NEW SUPPLEMENTAL NEEDS DECISIONThis is the first known published decision setting forth the extent of Medicaid’s remainder interest in supplemental needs trusts.   Upon reading the decision, one will note the importance of the decision to case settlement.   Ruben N., Appellate Division, New York State, Second Department, September 16, 2008.

Please note that after Ruben XX was decided, there was another matter in the Court of Appeals, namely Matter of Abraham XX., No. 165, COURT OF APPEALS OF NEW YORK, 2008 NY Slip Op 9005; 11 N.Y.3d 429; 2008 N.Y. LEXIS 3388, November 20, 2008, Decided.

The Court of Appeals ruled, on the facts in Abraham XX, that Medicaid is entitled to "lifetime" Medicaid. On the surface, Abraham XX appears to ultimately over-rule the Ruben XX decision, referred to below. The facts in Abraham XX was Medicaid seeking to recover "causally related" Medicaid, whereas in Ruben XX, Medicaid attempted to recover Medicaid not related to the medical malpractice action and incurred prior to the creation of the supplemental needs trust. Ruben XX remains litigated with Medicaid seeking to have the Appellate Division reverse its decision. Abraham XX may be brought before the U.S. Supreme Court. Notwithstanding Abraham XX, the issues in the article below remain critical in considering supplemental needs trusts.


SSA and CMS Letters Re: Assignment of Payments to a
  Supplemental Needs Trust:

  SSA 2003 Letter: Structures and SNTs

SSA 2006 Letter: Structures and SNTs

March 13, 2006 CMS Letter

This is among the letters of analysis sent to SSI and CMS setting forth the legal basis for which a structured settlement annuity can be paid into a special needs trust.

Analysis of SSI/CMS
This is a legal analysis of the SSI and CMS letters written to Jay J. Sangerman and addressing certain issues which may arise in the future.

These letters to and from SSI, CMS and Jay J. Sangerman, dated 2003 and 2006,  are iin reference to our requests for assurance that periodic payments irrevocably assigned to special needs trusts do not create any attribution of income to an SSI and/or Medicaid recipient and that such payments may be made to a special needs trust as of age 65.

The cause for the need for assurance was that certain attorneys and Medicaid districts were claiming that periodic payments, even though irrevocably assigned to an SNT, create SSI/Medicaid eligibility problems.

Significantly, these letters demonstrate the need for care in the drafting of SNTs, orders creating the SNTs and settlement agreements.  If the foregoing documents are improperly drafted, then there could be Medicaid and/or SSI eligibility problems.

As is demonstrated in the letters to SSI and CMS, there was no need for a change in the law or regulations, merely a clarification due to the misconstruction of the Medicaid and Supplemental Security rules pertaining to special needs trusts.

Transfer of Payee in Structured Settlement
IRS statement that the payee of a structured settlement which is transferred without consideration will not effect the favorable income tax treatment under IRC 104(a)(2),   This technique, as explained in this attachment, if the life company is willing to issue such annuity, can be useful in settlement negotiations and estate tax planning.

New York State trial court anti-factoring decision.
New York State Court rules that structured settlement cannot be factored due to “no-assignment” provision in the settlement contract.

A Cautionary Note Pertaining to Retention of Supplemental Security Benefits
In the drafting of settlement agreements and court orders, as well as in the administration of special needs trusts, it is necessary to consider the SSI rules so that the payments are not considered available income or available resources to the beneficiary. 

SSI and Supplemental Needs Trusts.

Supplemental Needs Trusts and SSI POMs.

Special Needs Trusts as a useful tool in the settlement of cases.
This is a detailed outline for professionals.

Services  Provided by Jay J. Sangerman, PLLC

Medicare Set-Aside Trusts

Supplemental Needs Trust for Tort Claims

Supplemental Needs Trusts for the Settlement of Tort Claims, Estate Planning and Protection of Inheritances

Cano and Drafting of the Supplemental Needs Trusts:  July 12, 2004 Decision by the Hon. Bertram Katz

Supplemental Needs Trusts:  The Second Decade.  NYLJ, July 24, 2004.

Supplemental Needs Trusts:  A Trap for the Unwarry Plaintiff Attorney

Placement of Tort Awards

Structured Settlement Issues

Social Security Information and Personal Injury Settlements

Negotiating and Settling the Medicaid Lien

First Party Supplemental Needs Trusts - An Article from the New York Law Journal

Current Developments In Special Needs Trusts

Structuring of Attorney Fees

Medicaid Liens and Recoveries.  Do Liens Need to be Settled Prior to the Establishment of the Supplemental Needs

Medicaid Liens:  When, and under what circumstances, do they need to be repaid?
The attached outline explains the rules and procedures for considering the effect of Medicaid liens.

Attorney's liability to reimburse Medicare for payments made on client's behalf

See Resources for Personal Injury Attorneys.

Jay J. Sangerman, PLLC is not associated with “Special Needs Alliance.”

Jay J. Sangerman, PLLC
60 East 42nd Street - Suite 2218
New York, New York 10165
Telephone (212) 922-0711
Facsimile (212) 922-0709

4115 NW 60th Circle
Boca Raton, Florida  33496

Jay J. Sangerman & Associates
Lanidex Executive Center
100 Misty Lane
Parsippany, New Jersey 07054
(973) 739-9055