You have asked whether the Social Security Administration (SSA) is bound by a Tennessee
state court order that deleted language in a Supplemental Security Income (SSI) recipient's
trust when the order was entered nunc pro tunc, that is, effective as of the date the trust was created.
We believe the State court did not have the authority under Tennessee 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 amend the trust retroactively, and SSA should consider the trust amended only as
of the date the court entered its order.
SSA found Aimee S. A~ (Recipient) entitled to SSI in 1990. On December 9, 2004, Francis
A. A~ and Sue E. A~ (Recipient's parents) created an "Irrevocable Supplemental Care
Trust" (Trust) for Recipient pursuant to the order and under the authority of the
Chancery Court of Jefferson County, Tennessee. The Trust noted Recipient's parents
were the court-appointed Co-Conservators of the person of Recipient and Co-Trustees
of the Trust. Recipient's parents established the Trust to hold funds payable to Recipient
as the result of the sale of the residence she owned. The Trust noted the amount of
funds Recipient would receive from the sale of the property "would jeopardize the
benefits paid or payable for her support and care . . . ." The Trust indicated the
Trust was an "irrevocable Supplemental Care Trust" section 1917(d)(4)(A) of the Social
Security Act (Act). Article I of the Trust, titled Irrevocability, states that no
court, conservator, trustee, or beneficiary has the right to alter, amend, revoke,
or terminate the trust or any of its provisions except as expressly provided by the
Trust. Article I states that if consistent with the intent of the Trust, the trustees
may ask the court to amend the Trust "so that it conforms to the regulations and policies
that are approved by any governing body or agency relating to Medicaid benefits or
any similar successor programs as well as any other pertinent State or Federal programs."
Article IV of the Trust, titled Trust Distributions, delineates how the trustees may
use the funds in the Trust and how the trustees should dispose of the Trust funds
upon Recipient's death. Before the court amended the Trust, the first sentence of
Paragraph H of Article IV stated that upon Recipient's death "and after payment of
final expenses administrative costs, including funeral or burial expenses, the Trustees
shall satisfy any valid claims for reimbursement of medical assistance benefits paid
on behalf of [Recipient] during her lifetime which the Trust is legally obligated
to satisfy pursuant to [section 1917(d)(4)(A) of the Act] . . . ."
In a subsequent review of Recipient's income and resources, SSA discovered the Trust.
Based on the language in the Trust allowing the payment of funeral or burial expenses
before the reimbursement of medical assistance benefits paid on behalf of Recipient
by the State(s), SSA determined the Trust was not a valid trust under section 1917(d)(4)(A)
of the Act and was a countable resource. Therefore, SSA suspended Recipient's SSI
and assessed an overpayment.
After SSA informed Recipient of the suspension and overpayment, Recipient's parents
filed a motion with the Chancery Court of Jefferson County, Tennessee, "to correct
a scrivener[']s error in the original Trust . . . ." On January 21, 2010, the court
issued an order amending the Trust. The court ordered that the Trust "is amended by
deleting the words 'including any funeral or burial expenses' from the first sentence
of Paragraph H of Article IV of the Trust . . . ." The court found that the amendment
"is consistent with the intent of the Trust and that such language was inserted originally
by error." The court further ordered that "this amendment shall be effective nunc
pro tunc in that it is reflective of the parties' original intent."
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 Act §§ 1602, 1611(a); 20 C.F.R. §§ 416.110, 416.202 (2009). "Resources" include cash
or other liquid assets or any real or personal property that an individual owns and
could convert to cash to be used for his or her support and maintenance. See Act § 1613; 20 C.F.R. § 416.1201(a) (2009). Generally, the corpus of a trust established
with the assets of an individual is considered a resource. See Act § 1613(e)(1)-(3); see also Act § 1613(e)(6)(B) (defining corpus and assets).
However, a trust established pursuant to section 1917(d)(4)(A) of the Act, commonly
referred to as a Special Needs trust, is not a resource. See Act §§ 1613(e)(5), 1917(d)(4)(A); Program Operations Manual System (POMS) SI 01120.203.B.1. A Special Needs trust must:
(1) Contain the assets of a disabled individual under age 65;
(2) Be established for the benefit of the individual by a parent, grandparent, or
legal guardian of the individual, or a court;
(3) Provide that the State(s) will receive all amounts remaining in the trust upon
the death of the individual up to an amount equal to the total medical assistance
paid on behalf of the individual under a State plan.
See Act § 1917(d)(4)(A); POMS SI 01120.203.B.1.a. To satisfy the requirement that the State(s) be reimbursed for any medical
assistance provided to the individual, the trust must list the State(s) as the first
payee, with priority over payment of other debts and administrative expenses except
for certain specific expenses. See POMS SI 01120.203.B.1.h. Allowable administrative expenses that may be paid from the trust prior to
reimbursement of medical assistance provided by the State(s) include taxes due from
the trust and reasonable fees for the administration of the trust estate. See POMS SI 01120.203.B.3.a. However, expenses and payments not permitted prior to reimbursement of medical
assistance provided by the State(s) include funeral expenses. See POMS SI 01120.203.B.3.b.
In this case, the original language of the first sentence of Paragraph H of Article
IV of the Trust provided that upon Recipient's death, the Trust would reimburse "medical
assistance benefits paid on behalf of [Recipient] during her lifetime which the Trust
is legally obligated to satisfy pursuant to" section 1917(d)(4)(A), but only "after
payment of final expenses and administrative costs, including funeral or burial expenses . . . ." (Emphasis added.) As noted above, funeral expenses are not a permissible
expense prior to reimbursement of medical assistance to the State(s). See POMS SI 01120.203.B.3.b. Thus the Trust as originally created did not comply with section 1917(d)(4)(A)
of the Act. See Act § 1917(d)(4)(A); POMS SI 01120.203.B.1.a., B.1.h, B.3.b.
On January 21, 2010, the court issued an order amending the first sentence of Paragraph
H of Article IV of the Trust to delete the phrase "including funeral or burial expenses."
The amendment would appear to render the Trust in compliance with the requirement
that the State(s) receive all amounts remaining in the trust upon Recipient's death
up to an amount equal to the total medical assistance paid by the State(s) on behalf
of Recipient. See Act § 1917(d)(4)(A); POMS SI 01120.203.B.1.a, B.1.h. The court order stated the amendment was effective nunc pro tunc, meaning the court intended to amend the Trust effective from the date the Trust was
created, i.e., December XX, 2004. However, although we believe the court's order effectively
amended the trust as of the date of the court order, we do not believe the court had
the authority under Tennessee law to issue a nunc pro tunc order amending the Trust effective as of the date the Trust was originally created.
Nunc pro tunc is a Latin term meaning "now for then." See Blackburn v. Blackburn, 270 S.W.3d 42, 49 n.13 (Tenn. 2008) (citing Black's Law Dictionary, 964 (5th ed. 1979)). "All courts have the right, and it is their duty, to make their
records speak the truth, and a court, therefore, in a proper case, of its own motion,
may order a nunc pro tunc entry to be made. . . ." Blackburn, 270 S.W.3d at 51 (quoting Rush v. Rush, 37 S.W. 13, 14 (Tenn. 1896) (quotation marks omitted)). In addition, "in a proper
case, a nunc pro tunc order may be used to correct an existing decree, as well as to supply a missing decree."
McCown v. Quillin, 344 S.W.2d 576, 583 (Tenn. Ct. App. 1960). However:
The error justifying a nunc pro tunc entry must have been due to the inadvertence or mistake of the court and not counsel.
Moreover, an entry of a judgment nunc pro tunc should only be granted when it can be shown by clear and convincing evidence that
the judgment sought is the one previously announced.
Blackburn, 270 S.W.3d at 50 (citations omitted). "[A]s a prerequisite to an entry nunc pro tunc, there generally must exist some written notation or memorandum indicating the intent
of the trial court to enter the judgment on the earlier date." Id. at 54 (footnote omitted).
The general rule is that to justify a nunc pro tunc order there must exist some memorandum or notation found among the papers or books
of the presiding judge, and a nunc pro tunc order will not be valid unless there is some such memorandum showing what judgment
or order was actually made and these jurisdictional facts recited.
Dewees v. Sweeney, 947 S.W.2d 861, 864 (Tenn. Ct. App. 1997) (quoting Gillespie v. Martin, 109 S.W.2d 93 (Tenn. Ct. App 1937) (quotation marks omitted)).
A prerequisite for a nunc pro tunc order then, is some previous action by the court that is not adequately reflected
in its record. It may not be granted to relieve an attorney from the consequences
of his own failure to comply with the rules, but only to correct mistakes or omissions
arising from the actions of the court itself.
Id.; see also Blackburn, 270 S.W.3d at 55 ("The error justifying a nunc pro tunc entry must have been due to the inadvertence or mistake of the court, not the attorneys
or parties"). "Therefore, when determining whether it should enter an order nunc pro tunc, the trial court should generally refer only to written notations or memoranda indicating
the court's intent to enter the judgment on a specified earlier date." Blackburn, 270 S.W.3d at 55.
"Although the trial court has the inherent authority to enter [an order] nunc pro tunc to amend or rectify the record, a nunc pro tunc [order] may not be entered in an attempt to make the record reflect what should have happened, rather than what actually did occur." Blackburn, 270 S.W.3d at 55-56. "A 'nunc pro tunc order' can only be made when the thing ordered has previously been allowed, but by
inadvertence has not been entered. It applies only to orders of court, and never to
action of counsel." Cantrell v. Humana of Tenn., Inc., 617 S.W.2d 901, 902 (Tenn. Ct. App. 1981) (quoting Grizzard v. Fite, 191 S.W. 969 (Tenn. 1916)).
In this case, the information provided indicates the "scrivener's error" the court
corrected in its January 2010 order was the result of an error or negligence by Recipient's
parents or the attorney for Recipient's parents who prepared the Trust document. The
court noted the prohibited language allowing for the payment of funeral or burial
expenses before reimbursement of State medical assistance payments was "inserted originally
by error" and it entered its order nunc pro tunc to reflect "the parties' original intent." Nothing in the court's order suggests that
the error was due to a mistake by the court, as required for entry of an order nunc
pro tunc. See Blackburn, 270 S.W.3d at 50, 54-55; Dewees, 947 S.W.2d at 864; Cantrell, 617 S.W.2d at 902. Moreover, the information provided, including the court order
and the Trust document, does not provide clear and convincing evidence that the court
intended the Trust to exclude the prohibited language when the Trust was originally
created. See Blackburn, 270 S.W.3d at 50; Dewees, 947 S.W.2d at 864. The court could not enter its order nunc pro tunc in an attempt to make the Trust reflect what should have been omitted when the Trust
was originally created, rather than what was actually included in the Trust. See Blackburn, 270 S.W.3d at 55-56. Therefore, we believe the court did not have the authority to
enter its order nunc pro tunc.
We recognize SSA's policy that although SSA is not bound by the decision of a State
court in a proceeding to which SSA was not a party, SSA is not free to ignore an adjudication
of a State court where the following prerequisites are found: (1) an issue in a claim
for Social Security benefits previously has been determined by a State court of competent
jurisdiction; (2) this issue was genuinely contested before the State court by parties
with opposing interests; (3) the issue falls within the general category of domestic
relations law; and (4) the resolution by the State trial court is consistent with
the law enunciated by the highest court in the State. See Social Security Ruling (SSR) 83-37c (adopting Gray v. Richardson, 474 F.2d 1370 (6th Cir. 1973)). However, the order in this case does not meet all
of the prerequisites in SSR 83-37c. The court's order was not genuinely contested
by parties with opposing interests, and the issue addressed by the court's order did
not fall within the general category of domestic relations law. Moreover, as discussed
above, the court's entry of a nunc pro tunc order was not consistent with Tennessee law. Thus, SSA was not bound under SSR 83-37c,
or any other legal authority, to accept the nunc pro tunc aspect of the court's order.
CONCLUSION We believe SSA is not bound by the court's order entered nunc pro tunc purporting to amend the Trust as of the date the Trust was originally created. SSA
should consider the Trust amended as of the date of the court order—January 21, 2010—and
not before that date.
Very Truly Yours
Mary A. S~
Regional Chief Counsel
By: Brian C. H~
Assistant Regional Counsel