had the power to "terminate" the custodial arrangement. id. This rationale was upheld on appeal by Stuit v. Commissioner, 452 F.2d 190 (7th Cir. 1971). Furthermore, the National Conference of Commissioners on Uniform State Laws has recognized the unfavorable precedent and stated that "[i]n view of [Rev. Rul. 59-357] and [Chrysler], it is undesirable for a donor to act as a custodian for his own gift under either the Model or the Uniform Act." Uniform Transfers to Minors Act 1983 Act, Uniform Laws Annon., historical notes (West 1994).

Given the broad nature of your inquiry as to whether a transfer of property may be made under Indiana State law where the transferor names himself as the custodian of the property in question, we must answer the question in the affirmative. There is nothing on the face of Indiana's adoption of the 1983 Uniform Transfers to Minors Act which prohibits such a transaction. Given the unfavorable treatment of such arrangements by the Internal revenue Service, however, a more definitive statement cannot be made on the basis of the facts presented. Such arrangements, however, are not per se invalid.

Donna M. W~
Chief Counsel, Region V

By---------------
Duane N. B~
Assistant Regional Counsel

D. PS 04-255 Uniform Transfers To Minors Act (UTMA) Transmittal

DATE: November 5, 1996

1. SYLLABUS

This opinion addresses the Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA); specifically at what age custodial property must be turned over to a minor. This opinion affects the States in the Chicago region. The policy varies from State to State.

2. OPINION

This is with reference to your Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA) regional transmittal. In our July 3, 1996 opinion, we provided advice regarding the correct age at which custodial property must be turned over to a minor under Wisconsin's UTMA provisions. Wis. Stat. Ann. §§ 880.61 to 880.72 (West 1991 & Supp. 1995). Your inquiry asks that we generally review the regional transmittal and specifically review the interpretation of Wisconsin's UTMA provisions as set forth in the transmittal.

Many states, including Wisconsin, substantially revised their versions of the UGMA in order to expand the kinds of property that could be made the subject of a gift under the Act. Of the states discussed in the regional transmittal, only Michigan appears to have retained its UGMA provisions rather than adopt UTMA provisions.

In Wisconsin, for custodianships established after April 8, 1988, minors assume control of assets held on their behalf depending on how the UTMA custodianship was established. Section 880.625 (transfers by gift or exercise of power of appointment) and section 880.63 (transfers by will or trust) custodianships end at age 21. Section 880.635 (other transfers by fiduciaries) and section 880.64 (transfers by obligors) custodianships end at age 18. Wis. Stat. Ann. § 880.705 (West 1991 & Supp. 1995).

The UTMA provisions of Illinois and Minnesota by and large make similar distinctions. In Illinois, for custodianships established after July 1, 1986, section 5 (transfer by gift or exercise of power of appointment) and section 6 (authorized transfers, including by will or trust) custodianships end at age 21. Section 7 (other transfers by fiduciaries) and section 8 (transfers by other obligors) custodianships end at age 18. 760 Ill. Comp. Stat. Ann. 20/21 (West 1992 & Supp. 1996); 755 Ill. Comp. Stat. Ann. 5/11-1 (West 1992 & Supp. 1996).

Minnesota provides that for custodianships established before January 1, 1986, minors assume control of assets at age 18. Minn. Stat. Ann. § 527.04(4) (West 1975); Minn. Stat. Ann. § 527.42(b) (West Supp. 1996). But, for custodianships established on or after January 1, 1986, section 527.24 (transfers by gift or exercise of power of appointment) and section 527.25 (transfers authorized by will or trust) custodianships end at age 21. Section 527.26 (other transfers by fiduciaries and conservators) and section 527.27 (transfers by obligors) custodianships end at age 18. Minn. Stat. Ann. § 527.40 (West 1975 & Supp. 1996).

In Indiana, for custodianships established after July 1, 1989,minors assume control of assets at age 21. Ind. Code Ann. § 30-2-8.5-35 (West 1994 & Supp. 1996). Ohio provides that, for custodianships established on or after May 7, 1986, custodial property is to be delivered or paid over to the minor at age 21, unless the donor or transferor, in a written instrument, provided that the custodian was to deliver or pay over the property to the minor at a different age between 18 and 21. Ohio Rev. Code Ann. § 1339.34(D)(1), (2) (Anderson 1993 & Supp. 1995).*/

Michigan, which has not adopted UTMA provisions, has UGMA provisions, which provide that custodial property is to be delivered or paid over to a minor at age 18. Mich. Comp. Laws Ann. § 554.454(4) (West 1988 & Supp. 1996).

Thomas W. C~
Chief Counsel, Region V

E. PS 00-371 SSI-Indiana-Sonya L. G~, Review of Restricted Account, ~; Your File No. S2D5G3

DATE: May 4, 2000

1. SYLLABUS

Under Indiana law, funds in a blocked account are assumed to be available for a minor's support and maintenance. Thus, they are a resource for SSI purposes.

2. OPINION

You asked whether the funds held in a restricted account should be treated as a countable resource for the purpose of determining Sonya L. G~'s SSI eligibility. We have reviewed the account documents as well as the arguments offered by claimant's attorney in his June 22, 1999, letter. For the following reasons, we conclude that the funds held in the restricted account should be presumed to be a countable resource.

FACTS

In April 1990, Georgia C~ settled a personal injury lawsuit on behalf of Sonya L. G~, a minor. Ms. C~ is the court-appointed guardian for Sonya's estate. Sonya's proceeds from the lawsuit ($17,500) were deposited in a certificate of deposit in the name of Ms. C~ as guardian for Sonya. The deposit agreement states "NO WITHDRAWALS EXCEPT BY COURT ORDER."

The court order authorizing the settlement does not mention the restricted account. Other than requiring a court order, neither the court documents nor the deposit certificate reflect additional restrictions on the withdrawal of funds.

DISCUSSION

For SSI purposes, a resource includes cash or other liquid assets, or any real or personal property that an individual owns and could convert to cash to be used for her support and maintenance. 20 C.F.R. § 416.1201(a). Here, Sonya has funds in a bank account, but withdrawals are allowed only with a written court order. The POMS refers to this arrangement as a "conservatorship account" or a "blocked account." See POMS SI 01140.215(A)(1), (A)(3); see also Blocked Accounts as SSI Resources OGC-V (Lowes) to Washington (8/3/89). Generally, we assume funds in a blocked account to be a resource if state law would require that the funds be made available for the individual's care and maintenance. POMS SI 01140.214(B)(1). This is true even where the individual must petition a court to withdraw funds. Id.

In Indiana, the guardian of a minor "has all of the responsibilities and authority of a parent." I.C. 29-3-8-1(a). In addition, where parental income and property are insufficient to support a minor, the guardian "shall apply the guardianship income and, to the extent the guardianship income is insufficient, the principal of the guardianship property to the minor's current needs for support . . ." I.C. 29-3-8-1(a)(3). Since the guardian of a minor is responsible for the minor's support, and is required to spend the minor's funds for his support where parental support is unavailable, we presume (absent evidence to the contrary) that funds held in a blocked account will be available for the minor's support and maintenance. Thus, funds held in an Indiana blocked account are generally considered a resource for SSI purposes. See POMS SI 01140.215(B)(1). This assumption applies, absent evidence to the contrary. Id.

Sonya's attorney, contends that the funds in the account should not be considered a countable resource. He first claims that the funds are not accessible because only the guardian (not Sonya) can petition the court to withdraw funds. This restriction does not preclude the funds from being counted as a resource. The guardian is an agent authorized (and required under state law) to act on Sonya's behalf. We consider that an individual has free access to a resource, even if that access is only possible through an agent. See POMS SI 01120.010(C)(1).

The attorney also argues that, pursuant to the provisions of I.C. 29-3-8-1(a)(3), the court would permit withdrawals from the blocked account only if "the available parental income and property are insufficient to fulfill the parental obligation of support to the minor." Thus, he concludes the court would not permit the withdrawal of funds for Sonya's support and maintenance. Here, however, they have not asked the court to release the funds.

We disagree with the attorney's interpretation of I.C. 29-3-8-1(a)(3), which states:

[t]o the extent the available parental income and property are insufficient to fulfill the parental obligation of support to the minor, [the guardian] shall apply the guardianship income and, to the extent the guardianship income is insufficient, the principal of the guardianship property to the minor's current needs for support, and protect and conserve that portion of the minor's property that is in excess of the minor's current needs . . .

I.C. 29-3-8-1(a)(3).

From the introductory clause ("to the extent the available parental income and property are insufficient"), the attorney assumes that the guardian is prohibited from using the minor's own funds for her support if parental support is available. However, the statutory language itself does not suggest such a prohibition, nor should it be interpreted as such.

The above language is found in a section of the statute that enumerates the responsibilities of a guardian, I.C. 29-3-8-1. Subsection (a)(3) merely describes a circumstance where a guardian is required to act in a certain way: where parental property is insufficient to support the minor, the guardian is required to use the minor's own funds for her current support needs.

This interpretation is reinforced by other sections of I.C. 29-3-8, which specifically grant the guardian of a minor power to use the minor's own funds for the minor's support.

Pursuant to I.C. 29-3-8-2, the guardian of a minor "may exercise all of the powers required to perform the guardian's responsibilities," including specific powers with respect to managing guardianship property. I.C. 29-3-8-2(8). Among the specific powers enumerated, a guardian has the power to pay to the person or entity having custody of the minor "a reasonable amount" for the minor's support. I.C. 29-3-8-4(6). In determining a reasonable amount, I.C. 29-3-8-4(6)(C) provides that "due regard" be given to whether other funds are available for the minor's support, among other factors. In addition, a guardian also has the power to distribute guardianship property "as the guardian believes to be in the best interest of the [minor]." I.C. 29-3-8-4(7). This includes the power to make payments to a guardian, custodian, or adult relative of the minor and to expend money directly for the minor's benefit. Id.

These provisions suggest that a guardian has broad power to expend guardianship property in the minor's best interest, limited only by the responsibility to conserve guardianship property that exceeds the minor's current needs. I.C. 29-3-8-1(a)(3), 29-3-8-3(3). A guardian is specifically authorized to pay a reasonable amount from the minor's own funds for the minor's support, giving only "due regard" to other available support. Yet, the attorney contends that, where parental support is available, I.C. 29-3-8-1(a)(3) prohibits expenditure of the minor's own funds for the minor's support. This contention conflicts with the provisions described above, which expressly authorize such expenditures. Had the legislature intended an absolute prohibition on the use of guardianship property for the minor's support in certain circumstances, we think the powers of the guardian would have been so limited.

Therefore, we assume that funds are available for Sonya's support and maintenance, absence evidence to the contrary. Based on the facts available to us, there is no such contrary evidence. The court order authorizing the personal injury claim settlement does not mandate that the settlement proceeds be placed in a restricted account, and it does not preclude their use for support or maintenance. We presume the funds were placed in a restricted account pursuant to Marian County Probate Rules (Sonya's personal injury claim was settled in Marian County). Other than requiring a court order, the Probate Rules, court documents and deposit certificate do not reflect additional restrictions on the withdrawal of funds. Thus, currently no evidence contradicts the assumption that the funds in the blocked account would be available for Sonya's care and maintenance. POMS SI 01140.215(B)(2).

The field office may wish to inquire about whether Ms. C~ has ever petitioned the court to withdraw funds, and under what circumstances the petitions were granted or denied. We recommend the field office follow the POMS guidelines in this regard. See POMS SI 01140.215(B)(3), POMS SI 01140.215(C); see also White v. Apfel, 167 F.3d 369 (7th Cir. 1999) (presumption that funds in blocked account were available was successfully rebutted by probate court's denial of petition for release of funds).

CONCLUSION

Sonya has funds in a "blocked" account, since withdrawals are allowed only with a written court order. Indiana law does not appear to prohibit withdrawals for Sonya's care and maintenance. Rather, Indiana law would require that the funds be made available for Sonya's care and maintenance. Therefore, we assume the funds in a blocked account are a resource absent evidence to the contrary. Given the information available, there is no such contrary evidence. Thus, the funds in the blocked account should be considered a resource for SSI purposes. POMS SI 01140.215.


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http://policy.ssa.gov/poms.nsf/lnx/1601805017
PS 01805.017 - Indiana - 04/16/2008
Batch run: 01/27/2009
Rev:04/16/2008