GeriLaw | Robert Fleming, Tucson elder law attorney, and colleagues

Stimulus Payments for Seniors and Persons with Disabilities

The American Recovery and Reinvestment Act of 2009 (ARRA or Stimulus Bill) includes a one-time payment of $250 to anyone who received any kind of Social Security benefit, including retirement, survivors and disability benefits, Railroad Retirement or Veterans Administration (VA) disability compensation or pension benefits during November 2008, December 2008, or January 2009.  Most people who receive Supplemental Security Income (SSI) will also receive the one-time payment; however, persons in nursing homes who receive a monthly SSI benefit of $30 will not receive the payment.  Most payments will go out this month and all should be received by June 4, 2009.  Children receiving Social Security benefits who are under the age of 18 (or 19 if still in high school), will not be eligible for the payment; however, adult children who receive disability payment on a parent’s record will receive a payment.  Additionally, children who receive SSI will receive a payment.

Eligible recipients will receive a notice regarding the payment.  The payment will go to the recipient using the same means as the regular benefit.  For example, if the usual monthly benefit is directly deposited to a bank account, the one-time payment will also be directly deposited.  If the usual payment arrives by mail, the extra payment will be mailed as well.

If a person is in a nursing home, and the usual monthly benefit is sent to the nursing home, then the one-time payment will be sent to the nursing home as well.  According to ARRA, the nursing home must set aside the $250 payment for the nursing home resident to use as the resident sees fit.  The law specifically states that “The entire payment shall be used only for the benefit of the individual who is entitled to the payment.”   The nursing home is not permitted to keep the funds and apply them toward the resident’s nursing home costs.  The Centers for Medicare and Medicaid Services (CMS) has advised nursing home surveyors about the one-time payment and residents’ rights to the payment.

The one-time payment will not count as income for federal, state or local benefits.  The amount is also excluded as a resource in the month in which it is received, and for the following nine months without being taken into account for purposes of determining eligibility for Medicaid.  If the funds are not spent by the end of the ten month period, then the remaining funds will be counted as a resource.  The payment will not count as earnings for Social Security disability benefits. Additionally, the payment also will not count as gross income for income tax purposes.

If an eligible Social Security recipient does not receive the one-time payment by June 4, 2009, then the recipient can phone the Social Security toll-free number at 1-800-772-1213.  A word of warning to eligible recipients: If anyone phones or e-mails you asking for personal information to process your payment, do not provide the caller with this information.  If you are unsure about the identity of someone claiming to be a representative of the Social Security Administration, then phone 1-800-772-1213 to verify the call.  You may report suspicious activity involving Social Security programs and operations to the Social Security Fraud Hotline at www.socialsecurity.gov.oig/hotline, or call 1-800-269-0271.

To find out more about the one-time payment, you can contact the following agencies:

For Social Security or SSI recipients, visit www.socialsecurity.gov.

For Railroad Retirement recipients, visit the Railroad Retirement Board (RRB) at www.rrb.gov or call 1-877-772-5772.  You will receive your one-time payment from RRB; you do not have to do anything in order to receive your payment.

For VA benefit recipients, visit www.va.gov or contact your local VA facility for more information.  You will receive your payment from the VA, and you do not have to do anything in order to receive your payment.

Andrew H. Hook
Oast & Hook.
www.oasthook.com

Powers of Attorney and Fiduciary Duty

A recent Faquier County, Virginia, Circuit Court case illustrates the need for specific provisions in durable powers of attorney.

In Mountjoy v. Smith (Case No. CL8-300, February 26, 2009), the matter came before the court upon cross-motions for summary judgment.  Mr. Smith’s executrix alleged that his wife, Evelyn Smith (now deceased), breached the fiduciary duty owed Mr. Smith under a power of attorney executed by Mr. Smith.  The court issued an opinion in which it addressed the threshold question of the validity of the durable power of attorney (DPOA).

Mr. & Mrs. Smith were married in 1946 and remained married until their deaths.  In May, 2006, Mr. Smith executed a DPOA naming Mrs. Smith as his agent.  The DPOA did not include specific authority for the agent to create a trust, although the DPOA did have several paragraphs granting other specific powers.  The DPOA also included two paragraphs with general grants of authority.  Mr. Smith never directed Mrs. Smith to make an estate plan for him; however, Mrs. Smith arranged for two separate trust documents to be prepared, one for her, and one for Mr. Smith.  Mrs. Smith executed both trust documents without her husband’s knowledge.  The trusts were not mirror images of each other; the estate plan included transferring real properties into the trusts, changing the ownership of the properties from tenants by the entireties into tenants in common.  Mr. Smith was unaware of these actions until two months after Mrs. Smith’s death; he then executed a document revoking the trust in his name that Mrs. Smith had established.  Mr. Smith, through counsel, made a demand for alleged entitlements existing through Mrs. Smith’s trust.

The court’s analysis focused on the lack of specific authority in the DPOA for Mrs. Smith to set up an estate plan for Mr. Smith.  Mrs. Smith’s estate argued that the specific powers in the DPOA to negotiate sums of money and enter into contracts, along with the DPOA’s general grants of authority, were sufficient authority for Mrs. Smith’s actions.  The court stated that “The law in Virginia is that a power of attorney will be strictly construed” (citing Bank of Marion v. Spence, 155 Va. 51, 53 (1930) and Horchkiss v. Middlekauf, 96 Va. 649 (1899).)  Mrs. Smith’s executrix suggested that the Commonwealth has softened its stance on this issue in Jones v. Brandt Executrix, 274 Va. 131 (2007).  The court stated that Brandt differed from the case at hand because Mrs. Smith created a trust in which she named herself as beneficiary of the trust if Mr. Smith died first, then changed the form of ownership of properties transferred into the trust.  Mr. Smith was not the beneficiary of the trust she created for herself, if Mrs. Smith died first.  Further, Mrs. Smith concealed her actions from Mr. Smith.  She could have sought her husband’s approval for her actions, but did not.  The court also found that Mr. Smith did not ratify Mrs. Smith’s actions; on the contrary, he terminated the trust Mrs. Smith created for him as soon as he learned of the trust.  The court also found that Mr. Smith’s attempt to protect his property rights by demanding alleged entitlements from Mrs. Smith’s trust did not serve as ratification of her actions.  The court held that Mr. Smith’s trust was void; this also invalidated the conveyance of the real properties to both trusts.

Andrew Hook
Oast & Hook
www.oasthook.com