TN 14 (04-18)

PS 01810.020 Kentucky

A. PS 17-119 State Law Survey of Conservatorship/Blocked Accounts in Atlanta Region

Date: July 20, 2018

1. Syllabus

The Regional Chief Counsel (RCC) opinion provides a comprehensive list of State laws, in the Atlanta Region, on the ability of individuals to access funds in conservatorship/blocked accounts for the purpose of support and maintenance for Supplemental Security Income (SSI) claimants and recipients.

2. Opinion

QUESTION

You asked for a comprehensive list of state laws in the Atlanta Region on the ability of individuals to access funds in conservatorship/blocked accounts for the purpose of support and maintenance for Supplemental Security Income (SSI) claimants and recipients.

DISCUSSION

Introduction

A “conservatorship account” (sometimes referred to as a “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 (i.e., a claimant, recipient, or other person whose resources are deemable to the claimant or recipient) that are held in the account. See Program Operations Manual System (POMS) SI 01140.215A.1, A.2. The Social Security Administration (SSA) assumes, absent evidence to the contrary, that funds in a conservatorship account are available for the individual’s support and maintenance (and are, therefore, that individual’s resource) if state law requires that funds in a conservatorship account be made available for the care and maintenance of an individual. See POMS SI 01140.215B.1. However, state law may not specifically address the issue, or state law may specifically prohibit the use of funds held in a conservatorship account for the individual’s general support in certain circumstances. See id.

Thus, SSA needs regional instructions regarding any presumptions about conservatorship accounts for each state. We note that in the states in the Atlanta Region, not all states have laws that specifically discuss conservatorship accounts. However, each state does allow for the appointment of persons similar to conservators and the creation of financial accounts similar to conservatorship accounts.

Alabama

Under Alabama law, a court may appoint a conservator for the estate and affairs of a minor or a person unable to manage property and business affairs effectively if the court determines that the minor or person has funds or property that requires management or protection and the funds are needed for health, support, education, or maintenance and that protection is necessary or desirable to obtain or provide funds. See Ala. Code § 26-2A-130 (2017). The appointment of a conservator vests in the conservator title as trustee of the property of the protected person, and the protected person generally cannot transfer or assign his or her interest in the property vested in a conservator. See Ala. Code § 26-2A-148 (2017). A conservator is given numerous powers over the property of a protected person, including the power to distribute the property of the protected person. See Ala. Code §§ 26-2A-152, 26-2A-153 (2017). In particular, “[a] conservator may expend or distribute income or principal of the estate without court authorization or confirmation for the health, support, education, or maintenance of the protected person and dependents.” Ala. Code § 26-2A-153(a). In addition, a conservator must expend or distribute sums reasonably necessary depending on the specific circumstances of the protected person, including the protected person’s accustomed standard of living. See Ala. Code § 26-2A-153(a)(2).

Thus, under Alabama law SSA may assume that funds in the conservatorship can be made available for the support and maintenance of the SSI claimant or recipient.

Florida

Although Florida has a chapter under its domestic relations law titled “Conservatorship,” the chapter is limited to conservatorships for persons who are absentees. See Fla. Stat. Ann. §§ 747.01 - .052 (West 2017). “Absentee” includes persons serving in the Armed Forces of the United States or similar entities during a time of hostilities who are reported as missing in action or who disappears under circumstances indicating her or she may have died. See Fla. Stat. Ann. § 747.01. Because “absentee” does not include persons who might be eligible for SSI, Florida’s formal conservatorship law is not applicable here. However, Florida guardianship law appears to address the circumstances under which a party may have control of the funds or assets of a person who is not an “absentee.” See Fla. Stat. Ann. §§ 744.101 - .653 (West 2017).

Under Florida guardianship law, a guardian of an incapacitated person is a fiduciary and may exercise only those rights that have been removed from the ward and delegated to the guardian; the guardian shall act within the scope of the authority granted by the court and as provided by law. Fla. Stat. Ann. § 744.361(1), (2). A guardian, if authorized by the court, shall take possession of all of the ward’s property and rents, income, issues, profits from it and the proceeds of any sale, lease, or mortgage of the property. See Fla. Stat. Ann. § 744.361(12) (West 2017). The guardian may use the ward’s assets and income from the property for care, support, maintenance, and education of the ward or the ward’s dependents, as provided under terms of guardianship plan or by law or as authorized by the court. See Fla. Stat. Ann. §§ 744.361(12), 744.397(1); see also Fla. Stat Ann. § 744.444 (without obtaining court approval, a plenary guardian of the property or a limited guardian of the property within the powers granted by the order appointing the guardian or an approved annual/amended guardianship report may pay reasonable living expenses for the ward (but no authorization to pay funds for living expenses of minor ward if one or both parents are alive)).

Thus, before assuming the funds are available for support and maintenance of the SSI claimant or recipient, SSA should review the court order/initial plan to determine the scope of authority granted by the court.

Georgia

Under Georgia law, a conservator shall receive, collect, and make decisions about the property of a minor or ward except as otherwise provided by law or by the court and must “[p]rovide for the support, care, education, health, and welfare of the [minor or ward].” Ga. Code Ann. §§ 29-3-21(a), (b)(5), 29-5-22(a), (b)(5) (West 2017). In addition, a minor or ward for whom a conservatorship is created has the right to have his or her property “utilized as necessary to provide adequately for the [minor’s or ward’s] support, care, education, health, and welfare.” Ga. Code Ann. §§ 29-3-20(a)(3), 29-5-20(a)(3) (West 2017). A conservator may use any income from the property/funds within the conservatorship for the support, care, education, health, and welfare of the minor or ward. See Ga. Code Ann. §§ 29-3-22(a)(1), 29-3-30(c), 29-5-23(a)(1), 29-5-30(c) (West 2017). However, the conservator must have approval from the court of a budget for expending funds/resources in excess of the income from the property. See Ga. Code Ann. §§ 29-3-22(a)(1), 29-5-23(a)(1).

Thus, under Georgia law, SSA may assume that the funds in the conservatorship can be made available for the support and maintenance of the SSI claimant or recipient. However, SSA should obtain the court order granting the conservatorship to check for any restrictions on the disbursement of the assets of the minor or ward.

Kentucky

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 2017). Similarly, any interested person or an individual needing conservatorship may petition the district court for the appointment of a limited conservator or conservator. See Ky. Rev. Stat. Ann. § 387.530(1) (West 2017). A guardian must expend or distribute income or principal of the ward’s estate for the support, care, and education of the ward, but the district court may limit or restrict the guardian’s exercise of this power. See Ky. Rev. Stat. Ann. § 387.065(4) (West 2017). In addition, a guardian cannot provide for the support, care, or education of a ward if a parent is legally obligated and financially able to provide support, care, and education. See Ky. Rev. Stat. Ann. § 387.065(6). A conservator must generally use the income and principal of the account for the support, care, and education of the minor. A conservator generally does not require court authorization to use funds for these purposes, but a court may require the court’s order before the conservator withdraws funds and a court may restrict access to the account’s funds. Ky. Rev. Stat. Ann. §§ 387.065(4)-(6), 387.122, 387.125(1), 387.137.

Thus, in Kentucky, SSA may assume that the funds in a conservatorship account can be made available for the support and maintenance of the SSI claimant or recipient. However, SSA should obtain the court order granting the conservatorship to check for any restrictions on the disbursement of the assets of the minor or ward.

Mississippi

Under Mississippi law, a court “may appoint a conservator to have charge and management of the property of” a person who “is incapable of managing his own estate by reason of advanced age, physical incapacity or mental weakness.” Miss. Code Ann. § 93-13-251 (West 2017). A “conservator shall have the same duties, powers and responsibilities as a guardian of a minor, and all laws relative to the guardianship of a minor shall be applicable to a conservator.” Miss. Code Ann. § 93-13-259 (West 2017); see also Miss. Code Ann. § 93-13-261 (West 2017) (stating “the person whose property or person is in the charge of such conservator shall be limited in his or her contractual powers and contractual obligations and conveyance powers to the same extent as a minor”). Applying Mississippi guardianship law, a court may determine the amount of funds that a conservator may expend for the support and maintenance of the person for whom the conservatorship is established. See Miss. Code Ann. § 93-13-35 (West 2017). The court also may authorize the sale of the person’s property if the income from the person’s estate does not cover necessary expenses, and a conservator cannot make any expenditure in excess of the person’s income without a previous court order authorizing such expenditures. See id.; see also Miss. Code Ann. § 93-13-263 (West 2017) (stating “[i]f there be any persons dependent upon the person for whom the conservator has been appointed, the court shall provide for their support and maintenance from the assets of said estate and the conservator shall be directed to make the necessary support and maintenance available from the assets of said estate”). A conservator has the duty “to apply so much of the income, profit or body thereof as may be necessary for the comfortable maintenance and support of the [person for whom the conservatorship is established] after obtaining an order of the court fixing the amount.” Miss. Code Ann. § 93-13-38(2) (West 2017). A conservator empowered to purchase a home for the person for whom the conservatorship is established and pay the person’s debts. See id. However, if the person for whom the conservatorship is established is a minor and had a parent, the court must determine whether the expense of maintaining and educating the minor must be borne by the guardian. See Miss. Code Ann. § 93-13-37 (West 2017).

Thus, in Mississippi, SSA cannot assume the funds in a conservatorship account are available for the support and maintenance of the SSI claimant or recipient. SSA must review the court order establishing the conservatorship and any subsequent court orders concerning the authority of the conservator to use the funds of the SSI claimant or recipient.

North Carolina

Under North Carolina law, the statute lays out the specific powers of a general guardian or guardian of the estate (a legal designation that the agency considers equivalent to a conservator), which includes an appointee, who takes possession of the individual’s estate for the individual’s use to expend estate income for the support, maintenance, and education of the individual’s minor children, spouse, and dependents and who can petition the court for prior approval of expenditures from the estate principle for these purposes. N.C.G.S.A. § 35A-1251(1), (21).

Thus, it may be presumed that funds under conservatorship are to be made available for the maintenance and support of the protected individual.

South Carolina

Currently in South Carolina, a guardian/conservator may expend or distribute sums from the principal of an estate without court authorization or confirmation for the support, education, care, or benefit of the protected person and his dependents in accordance with certain principals. See Code of Laws of S.C. § 62-5-425. Thus, the funds under conservatorship are countable as a resource for the protected individual.

Beginning January 1, 2019, a guardian serving as a fiduciary, is obligated to apply the money for the benefit of the minor/incapacitated person, but the court must explicitly set forth the rights and powers vested in the conservator (if the powers are not entrusted to the conservator, they are retained by the protected individual). See S.C. Statute § 62-5-103(B) (2017 amendment); § 62-5-304(A) (for minors); § 62-5-407(A), (B) (for incapacitated adults)); § 62-5-304(B) (2017 amendment). Subject to rights and powers retained by the ward and except as modified by order of the court, the guardian has the following duties, rights and power: if entitled to custody of his ward, providing for the care, comfort, and maintenance of the ward. See § 62-5-309(A) (2017 amendment); § 62-5-423 (A)(2) (a conservator may expend or distribute sums from the estate without further court authorization for the health, education, maintenance, and support of the protected person and his dependents in accordance with certain principles as outlined in the statute).

Thus, in South Carolina, SSA may currently assume that the funds in a conservatorship account can be made available for the support and maintenance of the SSI claimant or recipient. However, beginning in January 2019, SSA should obtain the court order granting the conservatorship to check for any restrictions on the disbursement of the assets the claimant.

Tennessee

Under Tennessee law, conservatorship “is a proceeding in which a court removes the decision-making powers and duties, in whole or in part, in a least restrictive manner, from a person with a disability who lacks capacity to make decisions in one or more important areas and places responsibility for one or more of those decisions in a conservator or co-conservators.” Tenn. Code Ann. § 34-1-101(4)(B) (West 2017). A conservator is a person or entity “appointed by the court to exercise the decision-making rights and duties of the person with a disability in one or more areas in which the person lacks capacity as determined and required by the orders of the court.” Tenn. Code Ann. § 34-1-101(4)(A); see also Tenn. Code Ann. § 34-1-101(7) (stating that a conservator is a fiduciary). The ability of the conservator to use the funds placed under conservatorship will depend on the specific rights and duties laid out in the letters of conservatorship or court order establishing the conservatorship. See Tenn. Code Ann. §§ 34-1-104(a), 34-1-113(a)-(c), 34-1-122, 34-3-107(a)(2) (West 2017); see also In re Conservatorship of Melton, No. E2014-01384-COA-R3-CV, 2015 WL 4594126, at *4 (Tenn. Ct. App. July 31, 2015) (stating the authority, rights and responsibilities of a conservator are not independent of the court, as a conservator acts as the court’s agent). The Court can grant the conservator the power to pay bills and expenses of the person with a disability, but the specific powers of the conservator will be based on the letters of conservatorship or court order. Tenn. Code Ann. § 34-1-113(a), (b), 34-1-129, 34-3-107(a)(2) (West 2017); see also Tenn. Code Ann. § 34-1-109(b) (West 2017) (stating that “the fiduciary’s faithful performance oath shall include a promise to timely file each required inventory and accounting and to spend the assets of the minor or person with a disability only as approved by the court”); Tenn. Code Ann. § 34-3-108 (West 2017) (allowing for the modification of a conservator’s duties by court order).

Thus, in Tennessee, SSA cannot assume the funds in a conservatorship account are available for the support and maintenance of the SSI claimant or recipient. SSA must review the letters of conservatorship and court order(s) to determine the scope of authority granted to the conservator by the court.

Sincerely,

M~

Regional Chief Counsel

By: K~

Assistant Regional Counsel

B. PS 13-018 Resource Status of a Conservatorship or Blocked Account Established for a Supplemental Security Income Recipient – Kentucky

Date: November 26, 2012

1. Syllabus

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.

2. Opinion

QUESTION

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.

OPINION

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.

BACKGROUND

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.

DISCUSSION

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). 1 "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. 2

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.

CONCLUSION

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,

M~

Regional Chief Counsel

By:____________ _

B~

Assistant Regional Counsel


Footnotes:

[1]

. . All subsequent references to the C.F.R. refer to the 2012 edition unless otherwise specified.

[2]

. . 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.


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/1601810020
PS 01810.020 - Kentucky - 04/18/2018
Batch run: 04/18/2018
Rev:04/18/2018