Ask any teacher, parent, or student right now and they’ll likely tell you that at-home education during COVID-19 has been a significant challenge. Remote learning is simply not a substitute for learning in the classroom; there are too many things that just can’t be accomplished on a Zoom call. For children with disabilities and their parents, who rely on the support of an aide or on modified learning, it’s particularly trying. Even with the best intentions, some delivery of crucial IEP services fell far short of needs, forcing some parents to lodge complaints. The U.S. Department of Education (DOE) has now released guidelines on resolving disputes with school districts amid this crisis. When schools were closed earlier this year, the DOE created protocols for at-home instruction and also announced that they would not waive the bulk of the Individuals with Disabilities Education Act, saying that learning must continue for all students during our national emergency. The DOE acknowledged that services for children with disabilities would not be the same during COVID-19, but that with collaboration, parents and educators could make things work. While the DOE required that schools had to provide each student with a disability the special education and related services identified in the student’s IEP, they were told to do so “to the greatest extent possible,” recognizing that in some situations there could be exceptional circumstances that could affect how a particular service was provided. In a nutshell, children with disabilities were entitled to at least the same options as the general education population during COVID-19, but within the context of the health and other challenges faced by a child and the school staff. Flexibility was necessary, but too many services and students were sacrificed. For teachers of students with disabilities, trying to provide the same kind of hands-on learning, proved impossible. Many educational services, such as occupational therapy, physical therapy and speech therapy, just don’t translate well in an online instruction format, leaving children without the necessary tools for their development and education. To respond to issues that have arisen between parents and school districts, the U.S. Department of Education’s Office of Special Education Programs (OSEP), released new guidance on how states and schools can address special education disputes during the COVID-19 pandemic. A two-part Q&A on the Department of Education’s website answers questions on how to move forward when the recommended informal efforts between parent and educators prove futile. Mediation, state complaint, and due process complaint procedures are all available avenues for resolving issues. Extensions of timelines will be permitted in certain cases, and parties can agree to hold resolution meetings virtually in cases where the pandemic prevents face-to-face discussions. Across the board, the level of education provided to students during COVID-19 has suffered. All children are losing ground, but children with IEP’s are at greater risk. Getting on the case now is critical for the fall and for getting ahead of potential future COVID-19 alternative learning plans. To read the DOE’s full Q&A go to: Part B: https://sites.ed.gov/idea/idea-files/part-b-dispute-resolution-in-covid-19-environment-q-a-document-june-22-2020/ Part C: https://sites.ed.gov/idea/idea-files/part-c-dispute-resolution-in-covid-19-environment-q-a-document-june-22-2020/    

In recent years, we’ve seen a major shift in the number of people reporting mental health disorders, and governments across the world are taking note. Until recently, mental health support services have been difficult to find and access, but that is now changing. As individuals, communities, and workplaces become more open to discussing mental health publicly, innovative programs are rapidly being developed to assist people with mental disorders.   While governments are just now starting to implement large scale mental health services, individuals and communities have been taking initiative to develop their own solutions. One solution, called “The Friendship Bench”, is a program started in Zimbabwe that trains grandmothers to talk with and find solutions for people with mental health issues. The program has been so effective that it has spurred similar initiatives in places across the world like Qatar, England, and New York City. While programs like these are effective, widespread access to them remains uncommon. Larger global entities have begun to address this problem by creating prominent campaigns advocating for mental health support.   Multinational organizations such as the United Nations General Assembly and the World Health Organization have started programs to motivate the public and private sectors to take action regarding mental health issues. These programs focus on training people to learn about proper prevention, treatment, and the support services available to those with mental health problems. With these initiatives in place, global trends will continue to improve in regard to the level of support available to those with mental health disorders. Through the combined efforts from global organizations and localized initiatives, support services for those with mental health issues will continue to become more prominent and accessible.

For many students with learning disabilities their graduation from high school marks a turning point in the level of support they receive as they enter into college or the workplace. Individuals will typically receive support only if they disclose their disability, but many lack the awareness, confidence, and self-advocacy skills to do so. The challenges to receiving the proper support are both internal and external. An individual’s temperament and level of resilience often play a role in their willingness and ability to seek support. Those that have high confidence and know how to advocate for themselves are more likely to find the resources available to them. External factors are equally challenging for people seeking support for their disability. These factors include unwieldy processes when applying for special accommodations as well as the social stigma of having a learning disability in college or in the workplace. Due to these challenges, working-age adults with learning disabilities are twice as likely to be jobless than those who do not have a learning disability. Despite the challenges facing people with learning disabilities, there are opportunities to overcome them with the proper planning, education, and support. Parents and educators play a big role in developing the mindset and attitude of individuals with learning disabilities. By encouraging an environment of awareness, advocacy, and support they can teach struggling students to accept their limitations and build on their strengths as they navigate life after high school. The proper planning also goes a long way in overcoming the challenges of a learning disability. Individuals, with the support of their family and mentors, should explore the options available to them prior to entering college or a work environment. They can work to develop a plan to guide them as they enter the next step in their life. Assistance for people with learning disabilities is also available from government initiatives such as the RISE Act and the Workplace Innovation and Opportunity Act. Both of which offer resources and training opportunities for people with learning disabilities entering into colleges or the workplace. Having awareness of the options open to them after high school combined with a positive attitude can greatly improve the likelihood of future success for individuals with learning disabilities. For more information, please visit: https://www.ncld.org/transitioning-to-life-after-high-school

Special Needs Trusts are the typically thought of as the best method for receiving money for individuals with disabilities. However, qualified professionals should take the time to analyze the advantages and disadvantages of Special Needs Trusts as they pertain to their client’s individual cases. A proper analysis should take into consideration the related costs pertaining to trusts or other savings methods as well as the benefits the client is eligible for, both currently and in the future. The benefits received by individuals with disabilities typically fall into two categories: means-tested and non-means-tested. Means-tested benefits are determined by state and federal government entities and include programs such as Medicaid, Supplemental Security Income, and Veterans Aid and Assistance. These programs take into consideration an individual’s income and savings among other stipulations to determine benefit eligibility. Non-means-tested benefits are different in that they usually do not take into consideration things like savings. Some examples of these types of benefits include Medicare and Special Education programs. With these eligibilities in mind, professionals and their clients can make an informed decision about whether to use a Special Needs Trust or to choose another savings option. Alternatives to a Special Needs Trust can vary widely from a Settlement Protection Trust to establishing an ABLE account to accept funds. Depending on the amount of funds being received into these accounts it may cause the loss of means-tested public benefits. For this reason, professionals should run a robust cost-benefit analysis of a Special Needs Trust. While a Special Needs Trust will protect many means-tested benefits for the beneficiary, the overall cost of establishing the trust and operation related fees should be weighed against the possibility of losing those benefits. When considering a Special Needs Trust both clients and professionals must tailor their approach to maximize the value created over the lifetime of the beneficiary.   For more information, please visit: https://www.begleylawgroup.com/2018/07/special-needs-trusts-a-cost-benefit-analysis/

In 2014, congress authorized a new savings option for people with disabilities. These new savings options, called ABLE accounts, began rolling out in 2016 and are already making a positive impact for account holders. Prior to the authorization of ABLE accounts, individuals with disabilities could not save money without the risk of losing their benefits such as Supplemental Security Income and Medicaid. Additionally, before the introduction of ABLE accounts, Special Needs Trusts were the only option for the families of individuals with disabilities to save money on their behalf without putting benefits at risk. Although ABLE accounts are typically cheaper and easier to use than special needs trusts, there are drawbacks. To qualify for an ABLE account the individual must have sustained their disability prior to the age of 26. There is also a cap on contributions, with the maximum total contribution limited to $14,000 per year, and the account can only grow up to $100,00 without prompting benefit losses. Individuals who hold an ABLE account can use their funds to pay for living expenses, career training, and transportation among other things that improve quality of life. Despite some drawbacks, ABLE accounts are filling a clear need in the disabled community. Individuals looking to open an account can research plans and sign up online. Many plans qualify for tax breaks on contributions, however these incentives vary from state to state.   For more detail, visit: https://www.consumerreports.org/money/able-accounts-can-help-people-with-disabilities-save-tax-free/

Trustees’ Distribution Risk: Getting to Know You By: Russell J. Fishkind, Esq. New Jersey State Bar Association Mid-Year Conference November 9, 2018

Clients engaged in estate planning generally seek to pass their wealth tax-efficiently to those they love with the hope that the executed estate planning documents will affect their intentions. To the extent trusts are created, trustees assume fiduciary responsibilities not only to prudently manage the trust corpus but also to make distributions as directed by the governing trust instrument. Sometimes the clients and nominated trustees discuss how best to distribute the trust corpus to the beneficiary… sometimes not. Sometimes the nominated trustees really understand the needs and resources of the beneficiary… sometimes not. And sometimes trustees feel confidant when exercising their discretion to pay out income or principal, and sometimes…they see a docket number in their future. Ambiguity is the birthplace of litigation. When a trust agreement directs the trustee to remit income and/or principal of the trust to, or on behalf of a beneficiary, in their sole and absolute discretion, the trustee assumes an enormous burden. What if the beneficiary is a gambler, a spendthrift, a drug addict, or one who struggles with special needs? What is the trustee’s duty to know about the beneficiary’s challenges and available resources? As the case law and the Uniform Trust Code develops, it’s becoming clear that if income and/or principal is to be remitted at the trustee’s sole and absolute discretion, then the trustee has a duty to know the beneficiary and, in many instances, what resources are available to the beneficiary. The more discretion granted and the more challenged a beneficiary may be, the more risk the trustee assumes with every distribution. Conversely, a mandatory distribution standard requires the distribution of income or principal, or both, in a manner that generally does not require the exercise of a trustee’s discretion or the corresponding duty to know the beneficiary. The most common mandatory distribution clauses require the distribution of all income, monthly or quarterly. In such instances the trustee’s risk may be limited to asset management, the prudent investor rule, and making sure the trust’s total return is reasonable together with the timely remittance of income, tax reporting and accounting. In contrast, discretionary distribution standards require the consideration of numerous factors. Sometimes the considerations are patently obvious, but more often,  a prudent discharge of duties may require a deep dive into the beneficiary’s life before making any distributions. Arguably, the most risk a trustee could assume is to be trustee of a supplemental needs trust, (SNT). As the following language makes clear, the SNT trustee is charged not only with having a comprehensive and thorough understanding of the effects of each and every distribution but with determining how the distribution will be utilized and if the distribution is in the beneficiary’s best interest.

A fairly standard SNT might include the following language:  

Supplemental Needs Trust Property that is to be held in the trust for the BENEFICIARY shall be held under this article and all references to a "Trust for the BENEFICIARY" shall be to the trust held under this article.

1. During the BENEFICIARY's Life.

The following provisions shall apply during the BENEFICIARY's life:

1. The trustee shall collect income and, after deducting all charges and expenses attributed thereto, shall apply for the benefit of the BENEFICIARY, in-kind, so much of the income and principal (even to the extent of the whole) as the trustee deems advisable in their sole and absolute discretion subject to the limitations set forth below. The trustee shall add all undistributed income to the principal of the Trust.
2. Consistent with the trust’s purpose, before expending any amounts from the net income and/or principal of this trust, the trustee shall consider the availability of all benefits from government or private assistance programs for which the BENEFICIARY may be eligible. The trustee, where appropriate and to the extent possible, shall endeavor to maximize the collection and facilitate the distribution of these benefits for the benefit of the BENEFICIARY.
3. None of the income or principal of this trust shall be applied in such a manner as to supplant, impair or diminish any governmental benefits or assistance for which the BENEFICIARY may be eligible or which the BENEFICIARY may be receiving unless, in the sole and absolute discretion of the trustee, such use of income and/or principal is beneficial to the BENEFICIARY.
4. The BENEFICIARY does not have the power to: (a) revoke this trust or (b) assign, encumber, direct or authorize distributions from this trust for his or her support and maintenance.
5. Notwithstanding the above provisions, the trustee may make distributions to meet the BENEFICIARY’s need for food, shelter, health care, or other personal needs, even if those distributions will impair or diminish the BENEFICIARY’s receipt or eligibility for government benefits or assistance. The trustee may make these distributions only if the trustee determines that the distributions will better meet the BENEFICIARY’s needs, and it is in the BENEFICIARY’s eligibility for or receipt of benefits. However, if the mere existence of this authority to make distributions will result in a reduction or loss of the BENEFICIARY’s entitlement program benefits, regardless of whether the trustee actually exercises this discretion, then this paragraph 5 shall be null and void and the trustee's authority to make these distributions shall terminate. As a result, the trustee's authority to make distributions shall be limited to purchasing supplemental goods and services in a manner that will not adversely affect the BENEFICIARY’s government benefits.
6. With the trustee's consent, any person may, at any time, from time to time, by Court order, assign, gift, or transfer, by deed or will, or provide income or add to the principal of the trust created herein. Any property so added shall be held, administered and distributed under the terms of this trust. The trustee shall execute documents necessary to accept additional contributions to the trust and shall designate the additions on an amended Schedule A of this trust.
7. It is my intent that the trust assets be utilized to maximize the potential and enjoyment of the BENEFICIARY’s life. The trustee may utilize trust assets for the sole benefit of the BENEFICIARY by providing the following not otherwise provided through government entitlements: education, services, vacations, transportation, recreation, aids, services of accountants, attorneys, social workers, medical, personnel, treatments, equipment, companions and feeders. I give to the trustee discretion as to the use of these funds so as to enhance the BENEFICIARY’s life. I desire that the trustee exercises the discretionary powers conferred in this article in such a manner as will provide flexibility in the administration of the trust and, in exercising such powers, the decision of the trustee shall be conclusive as to the advisability of any distribution of income and/or principal, and as to the BENEFICIARY to or for whom such distribution is to be made and such decision shall not be subject to judicial review.
8. The trustee, during the BENEFICIARY’s lifetime, may utilize trust funds to provide for a prepaid burial plan including an irrevocable funeral trust.
9. Upon the BENEFICIARY's Death.
10. Upon the BENEFICIARY's death, the property then held in his or her trust shall be distributed by the trustee to the BENEFICIARY’s descendants then living, per stirpes, provided, however that any distribution of a share of the remaining trust property to a descendant shall be distributed instead to the trustee of the descendants' separate trusts. Such share shall be held as a separate trust and shall be disposed of under the terms of the descendants' separate trusts under this trust agreement, the descendant for whom the share was set aside to be the beneficiary of his or her own descendant's separate trust.

It stands to reason that before distributing income and/or principal, the trustee must fully appreciate both the beneficiary’s challenges and available resources, and then, acting as a reasonably prudent trustee, distribute such resources in a manner that enhances the beneficiary’s life while simultaneously protecting any government benefit programs or resources. As if that’s not already a meaningful obligation, trusteeship of a supplemental needs trust is never on autopilot; it’s an ever-changing landscape and distribution risk exists with every remittance.     Such risks were recently addressed when a New York Trial Court ordered the Trustee to reimburse a special needs trust for almost $180,000 that it over distributed on private caregivers, cab rides, and medications that could have been obtained from government sources. See Liranzo v. LI Jewish Education / Research (N.Y. Sup. Ct., Kings Cty., No. 28863/1996, June 25, 2013). This case was based on a Trust created for the benefit of Eirol Liranzo who was injured as a child. As reported, in 2003, the remaining $422,012.54 from the settlement of his personal injury lawsuit was placed into a Special Needs Trust for his benefit. The Trustees were authorized to spend not less than $1,500 a month on Eirol's living expenses, but the Trust also specifically stated that the Trustees must make a good-faith effort to determine whether Medicaid would cover home health care services prior to expending trust funds for that purpose. The Trust also required the Trustees to take Eirol's eligibility for government benefits into consideration before making discretionary payments to him or his family. By 2009, less than $4,000 remained in the Trust. When the Trustee, BNY Mellon, filed a petition requesting that the Court approve its account and release it as Trustee, the Court instead opened an investigation. The independent examiner discovered that BNY Mellon had paid for $118,064.50 worth of home health care costs without making an inquiry into whether Eirol could qualify for Medicaid coverage. BNY Mellon had also paid for $56,320 worth of cab fares for Eirol's family and had made payments to the family that rendered Eirol ineligible for SSI and Medicaid. The Supreme Court of New York, Kings County, ruled that BNY Mellon must repay the Trust for $176,905.99 that it improperly distributed while it was Trustee. The Court found "it is clear that the Trustee relegated [its duties] to others, failing to make the necessary inquiries to ensure the longevity of the Trust Fund. It is clear to the Court that BNY breached its duty under the Trust agreement and failed to properly administer the Trust." Since the Trustee had discretion to remit income and/or principal, subject to benefits otherwise available, the Trustee was charged with having a duty to understand the beneficiary’s unique needs, to inquire about his resources, and the benefits available to him before making any distributions on his behalf. Such an obligation is ongoing – from the first distribution, to the last distribution. Only six months prior to that decision was the Matter of JP Morgan Chase Bank, N.A. (Marie H.), 2012 NY Slip Op 22387 decided on December 31, 2012. Another case involving a beneficiary who had special needs, another case where the Trustees had absolute discretion to remit income and/or principal on behalf of the beneficiary, and another decision in which the Trustees were held liable for breaching their fiduciary duty to know the their beneficiary. Despite language in the Trust Agreement, which was funded with over $2.7M, requiring distributions for Mark’s “care, comfort, support and maintenance,” JP Morgan failed to appreciate and provide for his needs. In this case the beneficiary, Mark, suffered from autism, “was non-verbal, and engaging in numerous repetitive and self-stimulating behaviors,” he also was “engaged in frequent aggressive behaviors including spitting, throwing objects and hitting his own head.” At the initial hearing the individual Co-Trustee testified that he had not physically seen Mark in years, had never visited Mark, nor had he inquired to see if Mark had any unmet needs. A trust officer from Chase testified that their “excuse” for inaction was out of lack of institutional capacity to ascertain or meet the needs of a severely disabled, institutionalized beneficiary. Trustees’ commissions were taken, but no distributions were made to enhance Mark’s life, no visits, no inquiries. The Court found that the Trustees had left Mark to languish for several years with inadequate care even though his Trust had ample resources. The Court ruled that the Trustees breached their duty to inquire and apply trust resources toward improving Mark’s life.    In both cases, the Trustees failed to know and appreciate the nuances of each beneficiaries’ needs and available resources. Consequently, as Trustees, they failed in discharging their duty to prudently exercise the required discretion. The duty to know the beneficiary and understand the beneficiary’s needs is escalated when a Grantor creates a supplemental needs trust; Beneficiaries of such trusts may be entitled to government benefits such as Medicaid or Social Security/Disability and an improper distribution of either income or principal may lead to disqualification from such benefits. Moreover, some beneficiaries will not be able to effectively advocate for their needs, placing the onus on the fiduciary to be proactive. Accordingly, there is a higher duty for the trustee to know the beneficiary’s unique challenges, their income potential, mobility, nutritional needs, medical challenges and housing requirements – and with a greater duty comes greater fiduciary risk. Implementing the intentions of the grantor or testator and guarding against distribution risks are not mutually exclusive goals, but  there is no bright-line test to determine as a condition precedent to making a distribution, if the trustee is sufficiently aware of all relevant considerations for every individual SNT beneficiary. While not a bright-line test, New Jersey has recently adopted the Uniform Trust Code, 3B:31-57 entitled, Duty of Prudent Administration which requires that “a trustee shall administer the trust as a prudent person would, by considering the purposes, terms, distributional requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution”. Further, 3B:31-67 entitled Discretionary Powers provides, “Notwithstanding the breadth of discretion granted to a trustee in the terms of the trust, including the use of such terms as “absolute,” “sole,” or “uncontrolled,” the trustee shall exercise a discretionary power in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries”. Thus, in an effort to prudently administer a special needs trust or discretionary trust, and to ensure that the trustee reasonably exercises its discretion in the interest of the beneficiary, a trustee should know and consider at least the following information about the beneficiary:  

1. The beneficiary’s ability to earn income and manage money.
2. Education.
3. Residential housing situation.
4. Mobility.
5. Medical history.
6. Known mental or behavioral challenges.
7. Eligibility for government-sponsored benefit programs.
8. Resources.
9. Ability to work.
10. Ability to communicate.
11. Capacity for independent living.
12. Whether any other trusts have been created for the beneficiary.
13. Legal issues.
14. Has a guardian of the person or property been appointed?
15. Does the trust include a conflict resolution process?
16. Has a power of attorney been executed?
17. Was there a personal injury claim (that led to the need for the trust?)?
18. Has the trust been reported to Medicaid?
19. Has a decision been made to forego public benefits?
20. Is there an Achieving a Better Life Experience (ABLE) Act of 2014 account?
21. Is there a distribution plan or life care plan for the beneficiary?
22. Is there a budget for care that includes a Monte Carlo simulation risk analysis?
23. Who will pay the income taxes incurred by the trust?
24. Is the trust a first-party or third-party trust agreement?
25. A list of the beneficiary’s family and friends including contact information.
26. If protocols for visits, contact or communication should be created.
27. Where is the trust sitused?
28. Who the remainder persons are and what duty is owed.
29. History of adversarial communications
30. Frequency of distribution requests

These questions are not exhaustive and are not static. Every time a trustee considers making a distribution a review of such factors is required. Incorporating a life care plan prepared by skilled social worker, psychologist, or trained coordinator will further minimize risk.. A life care plan for a beneficiary with autism, will be very different than a life care plan for a beneficiary with intellectual challenges or a beneficiary with schizophrenia. Accordingly, the plan should incorporate all the above factors, together with an assessment of the beneficiary’s, strengths and weaknesses, hobbies, travel preferences and activities of daily living. Such data will provide the trustee with the insight and guidance needed to understand the beneficiary and how to meet their needs while within the trust’s budget. A tailored life care plan often proves to be an invaluable source of information for a trustee seeking to prudently fulfill not only its legal obligation, but also to enhance the beneficiary’s life - the goal when the estate planning effort commenced.