You asked whether a Supplemental Security Income (SSI) applicant’s trust is irrevocable
for SSI purposes. You also asked whether a Florida state court order binds the Social
Security Administration (SSA), where the order purportedly modified the trust and
operated nunc pro tunc, that is, effective as of the date the trust was created.
SSA found Joan (Applicant) entitled to SSI beginning in May 1986. In December 2007,
SSA notified Applicant it was stopping her payments because it needed correct information
about her name, address, and/or bank account.
Applicant’s father, James (Grantor), a resident of B~ County, Florida, executed his
Last Will and Testament (Will) in January 1991. In his Will, Grantor devised one share
of his estate to a trust for the benefit of Applicant (Will, Art. 2 ¶ E). Grantor
designated Richard (Grantor’s son and Applicant’s brother) as the trustee. Grantor
also directed the trustee to use the income and principal of the trust for Applicant’s
“support and maintenance” (Will, Art. 2 ¶ E(1)). The Will did not expressly prohibit
judicial modification (Order Granting Verified Petition to Reform Irrevocable Testamentary
Trust (Order), ¶ K).
Grantor died in October 2004 (Order, ¶ A). Richard, as trustee, subsequently petitioned
the Circuit Court for Broward County, Florida, to reform the trust (Order, Preamble).
In support of his petition, Richard stated Applicant had been diagnosed with schizophrenia
(Order, ¶ D). Richard also said Applicant received government assistance in the past,
including SSI and Medicaid benefits; however, she was not receiving any government
assistance at the time of the petition and would not qualify for government assistance
if the trust remained as drafted (Order, ¶¶ E-F). Richard also submitted an affidavit
from the drafter of the Will, who stated he was unaware that Applicant was disabled
and had been receiving government assistance (Order, ¶ H). According to the drafter,
if he had been aware of these facts, he would have recommended a special needs trust
and drafted the Will to avoid interference with Applicant’s continued eligibility
for government assistance (Order, ¶ H). Richard proposed to reform the trust as a
“special needs trust” that would “[m]aintain the intention of the Grantor as to the
disposition of the remaining trust assets.” (Order, ¶ I).
In an order dated May 18, 2011, the court found Richard, as trustee, was entitled
to judicial modification of the trust under Florida law (Order, ¶ 1). The court replaced
the provisions of Article 2, paragraph E, of the Will regarding the distributions
of Applicant’s trust share with the modifications Richard had proposed in his petition
(Reformed Trust, Preamble). The court modified the trust nunc pro tunc “as of [Grantor’s]
date of death in October 2004” (Order, ¶ 3).
As modified by the court, the Will established a trust “to supplement [Applicant’s]
needs only” (Reformed Trust, ¶ A). The modified trust is “not intended for [Applicant’s]
primary support” (Reformed Trust, ¶ A). According to the terms of the trust, Applicant
“has no entitlement to the income or corpus of this trust, except as my Trustee, in
his complete, sole, absolute and unfettered discretion elects to disburse” (Reformed
Trust, ¶ B). The trust also directs that “under no circumstances may [Applicant] compel
distributions from this trust” (Reformed Trust, ¶ E). Additionally, “[d]istribution
to or for the benefit of [Applicant] shall be limited so that [she] is not disqualified
from receiving public benefits to which [she] is otherwise entitled” (Reformed Trust,
¶ D). Section L of the trust, titled “Trustee’s Authority to Terminate Trust,” provides
that upon the death of Applicant or the trust’s earlier termination, the trust “shall
be distributed in equal shares to [several remainder beneficiaries]” (Reformed Trust,
¶ L). The terms of the trust provide that it will be administered under Florida law
(Reformed Trust, ¶ N).
Applicant’s brother and legal guardian, Jameson, applied on Applicant’s behalf for
SSI on July 22, 2011. In the application, Jameson stated Applicant’s resources included
a checking account containing $44,972.15. Jameson described this account as a “special
needs trust account.” SSA denied Applicant’s application on July 29, 2011, because
her resources were worth more than $2,000.00. On September 14, 2011, Applicant requested
SSI is a general public assistance program for aged, blind, or disabled individuals
who meet certain eligibility requirements, including income and resource restrictions.
See Act §§ 1602, 1611(a); 20 C.F.R. §§ 416.110, 416.202 (2011).  “Resources” include cash, 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. See Act § 1613; 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).
Trusts may be countable as an individual’s resource for SSI purposes. See Act, § 1613(e). Even if a trust is established with the assets only of a third-party,
the trust will be countable as an individual’s resource if he or she “has legal authority
to revoke or terminate the trust and then use the funds to meet his food or shelter
needs, or if the individual can direct the use of the trust principal for his/her
support and maintenance under the terms of the trust.” Program Operations Manual System
(POMS) SI 01120.200.D.1.a.  “Additionally, if the individual can sell his or her beneficial interest in the trust,
that interest is a resource.” Id.
Conversely, “[i]f an individual does not have the legal authority to revoke or terminate
the trust or to direct the use of the trust assets for his/her own support and maintenance,
the trust principal is not the individual’s resource for SSI purposes.”  See POMS SI 01120.200.D.2 (emphasis in the original). Generally, one determining whether a beneficiary
can revoke, terminate, or direct the use of a trust should not impute to the beneficiary
a trustee’s discretion to use or direct the use of the trust. See POMS SI 01120.200.D.1.b (“While a trustee may have discretion to use the trust principal for the benefit
of the beneficiary, the trustee should be considered a third party and not an agent
of the beneficiary, i.e., the actions of the trustee are not the actions of the beneficiary,
unless the trust specifically states otherwise.”). “If a trust is irrevocable by its
terms and under State law and cannot be used by an individual for support and maintenance
. . . it is not a resource.” Id. (emphasis in the original).
You asked whether the trust is an irrevocable trust for the purposes of SSI. To answer
this question, we first address whether Florida law permitted the court to modify
the trust in 2011. Then, we address whether Applicant can revoke the modified trust.
The governing law section of Florida’s Trust Code states in pertinent part: The meaning
and effect of the terms of a trust are determined by: (1) The 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) In the absence of a controlling designation in the terms
of the trust, the law of the jurisdiction where the settlor resides at the time the
trust is first created. Fla. Stat. Ann. § 736.0107 (West 2011);  see also Fla. Stat. Ann. § 736.0202 (stating Florida courts have jurisdiction over trustees
and beneficiaries of a trust having its principal place of administration in Florida).
Grantor resided in Florida when he executed the Will that contained the original terms
of the trust (Will, Preamble). Applicant, the beneficiary of the trust, resides in
Florida (Order, ¶ D), thereby creating a sufficient nexus to Florida. Therefore, we
look to Florida law to determine whether the circuit court had the authority to modify
the trust and whether the trust as modified by the court, is revocable.
The court found the trustee was entitled to judicial modification of the trust under
Florida Statute §§ 736.04113 or 736.04115 (Order, ¶ 1). These sections permit a court
to modify a trust created by a deceased settlor when it meets certain conditions.
See Fla. Stat. Ann. §§ 736.0103(15)-(16), 736.04113(1), 736.04115(1), 736.0601; Robinson
v. Robinson, 805 So. 2d 94, 95 (Fla. Dist. Ct. App. 2002).
Under Florida Statute § 736.04113, a court may modify the terms of a trust created
by a deceased settlor upon the application of a trustee or any qualified beneficiary
where, “[b]ecause of circumstances not anticipated by the settler, compliance with
the terms of the trust would defeat or substantially impair accomplishing the material
purpose of the trust.” See Fla. Stat. Ann. § 736.04113(1)(b). A court modifying a trust under this section must
consider the terms and purposes of the trust, the facts and circumstances surrounding
the creation of the trust, and any extrinsic evidence relevant to the proposed modification.
See Fla. Stat. Ann. § 736.04113(3)(a).
We believe the court properly complied with Fla. Stat. Ann. § 736.04113 in granting
Richard’s petition to modify the trust. Richard was the trustee, and the court modified
the trust upon his petition (Order, Preamble) because compliance with the terms of
the trust would defeat or substantially impair accomplishing the material purpose
of the trust (Order, ¶ 1).
The material purpose of the trust “generally requires some showing of a particular
concern or objective on the part of the settlor, such as concern with regard to a
beneficiary’s management skills, judgment, or level of maturity.” Restatement (Third)
of Trusts, § 35 (2003). “Sometimes . . . the very nature or design of a trust suggests
its protective nature . . . .” Id. The Will directed the trustee to use the trust “for the support and maintenance of
[Applicant] . . . taking into consideration her standard of living at the time of
my death and any other sources of income of [Applicant]” (Will, Art. 2 ¶ E). See Fla. Stat. Ann. § 736.0404 (“A trust and its terms must be for the benefit of its
beneficiaries.”). Applicant has been diagnosed with schizophrenia (Order, ¶ D). Given
the terms of the trust and Applicant’s schizophrenia, we believe the court could properly
find the trust’s material purpose was to protect and maximize Applicant’s means of
support, including her eligibility for government assistance.
The available information does not indicate Grantor anticipated the trust would affect
Applicant’s eligibility for SSI. Richard submitted an affidavit from the drafter of
the Will showing he had been unaware that Applicant received government assistance
and, if he had been aware, he would have drafted the Will to avoid jeopardizing Applicant’s
continued eligibility for government assistance (Order, ¶ H).
We believe the court could reasonably have found that compliance with the original
terms of this trust would defeat or substantially impair the material purpose of the
trust. Richard stated Applicant used to receive government assistance, including SSI
and Medicaid benefits; however, she was not receiving any government assistance at
the time of the petition and would not qualify for government assistance if the trust
remained as it was drafted (Order, ¶¶ E-F). Therefore, the court could find that compliance
with the original trust would diminish Applicant’s means of support, substantially
impairing the material purpose of the trust. We believe the court properly elected
to modify the terms of the trust under Florida Statute § 736.04113.
Because we believe the court could properly modify the trust under Florida Statute
§ 736.04113, we believe its ability to modify the trust under Florida Statute § 736.04115
is immaterial. Nevertheless, we believe the court could modify the trust also under
Florida Statute § 736.04115.  A court may modify a trust under this section “if compliance with the terms of a
trust is not in the best interests of the beneficiaries.” Fla. Stat. Ann. § 736.04115(1).
We believe the court could properly determine that compliance with the terms of the
trust was not in Applicant’s best interests because it would jeopardize her eligibility
for government assistance (Order, ¶ F). Therefore, we believe the court could properly
modify the trust under this section.
We also believe the modified trust is irrevocable with respect to Applicant. “The
revocability of a trust and the ability to direct the use of the trust principal depend
on the terms of the trust agreement and/or on State law.” POMS SI 01120.200.D.2. “[A] valid trust cannot be altered, amended, or revoked except by the exercise
of a power identified in the trust.” Roberts v. Sarros, 920 So. 2d 193, 195 (Fla. Dist. Ct. App. 2006) (quoting L’Argent v. Barnett
Bank, 730 So. 2d 395, 397 (Fla. Dist. Ct. App. 1999)). In determining whether the trust
identifies a power to alter, amend, or revoke the trust, “[t]he polestar of trust
. . . interpretation is the settlor’s intent.” Bryan v.
Dethlefs, 959 So. 2d 314, 317 (Fla. Dist. Ct. App 2007); accord Fla. Stat. Ann. § 736.1101(1)
(“The intent of the settlor as expressed in the terms of the trust controls the legal
effect of the dispositions made in the trust.”). “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.” R~, 920 So. 2d at 195 (internal quotation marks omitted); see Littell v. Law Firm of Trinkle, Moody, Swanson, Byrd
& Colton, 345 F. App’x 415, 419 (11th Cir. 2009); B~, 959 So. 2d at 317; L~, 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.”
 L~, 345 F. App’x at 419; see B~, 959 So. 2d at 317 n.2; L~, 730 So. 2d at 397. If a provision of a trust is unenforceable,
a court may sever the unenforceable provision and preserve the trust as a whole, provided
the severance is compatible with the settler’s intent. See McLemore v.
McLemore, 675 So. 2d 202, 205 (Fla. Dist. Ct. App. 1996).
We believe that the terms of the modified trust, when construed as a whole, show that
Applicant could not revoke it. See R~, 920 So. 2d at 195. First, the trust does not appear to grant Applicant any power
to amend, modify, or revoke the trust. See id. (“‘[A] valid trust cannot be altered, amended, or revoked except by the exercise
of a power identified in the trust.’” (quoting L~, 730 So. 2d at 397)). Rather, the
trust states that Applicant, as beneficiary of the trust, “has no entitlement to the
income or corpus of this trust, except as my Trustee in his complete, sole, absolute
and unfettered discretion elects to disburse” (Reformed Trust, ¶ B). In this regard,
the trust permits the trustee to “act unreasonably and arbitrarily as [Grantor] could
do [him]self if living and in control of these funds” (Reformed Trust, ¶ B). One should
not impute to Applicant the trustee’s ability to use or direct the use of the trust
because the trustee, Richard, is not Applicant’s agent. See POMS SI 01120.200.D.1.
The trust also contains a spendthrift provision that states “under no circumstances
may [Applicant] compel distributions from this trust” (Reformed Trust, ¶ E). Further,
the modified trust does not direct any mandatory periodic payments and states Applicant
has no right to direct the distribution of any part of the Trust (Reformed Trust,
¶¶ B, E). See POMS SI 01120.200.D, E.1. Nothing in the modified trust grants Applicant the ability to control her
trust share, revoke her trust share, or sell her income from her trust share (Reformed
Trust). See Fla. Stat. Ann. § 736.0103(15); L~, 730 So. 2d at 397; Fla. Nat’l Bank of Palm Beach Cty. v. Genova, 460 So. 2d 895, 897 (Fla. 1984).
Because the trust instrument after the 2011 modification confirms Grantor’s intent
to make the trust irrevocable by Applicant, we believe the modified trust is irrevocable
with respect to Applicant. See L~, 345 F. App’x at 419; B~, 959 So. 2d at 317 n.2; R~, 920 So. 2d at 195; L~, 730 So.
2d at 397.
Although the modified trust is irrevocable, the court’s order that modified the trust
did not have a retroactive effect. The court stated the modified trust was effective
nunc pro tunc, meaning the court intended to modify the trust effective from the date
of Grantor’s death, October XX, 2004 (Order, ¶ 3). Although we believe the court's
order modified the trust as of the date of the court order, we do not believe the
court had the authority under Florida law to issue an order modifying the trust effective
as of the date the trust was originally created.
Nunc pro tunc is a Latin term meaning “now for then.” Becker v.
King, 307 So. 2d 855, 859 (Fla. Dist. Ct. App. 1975). “When applied to the entry of a
legal order, nunc [pro tunc] normally refers, not to a new . . . decision, but to
the trial judge’s previous action of which there is not a sufficient record.” Whack v. Seminole Memorial Hosp., 456 So. 2d 561, 563-64 (Fla. Dist. Ct. App. 1984). For example, an order may be
entered nunc pro tunc to correct clerical errors. See Wells v. State, 796 So. 2d 1276, 1277 (Fla. Dist. Ct. App. 2001) (permitting a nunc pro tunc order
to add “Jr.” to a name recorded on an earlier judgment). “A nunc pro tunc order is
also used to supply an omission in the record of an action previously done but omitted
through inadvertence or mistake.” Luhrs v. State, 394 So. 2d 137, 138 (Fla. Dist. Ct. App. 1981). In such a case, “[t]he later [nunc
pro tunc] record-making act constitutes but later evidence of the earlier effectual
act.” Briseno v.
Perry, 417 So. 2d 813, 814 (Fla. Dist. Ct. App. 1982).
Thus, “[a] nunc pro tunc order can relate back only to supply a record of something
actually done or determined at the earlier time.” Wally v. Fla.
Game & Fresh Water Fish Comm’n, 501 So. 2d 671, 673 (Fla. Dist. Ct. App. 1987) (citing Riha v. Harding, 369 So. 2d 404 (Fla. Dist. Ct. App. 1979)). “[W]here the court has wholly omitted
an order, which it might or ought to have made, it cannot afterward be entered nunc
pro tunc.” Nichols v.
Walton, 90 So. 157, 386 (Fla. 1921). Accordingly, “where an order does not merely correct
clerical errors or omissions, but actually modifies the substance of a prior ruling
or of itself constitutes a ruling not previously made in fact, it should not be given
retrospective effect.” De Baun v. Michael, 333 So. 2d 106, 108 (Fla. Dist. Ct. App. 1976).
In this case, we do not believe the court had the authority to enter its order nunc
pro tunc. The court did not issue its order to correct a clerical error. See W~, 796 So. 2d at 1277. The court also did not issue its order to “supply a record of
something actually done or determined.” W~, 501 So. 2d at 673. Rather, the court attempted to retroactively structure the trust
so that compliance with it would be in Applicant’s best interests or as the drafter
“would have drafted the trust,” if he had been aware of Applicant’s government assistance
(Order, ¶ H). The drafter’s affidavit that he would have drafted the trust differently
further shows that the court’s modification of the trust was not “suppl[ing] a record
of something actually done or determined.” W~, 501 So. 2d at 673. Moreover, the information provided does not show any previously
entered judgments regarding the Will, further suggesting that the court’s order “itself
constitutes a ruling not previously made in fact.” D~, 333 So. 2d at 108. Therefore,
the court could not enter the order nunc pro tunc, and SSA should not give the order
retroactive effect. See
We also believe the relevant sections of the Florida Trust Code do not permit the
court to modify the trust retroactively. The court determined Richard, as trustee,
was entitled to “judicial modification of a trust under Florida Statute 736.04113
or 736.04115.” Unlike other sections of the Florida Trust Code, the sections cited
by the court do not contain any provisions authorizing it to modify the trust retroactively.
Compare Fla. Stat. Ann. §§ 736.04113(2), 736.04113(5), with Fla. Stat. Ann. § 736.0416
(permitting court modifying trust to achieve settlor’s tax objectives to give the
modification “retroactive effect”).
The trust is a third-party irrevocable trust since its modification in May 2011. Additionally,
we believe the State court did not have the authority under Florida law to enter its
order nunc pro tunc. Therefore, SSA is not bound by the court's order to the extent
the order attempted to modify the trust retroactively, and SSA should consider the
trust modified only as of the date the court entered its order, May 18, 2011.