by David A. Zwyer, Esq. and published by Ohio Developmental Disabilities Council
Please note that as of June 1, 2015, the rules regarding guardianship changed. This publication was written prior to 2015, but still provides
helpful information. The Ohio DD Council recommends that you consult an attorney before implementing any of the information in this
This booklet attempts to offer a brief, non-legalistic
overview of the estate planning options that exist at the time of this writing
for people with disabilities and their families in Ohio. It also provides a
summary of other areas that might be called “future planning.” Readers
should consult their own attorneys before attempting to implement information in
this document, which is abbreviated and cannot begin to cover situations unique
to each person. With that caution in mind, users are welcome to copy and share
About the Author
David Zwyer, Esq., has been speaking to people with
disabilities and their families about guardianship and estate planning for over
30 years. Dave served as the Chairman of the Disability Law Committee of the
Ohio State Bar Association, and he worked for various organizations that serve
people with disabilities including The Arc of Ohio, the Ohio Coalition for the
Education of Children with Disabilities (OCECD), Advocacy and Protective
Services, Inc. (APSI), the Ohio Department of Developmental Disabilities, the
Ohio Developmental Disabilities Council (ODDC), as well as a law firm in
Columbus. Dave currently works with the Community Fund Management Foundation (CFMF).
About the Ohio DD Council
The Ohio Developmental Disabilities Council (ODDC) is a
planning and advocacy group of approximately 30 members appointed by the
governor. ODDC receives and disseminates federal funds in the form of grant
projects to create visions, influence public policy, pilot new approaches,
empower individuals and families, and advocate for system change.
Estate Planning for People with Disabilities: Initial Considerations
In most cases, parents, while they are alive, are able to
assist their children financially without jeopardizing their children’s
eligibility for public assistance benefits. One of the most important purposes
of this book is to give parents information about how they can continue to
assist their children, even after they die, without jeopardizing necessary
Many individuals with disabilities need to remain eligible
for Medicaid and Supplemental Security Income (SSI), especially if they have
significant medical needs. As a general rule, in Ohio that means the individual
cannot have assets greater than $1,500 and still remain eligible. (The SSI limit
is $2,000, but the Medicaid limit is $1,500. Most people need to consider the
lower limit.) Care must be taken to determine what might be considered an asset
to the individual when a parent dies, including, but not limited to joint bank
accounts, payable on death (POD) accounts, life insurance policies, IRAs
(individual retirement accounts), life estates and trusts. For example, one
question you might ask is, “who are the beneficiaries of a life insurance
policy on the life of a parent when the parent dies?” Also, “who owns a life
insurance policy on the life of the person with a disability when the
In Ohio, parents’ legal obligation for support of their
child generally ends when the child reaches age 18, the age of majority. There
are exceptions, such as when a court extends the obligation as the result of a
divorce. [See Revised Code, Sections 2919.21 and 3103.03 and Castle v. Castle,
15 Ohio St. 3d 279 (1984).]
Individuals over 18 who are unable to support themselves
because of a disability may be eligible for various public assistance benefits
including, but not limited to Medicaid and SSI. Keep in mind that eligibility
for these programs as well as Social Security Disability Insurance, is
contingent upon the applicant being sufficiently disabled. Medical documentation
will be needed for this purpose. In some cases a child under the age of 18 may
also be eligible for public assistance benefits.
If the disability had its onset before age 22, the
individual might be eligible for services from a County Board of Developmental
Disabilities (DD). The County Board uses funds raised by county levies in
addition to Medicaid to provide a wide variety of residential and employment
supports, as well as the assistance of a social work/case management type of
person, usually called a Service and Support Coordinator.
Parents typically continue to assist and support their
children after the age of 18 whether or not they have a disability. If parents
continue to provide full support for a child after he or she reaches age 18, the
child will not be eligible for Medicaid and SSI. Even if the parents only
provide supplemental items, they must do so carefully in order to retain their
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Eligibility for Medicaid, Supplemental Security Income (SSI), and Social Security Disability Insurance (SSDI)
essentially a needs-based health insurance program that pays for a variety of
services for people who are elderly, blind or who have other disabilities.
Services include, but are not limited to coverage for prescription medications,
adaptive equipment and residential programs and supports. In addition to paying
for nursing homes and group homes, various Medicaid Waiver programs (PASSPORT,
Home Care, Transition, IO or Individual Options, and Level 1) also provide
residential supports. Individuals with disabilities who work may be able to
accumulate more than $10,000 in assets if they participate in the Medicaid
Buy-In for Workers with Disabilities Program, but they may also have to pay a
premium in order to keep Medicaid as their health insurance.
Supplemental Security Income (SSI) is a monthly payment from taxpayer funds that is used to
provide food, shelter and other necessities for those who are eligible. As a
needs-based program, many people equate SSI with welfare. In 2010, payments ran
as high as $674 per month, but that amount might be reduced based upon the
earned and unearned income of the recipient.
A person with too much income or too many assets will not
be eligible for either SSI or Medicaid. In some cases, it might be worthwhile to
accept a reduction in SSI in order to accept income from another source, because
often the reduction in SSI is not dollar for dollar. Also, some income might be
offset by qualifying expenditures in a process called “spend down” that
would allow a person to qualify. It is important to consult with someone
knowledgeable about these benefits in order to set up an estate plan that does
what you want it to do.
Social Security Disability Insurance (SSDI), on the other hand, is a monthly payment based
on the amount of Social Security the recipient or, if they are a dependent, a
parent has paid into the system as a wage earner. A person with a disability who
worked and paid into the system may be able to draw SSDI as a result of their
own work history. A person with a disability who is the dependent or survivor of
a parent with a work history may also be eligible for SSDI. A person will not be
eligible for SSDI if they are performing a substantial gainful activity (SGA)
and have earned income over approximately $1,000 per month. Monthly SSDI
payments are determined by the amount paid into the system and the amount of
earned income, not by a person’s assets. If a person is receiving SSDI, then
Medicare provides their health insurance.
In some cases, it may be more beneficial for a person to
receive SSDI rather than SSI. For example, in some cases you might receive a
larger amount under SSDI than under SSI, and you don’t have to worry about
what assets you have. In a small number of cases, a person may be eligible to
receive both SSI and SSDI, as well as both Medicaid and Medicare. In the latter
situation, the total monthly payment of SSI and SSDI will be limited to the same
amount as the maximum monthly SSI payment. Thus, it is important to work closely
with Social Security to determine which benefits the person with a disability
may be eligible for.
If remaining eligible for public assistance benefits is
important, then two principles should be kept in mind:
- An asset does not affect eligibility for Medicaid and SSI unless
it is accessible to the individual. Some assets, such as a home, an irrevocable
prepaid burial account and a car of minimal value are considered exempt when
determining a person’s eligibility.
- If an asset, such as a trust, provides basic necessities of life
to an individual with a disability (food, medical care, shelter, education),
then Medicaid and SSI will not pay for them. If there is a standard in a trust
requiring the trustee to pay for such items, then the trustee will be expected
to pay for all necessities for the person with the disability, and the person
will not be eligible for Medicaid and SSI.
Not all attorneys are familiar with all of the options
discussed in this booklet. In order to identify attorneys who do have some
knowledge and interest about this type of estate planning, contact a local
organization that serves individuals with disabilities. Examples are County
Boards of DD, Community Mental Health or ADAMH Boards, Arcs, and Easter Seals.
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Last Will and Testament
At one time it was thought that parents had to disinherit
their child with a disability in order to ensure that he or
she would be eligible for various public assistance benefits. Although other
options exist today, it is still not unusual for parents who are seeking a
simple approach to estate planning to distribute their assets among other
children with the unwritten understanding that the other children will use their
increased share to provide for the child with the disability. Although this
solution is simple, experiences such as death, divorce, bankruptcy and creditor
claims may complicate it. Also, such an “understanding” is not enforceable.
If such an approach is taken (i.e., disinheriting a child),
a clause might be added to the parents’ Will that affirms their affection for
the child with the disability and clarifies the parents’ intent. An example of
such a clause might be, “I am not
leaving anything to my child X, not because of any lack of affection, but only
because of his [or her] mental disability.”
Parents may also wish to consider dividing their assets
evenly among their children. It may be an error to leave a greater share to the
child with a disability without open communication and agreement with the other
children. After all, parents don’t want to risk alienating the siblings they
hope will step in when they are gone.
The Will also can be used to state who the parents want to
serve as guardian for the child, if that should ever become necessary. This will
help ensure that someone is available to step forward to file an application for
guardianship in probate court if a parent or current guardian dies, a support
system disappears or other circumstances change and make the guardianship
Because children often outlive their parents by 30-40
years, it is advisable to name guardians three deep:
- A primary;
- A first backup; and
- A second backup.
At least some of those named should be the same age or
younger than the individual with the disability.
A document that might be used to more fully explain the
intent of a person making a Will is called a Letter of Intent. It may make sense
to more fully express one’s wishes in such a Letter of Intent than in a legal
instrument such as a Will or a Trust. An increasing number of attorneys and
financial planners have forms for completing a Letter of Intent, that when
filled out, would provide very helpful information to future guardians or
It is possible for people with developmental disabilities
to make their own Will if they:
- Know what they own;
- Know who are “natural objects of their bounty” (legal language meaning family and friends); and
- Can decide to whom they want to leave their assets and
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Trusts: General Considerations
Trusts are flexible legal documents in which one party
leaves assets to another party (a trustee) to be used for the benefit of another
person, charity and so on. The trust instrument gives specific instructions as
to how to pay out the assets. Trusts are not only for the wealthy. They
represent a way to withhold assets from someone who may not be old enough, have
enough experience or have the ability to make wise decisions.
Trusts may be Testamentary or Living, Revocable or
Irrevocable. Testamentary Trusts are created in a person’s Last Will and
Testament, often from the proceeds of the deceased person’s estate. Living
Trusts are more of a contractual arrangement, possibly with a bank or
professional person as the trustee, or possibly with a family member other than
the beneficiary as trustee. Living Trusts are sometimes promoted as a means to
avoid probate. However, in some situations it may be wise to have the
distribution of the estate supervised by a probate court.
A Revocable Trust may be amended or revoked. An Irrevocable
Trust generally may not be amended or revoked, although there may be some
exceptions to the general rule.
Selecting a trustee can present its own problems. For
instance, trust departments of many banks in larger cities will not act as
trustee for a trust with a balance of less than $200,000. On the other hand, if
a family member is going to be asked to serve as trustee, that person should
have skill in handling financial matters or be willing to hire someone who has
such skill to assist. It may also make sense for the trustee to be someone other
than the person’s guardian. This section includes examples of some programs
where a trustee is provided. However, an advisor to the trust also may be needed
Finding a qualified attorney with whom to explore options
is extremely important. A knowledgeable attorney will help clients accomplish
their purpose with the trust, without affecting the beneficiary’s eligibility
for Medicaid, if that is the clients’ wish.
The purpose of creating trusts for people with disabilities
is to improve the quality of life for the beneficiaries by paying for items that
public assistance programs do not. These are items that parents or other
relatives would have continued to pay for if they were still alive. Using trusts
to enhance the happiness of the beneficiaries and to keep them more engaged in
meaningful activities can reduce behavior problems, reduce peer-to-peer
incidents and reduce costs to the public. Federal and state laws now allow
trusts to be created for people with disabilities without affecting their
eligibility for Medicaid.
If the purpose of the trust is to pay for supplemental
items or luxuries only, it is worth remembering that it may not take a great
deal of money to accomplish that limited purpose.
Several different trust options are now available that
allow providing for people with disabilities without affecting their eligibility
for Medicaid. A brief summary of each follows. But first, it is important to
consider where the money that will be used for the trust will come from.
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Which Trust is Right for You?
The source of the money to be used to fund a trust
determines which trusts can be used in given situations. If the money comes from
someone other than the person with a disability, for example, a relative or a
friend, then the only types of disability trusts that can be created are either
a Wholly Discretionary Trust or a Supplemental Services Trust. If the money
belongs to a person with disability, then there are two other options—either a
Special Needs Trust (i.e., a regular Medicaid Payback Trust) or a Pooled
Medicaid Payback Trust.
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Trusts Funded with Assets from Family & Friends
Option 1: Wholly Discretionary 3rd Party Trusts
A Discretionary Trust is one in which the trustee is given
a great amount of “discretion” as to when and how assets in the trust are
distributed. The term “Wholly” Discretionary Trust refers to recent changes
in the Ohio Trust Code which give greater recognition and support to the intent
of the creator of the trust. “3rd Party” means that the creator of the trust
is using it to benefit a third party—the person with a disability—not
A Discretionary Trust is one of the most common estate
planning tools for families of children with disabilities in Ohio and in many
other states. How useful this trust is depends on the regulations, laws and
court decisions of each state. The Medicaid regulations and laws in effect at
the time someone applies for Medicaid will determine whether that person is
eligible for Medicaid.
The primary advantage of a Discretionary Trust in Ohio is
that there is no requirement that a portion of the trust be turned over to the
state upon death of the beneficiary. That is logical because the funds in the
trust never “belonged” to the beneficiary. However, such a trust must be
carefully drafted, or its purpose may be defeated, once again pointing out the
need to seek a qualified attorney.
Since 1968, the State of Ohio has been able to invade
trusts (old method) or to declare a person ineligible for Medicaid (current
method) if he or she is the beneficiary of a trust containing words like “for
the benefit, support, education, maintenance and welfare” of the individual
with the disability. A court can order the trustee of such a trust to pay
support to the beneficiary of the trust based on this enforceable standard. It
is easy to determine the cost of items such as food, clothing, and shelter.
While the trustee is paying for this support, the beneficiary would be
ineligible for Medicaid. [See Kreitzer v. Bureau of Support, 16 Ohio St. 2d
In 1996, use of a Discretionary Trust for a person with a
disability came before the Ohio Supreme Court. The court upheld Medicaid
eligibility in that case because the trust assets were not accessible to the
beneficiary. [See Young v. Department of Human Services, 76 Ohio St. 3d 547.]
In March 2004, Ohio Revised Code Section 5111.151 was
enacted into law. (See also Section 5101:1-39-27.1 of the Ohio Administrative
Code.) The most striking provisions of that law are as follows.
- A trust is considered to be an available asset—and would make
the beneficiary ineligible for Medicaid—if the trustee is permitted by the
terms of the trust to pay for “medical care, care, comfort, maintenance,
health, welfare, general well-being, or a combination of these purposes” for
the beneficiary. [See subsection (G)(2)]
- The trust is not considered to be an available asset if it
contains a “clear statement” that requires (that is, no discretion) the
trustee to use the trust for a purpose other than medical care, care, comfort,
and so on, as above (that is, for supplemental items, luxuries, and so on). [See
- Most importantly, the trust is not considered to be an available
resource if it contains a “clear statement” that requires (that is, no
discretion) the trustee to terminate the trust if it is counted as an available
resource. This section appears to give the grantor the ability to use the trust
to pay for necessities as long as this “poison pill” clause is included in
the trust. [See subsection (G)(4)(d).]
Thus, a Discretionary Trust may now be set up for a person
with a disability in such a way that the trustee can even pay for necessities,
without having a negative impact on the beneficiary’s eligibility for
Medicaid. The state has no incentive to challenge such a trust when the only
result will be that the trust will terminate and assets will be distributed to
people other than the beneficiary and the person will still be eligible for
Medicaid. Careful drafting, including following the rule/statute on Medicaid
Trusts, remains important.
The real impact of Discretionary Trusts that are used to
pay for necessities may not be on Medicaid eligibility, but on eligibility for
SSI. Parents, as well as attorneys and financial planners advising them, will
have to consider if it is worth setting up a trust that might reduce or
eliminate SSI benefits, no matter which type of trust is used.
As a result of the Kreitzer and Young decisions and the
subsequent enactment of Section 5111.151 of the Ohio Revised Code, the following
drafting techniques are often recommended:
- Avoid an enforceable standard (e.g., “benefit, support,
education, maintenance and welfare”) and give complete discretion to the
- Include a termination, “poison pill” or “booby trap”
clause that causes the trust to “blow up” and trust assets to be distributed
outright to alternative beneficiaries if the trust becomes subject to invasion
or causes a loss of benefits;
- Include a spendthrift clause clarifying that the beneficiary does
not own the assets of the trust, cannot require the trustee to make
distributions, and that creditors cannot reach the assets (that is, the
beneficiary does not own, control or have access to the assets);
- Require that distributions be made only for supplemental items
over and above necessities of life; and
- List more than one possible beneficiary.
Supplemental Services Trusts
In 1993, Ohio authorized the creation of Supplemental
Services Trusts to benefit people with disabilities who are being served-—or
who are eligible to be served—either by state or local Mental Health or
Developmental Disability (DD) systems. The primary advantage of a Supplemental
Services Trust is that it provides a statutory safe harbor (safe from invasion
or challenge by the state if the trust meets certain conditions set forth in the
law). [See O.R.C. Section 5815.28, O.A.C. DD Section 5123: 2-18-01 and O.A.C.
Mental Health Section 5122-22-01.]
To meet requirements of the law, the Supplemental Services
Trust cannot be created with more than $234,000 as of 2011. The limit on the
trust amount increases by $2,000 each year. An earlier version of the law that
limited Supplemental Services Trusts to Testamentary Trusts has been eliminated.
Assets used to create this trust must come from someone
without a legal obligation of support and cannot belong to the beneficiary.
Expenditures from the trust are limited to those items defined as
“supplemental services,” that is, non-necessities such as recreational
items, vacations, or items for which Medicaid or other third-party payers have
denied payment. Expenditures may also include an amount up to $4,500 (Department
of Mental Health) or $5,000 (Department of DD) for burial, but Social Security
may question that expense if it occurs after the beneficiary dies. As a result,
expenditures from the trust for the funeral, burial, marker, vault, etc. should
be paid for the beneficiary with irrevocable pre-paid arrangements prior to the
death of the beneficiary of the trust.
The primary disadvantage of the Supplemental Services Trust
is that at least 50 percent of whatever remains in the trust at the time of the
beneficiary’s death goes to the State of Ohio. That amount must be deposited
into a fund in the State Treasury to be used for the benefit of others who do
not have such trust arrangements. People may want to consider this type of trust
for smaller amounts (for example, $25,000). That way the amount paid back will
never be substantial. In addition, if a trust accomplishes its primary purpose
of enhancing the life of the beneficiary, the 50 percent forfeiture when the
beneficiary eventually dies may seem to be of little consequence.
However, despite the fact that Section 5815.28 of the Ohio
Revised Code gives a roadmap to attorneys who do not have much experience with
disability trusts, most people will chose to use a Discretionary Trust instead
because of the absence of a payback requirement.
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Trusts Funded with Assets of the Beneficiary
What options exist when a person with significant
disabilities, for whom health insurance/Medicaid is an absolute necessity, comes
into a windfall of a significant amount of cash?
- Option 1: the person could go off Medicaid and pay for everything
himself until those funds are gone.
- Option 2: the person could spend the funds down below $1,500 and
stay on Medicaid (e.g., purchase clothing, furniture, an irrevocable pre-paid
burial account, and even repay what Medicaid has spent on him). Keep in mind
that a person has nine months to get back under $1,500 in assets if the funds
came from a back payment in governmental benefits such as SSI or SSDI, but only
until the end of the month they received the funds if they came from another
- Option 3: the person could put the money in excess of $1,500 into
a Medicaid Payback Trust and retain eligibility for Medicaid.
It is not an option to give away an asset (e.g., to a
friend or family member) in order to obtain or keep Medicaid eligibility. Such a
“gift” might trigger a period of ineligibility, and may even be considered
to be Medicaid fraud.
Examples of windfalls that a person with a disability might
receive include, but are not limited to back payments from Social Security (SSI
or SSDI), from a settlement or recovery from a personal injury lawsuit, from an
IRA as beneficiary, from an annuity or life insurance policy on someone else’s
life or from an inheritance.
Federal legislation passed in 1993 allows another type of
trust called a Medicaid Payback Trust. The name comes from the fact that this
type of trust must “pay back” Medicaid expenditures made on behalf of the
beneficiary from whatever is left in the trust at the death of the beneficiary,
even if repayment claims the entire amount left in the trust. In other words,
the government allows us to set aside money now for people with disabilities if
we agree to pay back Medicaid in the future if there are funds remaining at the
time of the beneficiary’s death. The payback is limited to the funds in the
trust at the time the beneficiary dies, but there is no requirement that there
be funds left in the trust at that time.
There are two types of Medicaid Payback trusts:
- Special Needs Trusts, and
- Pooled Trusts.
Assets in both types of Medicaid Payback Trusts must come
from the beneficiary. Expenditures are not limited to supplemental needs or
“supplemental services.” [See 42 USC 1396p(d)(4)(A) & (C) and O.R.C.
Section 5111.151 (F) (1) & (3).]
Medicaid Payback Trusts: Option 1 - Special Needs Trusts
The Special Needs Trust is the “regular” Medicaid
Payback Trust. It may appear to be much like a Discretionary Trust. In order to
be successful as a statutory safe harbor, it must comply with both state and
federal law and the regulations of the Ohio Department of Job and Family
Services. This type of trust can be created for anyone with a disability by a
parent, grandparent, legal guardian or a court. The trust must be funded before
the beneficiary reaches age 65.
Although a Special Needs Trust must be created with assets
that belong to the individual with the disability, funds from other parties can
be added once this trust has been established. Special Needs Trusts will
normally be created as Living Trusts, and must be Irrevocable.
Medicaid Payback Trusts: Option 2 - Pooled Trusts
Pooled Trusts are called “pooled” because the funds
from many trusts are pooled for purposes of investment. However, a separate
account must be maintained for each beneficiary.
Pooled Medicaid Payback Trusts must be established and
managed by nonprofit corporations. That does not mean that a lot of nonprofits
offer Pooled Trusts or that it is easy or quick for a nonprofit corporation to
establish a Pooled Trust, because there are special requirements in Ohio law for
a person or agency that holds itself out as doing business as a “trustee”
and handling funds for other people. In Ohio, the trustee normally has to be a
bank, savings and loan or a charitable foundation.
The requirements for Pooled Trusts are very similar to
those for Special Needs Trusts in the following respects:
- In the normal course of events, funds remaining in the
beneficiary’s account at the time of his death must first be used to repay the
state for past Medicaid expenditures; and
- The Pooled Trust can be created by a parent, grandparent, guardian
or a court.
Differences between Pooled and Special Needs Trusts include
- A person with a disability may establish a Pooled Trust, in
addition to the parent, grandparent, guardian, or the court.
- The Pooled Trust provides a Trustee or acts as the Trustee.
- The person creating a Pooled Trust can leave trust assets in the
trust for use by other beneficiaries or to cover overhead expenses of the Pooled
Trust instead of paying back Medicaid.
Pooled Trust Programs in Ohio
Pooled Trust arrangements exist in virtually every state. A
listing of Pooled Trust Programs in Ohio and in other states can be found on the
Internet at http://specialneedsanswers.com/pooled-trust.
A brief description of two pooled trust programs in Ohio follows.
The Community Fund Management Foundation (CFMF), was
created by the Cleveland Federation for Community Planning and the Cuyahoga
County Board of DD. CFMF administers both a Pooled Trust and a Master Trust.
(The Master Trust is a carefully drafted Wholly Discretionary 3rd Party
Beneficiary Trust.) The CFMF accepts clients from anywhere in Ohio. Anyone with
any type of permanent disability may be a beneficiary under the trust. Contact
CFMF directly at (216) 736-4540 or at www.CFMF.org
for more information and their fee structure.
CFMF also offers a type of Pooled Trust called a Roll-In
Trust that allows individuals with a disability to send in small amounts each
month until enough money accumulates to activate a trust. This seems to be the
only option that allows people with disabilities to set aside money for their
Another Pooled Trust Program in Ohio is called the
Disability Foundation. The foundation works closely with the Dayton Foundation
and offers its services statewide, but with a focus primarily on serving people
in the Miami Valley area (Montgomery, Greene, and Miami Counties). The
Disability Foundation offers two types of trust programs. The Ohio Community
Pooled Annuity Trust (OCPAT) uses annuities
to create a guaranteed stream of funds for supplemental
services for the beneficiary. In addition, the creator of the trust may be able
to deduct a portion as a charitable deduction. The second type of trust is
called the Flexible-Spending Trust. Call (937) 225-9939 or see www.disability-foundation.org
for further information.
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Summary of Disability Trust Options
If it is important that a person with a disability retains
eligibility for Medicaid and SSI, there are several options other than
disinheritance that might be considered, all of them trusts. Trust assets cannot
be accessible to the person with a disability and should, in most cases, be used
only to purchase supplemental items.
If the money for the trust comes from a relative or a
friend, there are only two trust options: a Wholly Discretionary Trust or a
Supplemental Services Trust. If the money for the trust comes from a person with
a disability who will also be the beneficiary of the trust, there are two other
trust options, both Medicaid Payback Trusts: the Special Needs Trust and the
Pooled Medicaid Payback Trust.
The only option that does not require that at least a
portion of the funds be paid back to the state or forfeited when the beneficiary
dies is the Wholly Discretionary Trust. Keep in mind that type of trust cannot
be created or later funded with the beneficiary’s money.
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A Support Trust is a trust that is used to pay for the
necessities of life for the beneficiary, such as food, clothing, or shelter.
Those items are often covered by the trust standard of “benefit, support,
education, maintenance and welfare,” or words to that effect, a standard to be
avoided in the disability trusts referred to in the previous sections. Support
Trusts might be used to support a surviving spouse who is not very good at
managing money, or to support surviving children and pay for their college
education. Thus, Support Trusts are very common.
A Support Trust will make a beneficiary with a disability
ineligible for Medicaid and SSI. However, if there is a lot of money available
to support a person with a disability, then retaining eligibility for public
assistance benefits for the beneficiary may not be important. Consider the
examples of a very wealthy family whose only child is a person with a
disability, or of a situation where a person with a disability wins several
million dollars in a lottery or as the result of a lawsuit. Eligibility for
public assistance may not be important if there are sufficient private dollars
to purchase better services than those available through public assistance
programs, i.e., if a person has the funds to privately pay for services.
Further, having a Support Trust might eliminate the need for a person with a
disability to have a Guardian of the Estate.
However, in situations where the funds in a Support Trust
might run out before the beneficiary dies, one of the disability trusts referred
to in the previous sections might be created in addition to the Support Trust.
Then the disability trust will continue to provide extras in the beneficiary’s
life over and above what the government will pay for, just as parents did during
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Leaving the Family Home
An individual can own a home and be eligible to receive
public assistance benefits. The primary disadvantage of home ownership by
someone with a mental disability is that a disreputable person might attempt to
exploit the individual and move into, or attempt to gain ownership of, the home.
Therefore, a mechanism needs to be in place to prevent financial exploitation by
others. Also, if the individual has to move out of the home for medical or other
reasons, the home might need to be sold. As a result, the individual might lose
his or her eligibility for Medicaid and SSI when he or she receives proceeds
from the sale of the house.
Another disadvantage of home ownership is that other
resources may be needed for the individual to live in the home. It may be
necessary to provide funds beyond those left in the trust—that is, if the
trust funds can only be used for supplemental needs or services—for purposes
such as supervision in the home, maintenance of the home, utilities, cleaning,
cooking and property taxes.
It might be possible to allow other people to move into the
home to share household expenses. If those other people are also people with
disabilities, there might be public funds available to help support the
household, such as County Board of DD funds. Creative solutions may be
needed—including, for example, allowing someone who works for a disability
program in an adjoining county to live in the home rent-free in return for
providing assistance with cooking, cleaning or driving.
Although it is possible to leave a home in trust for an
individual with a disability without affecting eligibility for Medicaid, those
arrangements are often complex and require careful planning. For example, it
might be necessary for the individual with a disability to pay rent to the trust
so that the value of being able to live in the home is not attributed to him or
her as income.
A person might also be given the right to live in a home
during his or her life (that is, a life estate in the home). But even a life
estate could affect a person’s eligibility—especially for SSI—if the
monthly value of being able to live in the home is seen as income.
It might also be possible for a family to leave a home to a
nonprofit housing corporation associated with a County Board of DD, a
residential provider or to other siblings with the understanding that the
individual with the disability will be able to continue to live there.
Tying the individual to the family home may also not be a
good idea because the person’s needs change over time. For example, a
two-story family home with all the bedrooms upstairs could no longer meet his
needs if he loses his mobility.
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A discussion of future planning would not be complete
without considering guardianship. The natural guardianship of parents ends when
their children reach the age of 18 in Ohio. Many parents struggle to decide if
they need to remain guardians after that. If they decide to retain guardianship,
they must complete an application for guardianship and submit it to their local
probate court. In some counties it is necessary to have an attorney file for
There are two prerequisites for guardianship in Ohio law:
- The individual must be incompetent in at least one important area
of his or her life. That determination is often easy to make as a result of
real-life experiences; and
- There must be a present need for the guardianship. A person may
have significant deficits in his or her life, but the support network may be so
strong that guardianship is not necessary. The expression, “If it ain’t
broke, don’t fix it” may be applicable.
There are several types of guardianship.
- Full or Plenary Guardianship gives the guardian authority over all aspects of
a person’s life.
- Guardianship of the Estate involves only financial matters.
- Guardianship of the Person involves all matters other than financial.
- Emergency Guardianship allows a court to intervene to appoint someone on short
notice and for a short period of time. However, probate courts are reluctant to
appoint emergency guardians.
- Interim Guardianship allows a court to appoint someone on a temporary, interim
basis because the former guardian is no longer available.
- Limited Guardianship allows a probate court to appoint someone as guardian only
over the portion of a person’s life in which he or she is both incompetent and
has a need. Thus, you might have a Limited Guardian for medical purposes only
(that is, to provide consent for medical procedures), or for placement purposes
only or for the limited purpose of approving behavior plans and/or psychotropic
medications. This is the least restrictive form of guardianship. [See O.R.C.
Guardianship of the Estate, or Full or Plenary
Guardianship, may not be necessary. If the only significant income a person
receives is a Social Security benefit, a Representative Payee may be able to
handle all relevant financial matters. A Guardian of the Person, or a Limited
Guardian, could handle other matters.
A person is not required to live in Ohio to be appointed as
guardian for minor children pursuant to a parent’s Will. In addition—and
this is a change in Ohio law that became effective in 2008—a person is not
required to live in Ohio to be appointed as a guardian for an adult who is
incompetent if the proposed guardian has been named by the adult individual’s
parents in a legal writing such as a Will or Power of Attorney. However, it is
difficult for a guardian to perform adequately if the guardian does not have
frequent face-to-face contact with his or her ward (the subject of the
For a “writing” other than a Power of Attorney to be
effective as a nomination, “the writing shall be signed by the person making
the nomination in the presence of two witnesses; signed by the witnesses;
contain, immediately prior to their signatures, an attestation of the witnesses
that the person making the nomination signed the writing in their presence; and
be acknowledged by the person making the nomination before a notary public.”
[See O.R.C. Sections 2109.21(C), 1337.09(D), and 2111.121(A).]
Ohio law also provides personal immunity for a person who
becomes guardian while he or she is acting as guardian. To have protection under
this section of the law, it is necessary only that the person make it clear that
he or she is acting in official capacity as guardian. [See O.R.C. 2111.151.]
The Ohio Department of DD also provides the services of an
agency to act as guardian for those who need it and have no one else available.
For more information, contact Advocacy and Protective Services, Inc., (APSI) at
(800) 282-9363 or see their Web site at www.apsiohio.org.
There are alternatives to guardianship, especially for
financial purposes. As mentioned before, if a person’s only assets are
payments from Social Security, then a Representative Payeeship may be the simple
solution. Another alternative is one of the trusts discussed earlier, or a
Durable Power of Attorney for financial purposes. See the later discussion on
powers of attorney (POA), and note that the makers must be competent when they
give/execute the POA.
Finally, for those who are competent mentally but who have
a physical disability, Conservatorship may be an option. An individual selects
his own Conservator who is then appointed by the probate court. An individual
can terminate the Conservatorship at any time.
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A few years ago, Ohio passed legislation authorizing use of
advanced directives, known as Living Wills and Durable Powers of Attorney for
Health Care. Since passage of the legislation, the Ohio State Bar Association
and the Ohio State Medical Association jointly prepared standard forms for both
types of directives. These forms are the ones most commonly used in Ohio. [See
O.R.C. Sections 1337.11 et. seq. and O.R.C. Chapter 2133.] The forms are
available to different constituencies through many different agencies including
the Ohio Hospital Association, the Ohio Osteopathic Association, the Ohio State
Bar Association, and the Ohio State Medical Association. See, for example, the
forms available on the Web site of the Ohio Hospice and Palliative Care
Organization at http://associationdatabase.com/aws/OHPCO/pt/sp/livingwills.
Federal law requires health care facilities to provide
certain information to all people prior to admission, including the opportunity
to sign advanced directives. The health care facility cannot refuse to admit
someone on the basis of whether they complete an advanced directive. This is
simply a notice provision. ICF/MRs (intermediate care facilities for people with
mental retardation) are not required to give such notice.
Powers of Attorney
for Health Care
To understand Powers of Attorney for Health Care, it is
important to understand Powers of Attorney in general. A Power of Attorney is a
legal document by which one person gives another (that is, the Attorney-in-Fact,
who need not be a lawyer) power to do certain legal acts in his or her absence.
People must be competent when executing a Power of Attorney, and they cannot
give someone else more legal authority than they themselves have. For example, a
daughter with an intellectual disability cannot give her mother more authority
than she herself could exercise.
Examples of Powers of Attorney include the power to renew
one’s automobile registration or to sell a specific piece of property.
Nondurable powers of attorney expire when the maker becomes incompetent. A
“Durable” Power of Attorney (one that states an intent to make it durable)
has the added feature that it will continue to be valid even if the maker of the
power becomes incompetent.
All powers of attorney expire when the maker dies.
A Power of Attorney for Health Care allows a person
(designated as the Attorney-in-Fact) to make medical decisions on another
person’s behalf if something happens that restricts the person from making
decisions on his or her own.
The Power of Attorney may provide guidelines as to how
those decisions are to be made. The Attorney-in-Fact is to make decisions as the
creator of the Power of Attorney would have. At the very least, some discussions
should take place as to the creator’s wishes.
A Living Will is a legal document in which a person states
what medical care he or she would like to receive or not receive in given
situations. Probably the most difficult decision to make in completing this
document is whether a person wants nutrition and hydration (food and water by
artificial means such as feeding tubes and IVs) in the event he or she becomes
Ohio law requires the maker of Advance Directives to be
“of sound mind” at the time the documents are executed. It is recommended
that, if there is some doubt about the competency of the maker, the maker be
required to summarize what he or she is signing in his or her own words in the
presence of witnesses. It is this writer’s opinion that it takes a much
greater level of competence to understand the complexities of a Living Will as
opposed to the comparatively minimal level of competence required to sign a
Durable Power of Attorney for Health Care.
Just like a Will, a Living Will and Durable Power of
Attorney require that the person signs the document. No one has the authority to
sign advanced directives for someone else, not even a parent, a court-appointed
legal guardian, or the court itself.
The General Assembly has now recognized an Advanced
Directive for Mental Health Care. This new Advanced Directive allows people to
indicate what medications or treatments they consent to, which physicians they
want to see, and whom they want to act on their behalf if certain conditions
occur. It would seem wise for people with mental illness to use such a document
to state how they want to be treated, based on past personal experience. [See O.R.C. Sections 2135.01 through 2135.14, and 1337.14(D).]
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Do Not Resuscitate Orders (DNRs) or No Codes
It is common for parents or next of kin to make medical
decisions for their family member in certain situations, such as when the person
is comatose in the hospital after a serious accident or stroke. One such
decision is a Do Not Resuscitate (DNR) Order, or No Code, generally understood
to mean a physician’s order for the non-application of cardiopulmonary
resuscitation (CPR). In the normal course of events, a DNR is authorized by the
individual or his or her guardian, and is signed by a physician. A DNR is not a
request not to treat, although in some cases the treatment provided may be
limited to comfort care, that is care to relieve pain. Medical personnel are
still required to provide care and treatment according to acceptable medical
standards as long as it does not conflict with the DNR.
Ohio law authorizes a guardian of the person to approve
health care and treatment. Ohio law also specifically authorizes the guardian or
next of kin in a descending order of priority to withhold or withdraw
life-sustaining treatment for an individual who does not have a Living Will, if
the individual has a terminal condition or has been in a permanently unconscious
state and unable to make an informed decision for at least 12 months. Ohio law
does not specifically allow physicians to make those decisions. [See O.R.C.
Sections 2111.13(C) and 2133.08.]
A DNR is more appropriate when the individual is in the
final stages of a terminal condition, or when to treat aggressively would be
simply prolonging the process of dying rather than providing a realistic hope of
recovery. A DNR may also become appropriate when the person is suffering from a
very serious medical condition that makes the application of CPR painfully
invasive, ineffective or both.
It is not appropriate for a residential facility or a
nursing facility to require that every resident have a DNR on his or her medical
chart. Nor does it seem appropriate for a guardian to authorize a DNR when the
ward is in relatively good health or has a long life expectancy.
Ohio specifically recognizes two types of DNRs:
- DNR Comfort Care. The trigger for DNR Comfort Care is the
completion of a DNR Order or a Living Will with that provision in it. In other
words, only comfort care will be provided once the document has been signed.
- DNR Comfort Care Arrest. The trigger for DNR Comfort Care Arrest
is a cardiac or respiratory arrest. In other words, all normal care and
treatment is provided up until cardiac/respiratory arrest occurs.
Ohio law provides immunity for health care workers
(including physicians and emergency squad personnel) who follow the patient’s
directions, but they are still held to a reasonable standard of care. Standard
forms of identification can be used including bracelets, necklaces, and wallet
cards. [See O.R.C. Sections 2133.21 et seq. and O.A.C. Sections 3701-62-01 et
seq. See also, the Department of Health Web site at www.odh.ohio.gov.]
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PLAN in Ohio
Many parents, especially those whose only child has a
disability, look for someone to monitor and support their children after they
are gone. The Planned Lifetime Assistance Network, also known as PLAN, provides
such services. Originally established on the East Coast, many different PLAN
organizations have been created around the country. There are three in Ohio. The
oldest and most established, PLAN of Northeast Ohio, is in Cleveland and serves
more than 110 clients, many of them with mental illness. It provides case
management-type services including therapeutic recreation and counseling. There
are also PLAN units in Southwest Ohio and Central Ohio.
Although each PLAN organization looks a little different,
they all price out services over the projected lives of their clients. Parents
can “buy” those services by using one of the estate planning mechanisms
(i.e., trusts) discussed in this booklet. For further information about PLAN in
your area, contact your local public and private County Board of DD or mental
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