TN 7 (12-12)
PS 01810.020 Kentucky
A. PS 13-018 Resource Status of a Conservatorship or Blocked Account Established for a Supplemental Security Income Recipient – Kentucky
DATE: November 26, 2012
This opinion reveals the conservator’s role in restricting the use of benefits in this blocked account. The restriction came about at the request of the conservator. The Regional Chief Counsel’s office believes the restriction could be removed by a similar petition. Therefore, this account could be considered a countable resource per SI 01140.215C.4.
For purposes of determining a recipient's resources and continued eligibility for Supplemental Security Income (SSI), you asked whether funds in a conservatorship or blocked account established pursuant to a Kentucky state court order for the recipient must be expended on his support and maintenance under Kentucky law, and whether Kentucky law permits the court to restrict the use of funds from the account for recipient's support and maintenance. After discussing the matter further with you, we understand you also would like to know whether Program Operations Manual System (POMS) SI 01140.215C4 applies in this instance.
Kentucky law generally permits the conservator to use funds from a conservator or blocked account for the support and maintenance of a minor, but Kentucky law permits the courts to restrict the conservator from using the funds for support and maintenance. We also believe that, given the information we have before us, POMS SI 01140.215C4 applies in this case.
Based on the information provided, we understand the facts to be as follows. On May 10, 2005, a Kentucky district court established a "Conservator's account" (Account) for Jonathan (Recipient). Cynthia, the conservator for the Account and Recipient's mother, subsequently moved the district court to establish and clarify that the Account is a "blocked account" as "defined in the applicable [S]ocial [S]ecurity regulations and policies." She also asked the district court to clarify that "no funds from the account may be expended for the care and maintenance of [Recipient] but only for the purpose of providing for his education and extraordinary or catastrophic healthcare needs and only then upon prior order of the Court." On April 23, 2007, the court issued an order establishing that the Account was a "blocked account" and funds from the Account "may only be expended in accordance with the Court's May 10, 2005, order and this order." The Account is maintained by Central Bank, FSB, and the Account remarks, effective April 27, 2007, state "restricted account: no withdrawals allowed without court order."
On May 5, 2007, Recipient's mother applied for SSI on behalf of Recipient. In determining Recipient was eligible for SSI, the agency did not originally count the Account as a resource. However, a claims representative in the Frankfurt, Kentucky field office learned while conducting a redetermination of Recipient's SSI eligibility that withdrawals were made from the Account and Recipient's mother, as conservator of the Account, could petition the court to remove of the restrictions placed on the Account.
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 (2012). "Resources" include cash or other liquid assets or any real or personal property that an individual owns and could convert to cash to use for his or her support and maintenance. See 20 C.F.R. § 416.1201(a). "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); see Program Operations Manual System (POMS) SI 01120.010.B.
Funds held in a financial institution account are an individual's resource if the individual owns the account and can use the funds for his or her support and maintenance. See 20 C.F.R. § 416.1208(a). To determine whether the individual can use the funds for his or her support and maintenance, the agency looks "at how the individual holds the account," which "is reflected in the way the account is titled." Id. A "conservatorship account" or "blocked account" is "a financial account in which a person or institution has been appointed by a court to manage and preserve the assets of an individual which are held in the account." POMS SI 01140.215A. Agency policy states that if state law requires that funds in a blocked account be made available for an individual's care and maintenance, the agency will assume "absent evidence to the contrary" that the funds are available for the individual's support and maintenance and that the account is the individual's resource. POMS SI 01140.215B1. Under Kentucky law, any interested person or entity may petition the district court for appointment of a conservator for a minor who owns property requiring management or protection. See Ky. Rev. Stat. Ann. § 387.025(2) (West 2012). A conservator generally must use the income and principal of the account for the support, care, and education of the minor; while a conservator generally does not require court authorization to use funds for these purposes, a court may require the court's order before the conservator may withdraw funds. See Ky. Rev. Stat. Ann. §§ 387.065(4)-(6), 387.122, 387.125(1), 387.137. Accordingly, the agency may presume that the blocked funds are an available resource absent evidence to the contrary. POMS SI 01140.215B1.
Examples of "evidence to the contrary" include, but are not limited to, restrictive language in the court order that established the account or in a subsequent court order, State or local procedural rules for the withdrawal of funds from the account, and local court practices regarding withdrawal of funds. POMS SI 01140.215B2. In Recipient's case, the restrictive language of the district court's supplemental order provides "evidence to the contrary" precluding the agency from assuming the funds of the Account are available for Recipient's support and maintenance. See POMS SI 01140.215B. Specifically, the court's supplemental order states "no funds from this account may be expended for the care and maintenance of [Recipient]." The supplemental order also states that the Account funds are "only for the purpose of providing for his education and extraordinary or catastrophic healthcare needs." In addition, the court's supplemental order prohibits expenditure of Account funds without prior approval by the court. These restrictions on the use and withdrawal of Account funds are consistent with Kentucky law, which permit the district court to limit or restrict the conservator's power to use the assets of the account for the support, care, and education of the minor. See Ky. Rev. Stat. Ann. §§ 387.065(4), 387.122, 387.137. These restrictions constitute clear "evidence to the contrary," and thus, the district court's language rebuts any assumption that that the funds in the account are available for NH's support and maintenance and count as a resource.
Despite the lack of this presumption, the agency can still determine that the Account is a resource for Recipient. A field office adjudicator should review the history of any petitions to withdraw funds from the account to determine whether the account is a resource for SSI purposes. See POMS SI 01140.215B3. In addition, if the court has restricted the use of account funds at the individual's request or the request of his or her agent and the court can remove the restrictions at the request of the individual or agent, the agency considers the account funds a resource for SSI purposes. See POMS SI 01140.215C4. The information provided states that the court placed the restrictions on the Account at the conservator's request one month before she filed Recipient's application for SSI. If the conservator, in fact, requested the restriction, we have found no Kentucky statute or case law that would preclude the conservator from asking the court to remove the restrictions. Moreover, none of the Kentucky statutes applicable to conservators would prohibit a conservator from requesting the removal of the district court's restriction or forbid the conservator from accessing the funds for NH's support and maintenance once the court removed any restrictions. See Ky. Rev. Stat. Ann. §§ 387.010-.280, 387.289. As discussed above, Kentucky law recognizes the conservator's duty to expend funds for the support, care, and education of a minor, and states only that a court may limit or restrict a conservator's ability to use or withdraw funds from an account. See Ky. Rev. Stat. Ann. §§ 387.065(4), 387.122, 387.137. Accordingly, if the court restricted the Account at the request of Recipient or the conservator, no Kentucky law would preclude the agency from applying POMS SI 01140.215C4 and determining that the Account is a resource for Recipient.
Kentucky law provides that a conservator may use funds from a blocked account for the support and maintenance of the minor, but a district court may restrict access to the account's funds. Thus, the agency cannot assume the Account is a resource for Recipient due to the restrictions the district court placed on the Account. However, if Recipient or his agent requested the court restrictions, no Kentucky law would preclude the agency from applying POMS SI 01140.215C4 and determining the Account is a resource available to Recipient.
Very truly yours,
Mary Ann Sloan
Regional Chief Counsel
Assistant Regional Counsel
All subsequent references to the C.F.R. refer to the 2012 edition unless otherwise specified.
Kentucky law also states a conservator cannot not provide for the support, care, or education of the minor if a parent is legally obligated and financially able to provide support, care, and education. See Ky. Rev. Stat. Ann. § 387.065(6). We do not have sufficient information to determine whether this provision applies to the facts in this matter.