Court Directs Son and His Family to Vacate Mother's Home, Allowing Home to be Sold to Pay for Mother's Care Needs

The plaintiff, Marjorie Fister, is the mother of defendant Kevin Edward Fister. In 2010, the defendant, along with his wife and four adult children, moved into plaintiff's home with her. Mrs. Fister's health declined and, in 2012, she moved into her daughter's New York home. However, the defendant and his family remained in Mrs. Fister's home. Defendant refused a request from his mother, through her attorney, to leave her home so that it could be sold to provide funds for her care at an assisted living facility. He and his family remained in Mrs. Fister's home, residing rent-free.

Therefore, Mrs. Fister filed a complaint for a writ of possession against the defendant and his family. In response, the defendant filed a Chancery Division action claiming that his mother was incapacitated and unable to manage her affairs. In April 2013, the Chancery Division determined that Mrs. Fister was competent, and the defendant's complaint was dismissed. Mrs. Fister filed a motion for summary judgment in February 2014, seeking to eject the defendant and his family from her home.

In the meantime, the defendant also filed a New York complaint for guardianship. That action was successful and, in December 2014, the New York court declared Mrs. Fister incapacitated and appointed Paul Mederos, Esq. as her guardian.

In March 2015, the New Jersey trial court held oral argument on the plaintiff's pending summary judgment motion. During oral argument, the defendant's attorney acknowledged that the defendant had no evidence to document that he had an ownership interest in his mother's home. Mrs. Fister's guardian was present at oral argument, and he advised the court that he had already applied to the New York court for permission to sell Mrs. Fister's home to pay for her care. The New Jersey trial court granted summary judgment to the plaintiff and signed a writ of possession, concluding that the defendant had no ownership interest and no right to continue to live there rent-free. The defendant appealed that decision.

In April 2015, the New York court granted the guardian's request to sell Mrs. Fister's home.

Oral argument on the writ of possession order was held before the New Jersey Superior Court, Appellate Division. At oral argument, the defendant's counsel advised the court that the defendant and his family had vacated Mrs. Fister's home in response to the writ of possession, and conceded to the court that the defendant's appeal was now moot.

The appellate court agreed, and dismissed the appeal.

A copy of Fister v. Fister  can be found here – Fister v. Fister

For additional information concerning nursing home law and litigation, visit: http://vanarellilaw.com/nursing-home-law-litigation/

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Donald D. Vanarelli, Esq. to Present at the Elder & Disability Law Section Roundtable Discussion on Medicaid Appeals

Westfield, NJ – October 6, 2016 - Donald D. Vanarelli, Esq. (http://VanarelliLaw.com/) will participate in the New Jersey State Bar Association's Elder & Disability Law Section Roundtable Discussion on Medicaid Appeals to be held on October 13, 2016 at the New Jersey Law Center in New Brunswick, NJ.

Mr. Vanarelli will present on “Appealing a Final Agency Decision to the Superior Court, Appellate Division,” an overview of the current laws governing the Medicaid appeals process in the administrative forum and state court.

For additional information regarding elder law issues, including Medicaid applications and appeals, contact the Law Office of Donald D. Vanarelli at 908-232-7400, or visit them online at http://VanarelliLaw.com/.

Information about the New Jersey State Bar Association's Elder & Disability Law Section Roundtable Discussion on Medicaid Appeals can be found below:  

New Jersey State Bar Association Elder & Disability Law Section Roundtable Discussion

Medicaid Appeals Thursday, October 13 ∙ 9-11 a.m. New Jersey Law Center, New Brunswick 2.4 CLE credits $29 per person (with CLE credits); $6 per person (without CLE credits)

About the Program

Learn where to file a Medicaid appeal, in state or federal court, when a Medicaid application is denied. Roundtable Coordinator Benjamin J. Menasha Pisciotta & Menasha, LLC Speakers John W. Callinan Law Office of John W. Callinan Daniel J. Jurkovic Law Office of Daniel J. Jurkovic Donald D. Vanarelli Law Office of Donald D. Vanarelli Jane Fearn-Zimmer The Rothkoff Law Group Download the registration form and fax to 732-249-2414, or login to register online. To register by phone, call Member Services 732-249-5000.

For additional information concerning Medicaid applications and appeals, visit: http://vanarellilaw.com/medicaid-applications-medicaid-appeals/

For additional information concerning Medicaid and public benefits planning, visit: http://vanarellilaw.com/medicaid-public-benefits-planning/

The post Donald D. Vanarelli, Esq. to Present at the Elder & Disability Law Section Roundtable Discussion on Medicaid Appeals appeared first on Elder Law Attorney NJ | 07090 | 908-232-7400 | NJ Estate Planning Lawyer | The Law Office of Donald D. Vanarelli.

New Jersey's State Estate Tax To Be Eliminated

New Jersey lawmakers reached an agreement on Friday, September 30^th which, among other things, will phase out New Jersey's state estate tax. The New Jersey estate tax exemption, presently $675,000, will increase to $2 million after January 1, 2017. The estate tax will then be eliminated after January 1, 2018. An official vote on an estate tax phase-out bill is scheduled in the New Jersey legislature for Wednesday, October 5, 2016, and the bill is expected to pass.

In New Jersey, the state's estate tax is levied on any estate valued at more than $675,000.  The $675,000 exempt amount is the lowest estate tax threshold in the nation. The state's estate tax is a tax assessed against the gross value of the estate, and it takes into consideration the value of real estate, businesses, stocks and bonds, savings and checking accounts, motor vehicles, boats - all assets owned by a New Jersey resident at time of death. The federal government also imposes an estate tax that is distinct from New Jersey's estate tax.  However, the threshold for the federal estate tax is much higher than New Jersey's threshold. The 2016 exemption for the federal estate tax is $5.45 million.

New Jersey has two, distinct death taxes-a state estate tax and an inheritance tax. The inheritance tax is imposed on estates worth more than $25,000, but affects only certain heirs. Close relatives, such as the surviving spouse, parents, children and grandchildren, are entirely exempt from the inheritance tax. Thus, close relatives do not pay any state inheritance tax, regardless of the size of the inheritance. Other relatives (such as siblings and their spouses or nieces and nephews) are taxed on inheritances over $25,000. The tax rate starts at 11% and rises to 16%, depending upon the amount inherited. Charities are taxed at a rate of 15% for the first $700,000 and 16% for amounts over that. The New Jersey inheritance tax remains, and has not been eliminated under the recent agreement.

The phase out of the NJ estate tax is part of a larger bill to replenish the state's Transportation Trust Fund. The bill will increase the tax on gasoline to 23 cents per gallon while lowering the sales tax from 7% to 6.875% in 2017 and to 6.625% in 2018. Other items in the bill provide assistance to retirees, veterans and the working poor.

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Summary Judgment Reversed: Claim That Lifetime Transfers Were Made To Avoid Decedent's Obligations To Daughter Under Divorce Agreement Can Proceed

When he died in 2012, the decedent, retired physician Henry D. Rubenstein, left his insolvent estate to his second wife and her nephew. Although he and his second wife had a son, his will explicitly left no bequest to that son. The second wife claimed that the decedent's extensive health problems had depleted the estate to the point of insolvency; the decedent's first wife and family disputed this claim.

When the decedent and his first wife had divorced in the 1970s, they had entered into a property settlement agreement (“PSA”) obligating the decedent to leave bequests to their two children in an amount equal to any bequest he left for any of his subsequent children, or, if he had no subsequent children, an amount equal to one-eighth of his gross estate. The PSA also obligated him to maintain $100,000 in life insurance for his first wife.

At his death, neither his first wife nor their children received anything from the estate. Because he had disinherited the child from his second marriage, his children from the first marriage received nothing pursuant to the PSA; moreover, the life insurance policy he was to have maintained for his first wife did not exist at the time of his death.

The decedent's first wife and their children sued the estate and the decedent's second wife and son. They claimed breach of the PSA, intentional interference with contract, and violations of the Uniform Fraudulent Transfer Act (“UFTA”). They alleged that the decedent had disinherited the child of his second marriage in order to avoid a bequest to them; and that he intentionally depleted his estate through lifetime transfers to his second wife and their son. The children of the first marriage also alleged that, when the decedent's father had died over 20 years before, he had left $15,000 to each of them, but the decedent withheld that information, and the bequests, from them.

After discovery ended, the defendants moved for summary judgment; the plaintiffs cross-moved to extend discovery.

The trial judge granted the defendants' motion for summary judgment, with the exception of the claim regarding the $100,000 life insurance. In an oral decision, the trial court ruled that there was no “paper trial or any solid evidence” of lifetime transfers and that it “may be that there were, but there's no evidence presented to the Court for any.” The trial court also refused to extend discovery.

One of the daughters from the first marriage appealed. Despite the defendants' claim that she was barred from doing so based on procedural errors, the appeals court found that, because the plaintiff was not represented by counsel and the procedural history was “nuanced,” her appeal would be heard in the interests of justice.

Turning to the merits, the appellate court concluded that it was not clear from the record and the trial court's “abbreviated oral ruling” that there were no genuine issues of material fact. Although the motion judge had stated that he did not see “any kind of paper trail or solid evidence” of lifetime transfers, he also acknowledged that “maybe” such transfers had occurred. Plaintiff's appellate appendices included many documents that allegedly reflected lifetime transfers and the decedent's intent to evade the PSA. Plaintiff also attached a letter from the decedent to his estate planning attorney that stated that disinheriting the son of his second marriage “will eliminate any problems with reference to my divorce settlement.” Plaintiff asserted that this evidence created an issue of material fact as to whether lifetime transfers were done to deprive her of her rights under the PSA. The appellate court noted that the trial judge had not commented on these documents, or on deposition testimony of the decedent's estate planning attorney, in his oral ruling on the motion. Because the appeals court could not determine, from the oral opinion, whether the judge had considered this evidence, it reversed summary judgment and remanded these issues to the trial court.

The appellate court also rejected the defendants' claim that the alleged improper transfers should be rejected because the UFTA only applies to commercial transactions. The court ruled that, although commercial transactions were the “primary focus” of the UFTA, the Act is not limited to commercial transactions.

With respect to the plaintiff's claim regarding the $15,000 alleged bequest from her paternal grandfather, the appellate court found that the trial court failed to address the claim, and the record and briefs were inadequate to resolve the issue; consequently, that claim was also remanded.

Finally, because the trial court did not address the standard for extending the time to take discovery, plaintiff's application to extend the discovery period was also remanded.

A copy of Rubenstein v. Estate of Rubenstein can be found here –  Rubenstein v. Estate of Rubenstein

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Father's Transfer To Son's Business Was An Investment, Not A Gift; Therefore, The Father's Estate Has An Ownership Interest In The Business

The decedent, Byung-Tae Oh, was a citizen and resident of the Republic of Korea. His youngest son, Hyung Kee Oh, owned B & H Consulting, a New Jersey limited liability company. Before his death, the decedent had transferred $900,000 into B & H's bank account.

Following the decedent's death, his oldest son, Won Ki Oh (the plaintiff), a resident of Korea, filed a complaint in the New Jersey Superior Court, Probate Part, seeking to be appointed administrator of the estate for purposes of marshalling the decedent's New Jersey assets. The plaintiff alleged that the $900,000 transfer to B & H was an investment and that, as a result, the decedent was part owner of the business.

The decedent's younger son (the defendant) moved to dismiss the New Jersey action, claiming that the $900,000 was “start-up money” for the business, but was not an investment, because the decedent had not treated that payment as entitling him to a legal ownership of the business. Therefore, according to the defendant, the transfer was a gift, and the decedent's estate did not have an ownership interest in the business.

The parties filed cross-motions for summary judgment. After the chancery judge ruled in favor of the plaintiff, the defendant appealed.

The defendant's first argument on appeal was that the New Jersey courts lacked jurisdiction over the case. The appeals court noted that ancillary jurisdiction would only exist if the New Jersey property was owned by an intestate nonresident, but whether the decedent owned the property was the primary dispute between the parties. The appellate court found that this was a “classic chicken-and-egg problem”: to determine whether there was ancillary jurisdiction, the chancery judge had been required to resolve the merits of the dispute–whether the $900,000 transfer gave the decedent an ownership interest in the property. The court concluded that, by determining that the transfer was an investment and not a gift, the chancery court implicitly, and correctly, concluded that it possessed jurisdiction.

The defendant's next argument was that the court had erred in applying New Jersey law, rather than the law of Korea. However, because he had failed to raise the issue before the chancery court, and because he had made no showing that Korean law would compel a different result, that argument was rejected.

Next, the defendant argued that, because the transfer was from the decedent to his son, the chancery court should have applied a presumption that the transfer was a gift. However, the Appellate Division recognized that the burden of proving an inter vivos gift rests on the alleged recipient, and the recipient must generally show by “clear, cogent and persuasive” evidence that the donor intended to make the gift. Moreover, when the claim of a gift is first asserted following the death of the alleged donor, “clear and convincing” proof is required. The appellate court acknowledged that, where a transfer is made from a parent to a child, the initial presumption is that the transfer is a gift. However, in this case, the transfer was made to the business, not to the defendant. Therefore, no such presumption attached.

The appeals court found that the defendant failed to present evidence sufficient to prove an intent to make a gift: although he made self-serving claims regarding discussions with his father, the plaintiff provided proof that the father had reported the $900,000 transfer as an overseas investment to the Export-Import Bank of Korea. The appellate court concluded that the proof presented was so one-sided that summary judgment against the defendant was appropriate.

Finally, the defendant claimed that the authority granted to the plaintiff/administrator over the New Jersey business was excessive. The defendant failed to raise this issue until he moved for a stay pending the appeal and, although the chancery judge had not barred the defendant from making a motion to modify the order, the defendant failed to do so. Thus, the appellate court determined that the chancery court had not been given the opportunity to reconsider the scope of authority, so the appeals court found the grounds for appeal to be premature.

A copy of In re Estate of Oh can be found here – Estate of Byung-Tae Oh

For additional information concerning estate planning and administration, visit: http://vanarellilaw.com/estate-planning-administration/

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Wife's Death, After Executing Property Settlement Agreement But Before Final Divorce, Constitutes Waiver of Husband's Right To Inherit

A few months prior to her death, Basabadatta Pattanayak and her husband Sandeep Srinath executed a Marital Settlement Agreement. The Agreement included a section entitled “Equitable Distribution,” in which they divided their property and relinquished spousal support, and agreed that the husband would pay health insurance until the dissolution of the marriage. When the Agreement was signed, the parties had been living separate and apart for two years, but at the time of the wife's death, there had been no divorce hearing or judgment of divorce.

The wife died intestate on September 1, 2014. The Hudson County Surrogate granted letters of administration of her estate to the husband; the decedent's parents then filed an Order to Show Cause seeking his removal and seeking an order directing him to file an accounting. Following oral argument, the chancery judge ruled in favor of the decedents' parents: she removed the husband as administrator of the estate, ordered him to file an accounting, and ordered that he was not entitled to inherit under the estate as a “surviving spouse.”

The New Jersey statutes provide as follows:

N.J.S.A. 3B:8-10. Waiving right to an elective share

The rights… of the surviving spouse… may be waived, wholly or partially, before or after marriage… by a written contract, agreement or waiver, signed by the party waiving after fair disclosure. Unless it provides to the contrary, a waiver of “all rights” (or equivalent language) in the property or estate of a present or prospective spouse… or a complete property settlement entered into after or in anticipation of separation, [or] divorce … is a waiver of all rights to an elective share… and a renunciation …  of all benefits which would otherwise pass to him from the other by intestate succession….

The judge found that, pursuant to N.J.S.A. 3B:8-10, the Agreement was a complete property settlement in anticipation of divorce, thus precluding the husband from inheriting.

On appeal, the husband argued that the Agreement could not constitute a waiver of his right to inherit because there had been no hearing, so a genuine issue of fact existed as to whether his waiver was knowing and voluntary.  The Appellate Division disagreed. The appellate court concluded that, pursuant to N.J.S.A. 3B:8-10, the parties did not have to make an explicit waiver of intestacy rights under the Agreement because the Agreement demonstrated the parties' intent to resolve all issues arising out of their marital relationship.

The husband also argued on appeal that the parties had never intended to separate and divorce, and that the term “equitable distribution” had never been explained to them. Again, his argument was rejected, with the record demonstrating that the parties had lived separate and apart for two years before they entered into the Agreement; moreover, the language of the Agreement established that they had entered into it following separation and in anticipation of divorce. Finally, the Agreement established that they had intended to make a final division of their property, and did not contemplate returning property to each other following either's death.

The Appellate Division affirmed the lower court ruling in favor of the parents, finding no genuine issue of fact that would require a hearing.

A copy of In re Estate of Pattanayak  can be found here.

For additional information concerning New Jersey divorce law, visit: http://vanarellilaw.com/family-law-services/#sdpnj

For additional information concerning probate litigation and will contests, visit: http://vanarellilaw.com/will-contests-probate-litigation-elder-abuse-actions/#iplwc

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Does a Section 529 Educational Savings Plan Account Impact a Minor Receiving SSI Benefits?

Question: Does a Section 529 educational savings plan account impact the eligibility of a minor receiving Supplemental Security Income (SSI) benefits?  Are there any regulations governing such plans?

Answer: Qualified Tuition Programs (QTPs), also referred to as Section 529 educational savings plans, allow individuals to contribute to an account established to pay a designated beneficiary's education expenses beyond high school at an eligible educational institution. Funds in a Section 529 plan are considered to be countable resources to the individual who owns the account (e.g. a parent or grandparent). Normally, the owner is the person who established the account. In most instances, the individual who establishes a Section 529 plan account retains the ability to withdraw any or all of the funds in the account for his or her own benefit. The designated beneficiary (i.e. the student or future student) is not the owner of the account and does not have any rights to the funds in the account. Therefore, funds in a Section 529 plan account do not impact the eligibility of a minor receiving SSI benefits since the minor is not the owner of the funds in the account.

Regulations governing the ways in which Section 529 Plans impact SSI eligibility are set forth in Section SI 01140.150 of Social Security's Program Operations Manual System (POMS) as follows:

A. What is a Qualified Tuition Program?

Qualified Tuition Programs (QTPs), also referred to as Section 529 Plans, allow individuals to prepay or contribute to an account established for paying a designated beneficiary's education expenses beyond high school at an eligible educational institution. QTPs can be established and maintained by states, agencies, instrumentalities of states, and eligible educational institutions. Individuals may contribute to a QTP regardless of the amount of their income.

B. Types of QTPs

There are two types of QTPs (529 Plans): savings plans and pre-paid plans.

1. Savings plans

• They are accounts that provide investment options such as mutual funds or money market funds (similar to a retirement account (e.g. 401K)).


• They are not guaranteed by the State and the value is subject to fluctuations in financial markets (e.g. the stock market).


• They can be established for a beneficiary of any age.

2. Prepaid plans

• They allow individuals to purchase units or credits at participating colleges and universities for tuition.


• They allow individuals to lock-in future tuition rates at current prices.


• States may guarantee investments in plans that they sponsor.


• Most plans must be established for a beneficiary by a certain age or grade.

C. Definitions

1. Account Owner

An account owner, also referred to as a donor, is the individual who has ownership of the account and directs use of the funds. Most plans allow the account owner to reclaim the funds deposited into a QTP at any time.

2. Designated beneficiary

A designated beneficiary is the individual (i.e. a student or future student) who is to receive the benefit of the funds in the account. The designated beneficiary can be changed to a member of the beneficiary's family.

3. Members of the beneficiary's family

The beneficiary's family includes the beneficiary's spouse and the following other relatives of the beneficiary:

1. son, daughter, stepchild, foster child, adopted child, or a descendant of any of them;


2. brother, sister, stepbrother, or stepsister;


3. father, mother, or ancestor of either;


4. stepfather or stepmother;


5. son or daughter of a brother or sister;


6. brother or sister of father or mother;


7. son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law;


8. the spouse of any individual listed above; or


9. first cousin.

4. Eligible educational institution

An eligible educational institution is any college, university, vocational school, or post-secondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education. It includes virtually all accredited public, non-profit, and proprietary (i.e. privately owned profit making) post-secondary institutions. It also includes certain educational institutions located outside the U.S.

5. Withdrawals or distributions

Withdrawals or distributions are the issuance of funds from the account. Distributions are payable to an eligible educational institution, the QTP account owner, the designated beneficiary or the estate of the beneficiary, as directed by the account owner. The account owner determines when distributions are made from the account and for what purpose.

6. Gift

Distributions from a QTP meet the definition of a gift provided:

• They are not repayment for goods or services provided by the designated beneficiary;


• They are not given because of a legal obligation on the donor's part; and


• They are given irrevocably (i.e. the donor relinquishes all control). For additional information on gifts, see SI 00830.520.

7. Rollover contribution

A rollover contribution is any amount “rolled over” or transferred to another QTP for the benefit of the same beneficiary or a member of the beneficiary's family.

8. Educational expenses

Educational expenses are tuition, fees, and other necessary educational expenses at any educational institution. Examples of educational expenses include:

1. tuition and fees;


2. books;


3. laboratory fees;


4. student activity fees;


5. transportation;


6. stationary supplies;


7. technology fees; and


8. impairment-related expenses necessary to attend school or perform schoolwork (e.g. special prosthetic devices necessary to operate school machines or equipment).

NOTE: Educational expenses do not include the cost of food and shelter.

D. QTP as a countable resource

Funds in a Qualified Tuition Program (QTP), also referred to as a Section 529 Plan, are a countable resource to the individual who owns the account (e.g. a parent or grandparent). Normally, the owner is the person who established the account. In most instances, the individual who establishes a QTP retains the ability to withdraw any or all of the funds in the account for his or her own benefit.

NOTE: In most cases, the designated beneficiary (i.e. the student or future student) is not the owner of the account and does not have any rights to the funds in the account.

EXAMPLE: A disabled child is the designated beneficiary of a QTP that was established by the child's father who lives in the household. The field office (FO) determines that the father is the owner of the QTP and it is a countable resource to him. In determining eligibility for Supplemental Security Income (SSI) of the child, the FO deems the child's resources to include the resources of the father, including the QTP, to the extent that the father's resources exceed the applicable resource limit.

See Details

• SI 01330.001, Deeming of Resources – General


• SI 01330.200, Deeming of Resources- Parent-to-Child Deeming

1. Value of a QTP

The value of the QTP is the current market value minus any applicable penalties, but not minus taxes. In addition, any maintenance fees associated with the account, whether scheduled or collected, do not reduce its value.

2. Dividends and interest earned on a QTP

Dividends and interest are returns on capital investments such as stocks, bonds, or savings accounts. Exclude dividends and interest earned on QTPs from income.

3. Rule for withdrawals or distributions from a QTP

Withdrawals or distributions to the account owner are not income but a conversion of a resource (i.e. the resource in a different form). The distribution is a countable resource to the account owner.

Assume that any distribution the designated beneficiary receives from a QTP is a gift, unless there is evidence to the contrary (e.g. there is an allegation that the distribution must be repaid). Distributions, which meet the definition of a gift and are used for educational expenses of the designated beneficiary, are excluded as income in the month of receipt.

If an excluded distribution is retained into the month following the month of receipt, it is an excluded resource of the designated beneficiary for 9 months beginning with the month after the month of receipt. For information on educational gifts, see SI 00830.455 and SI 01130.455.

If the designated beneficiary spends any portion of a QTP distribution for a purpose other than his or her educational expenses or no longer intends to use the funds for his or her educational expenses, the funds are income at the earlier of two points:

• in the month the funds are spent; or


• in the month the individual no longer intends to use the funds for educational expenses.

If a countable distribution is retained into the month following the month of receipt, it is a countable resource.

4. Examples of QTP distributions

EXAMPLE 1: Distributions excluded as income and resources

A disabled adult, age 19, is the designated beneficiary of a QTP. On January 10, the disabled adult receives $3,000 from the QTP. The disabled adult spends $2,800 for tuition and fees in January. As of February 1, $200 of the distribution remains. The disabled adult tells the field office (FO) that he will use the rest of the money for future educational expenses.

The FO determines:

• The disabled adult is not the owner of the QTP; therefore, it is not a resource to the individual.


• The distribution meets the definition of a gift for educational purposes and is excluded from income in the month of January.


• The remaining amount of $200 is excluded from resources for the months of February through October. As of November 1, any portion that remains is a countable resource of the disabled adult.

EXAMPLE 2: Distributions counted as income and resources

A disabled adult, age 21, is the designated beneficiary of a QTP. On August 5, the disabled adult receives $1,500 from the QTP. During the month of August, the individual spends $1,350 on books. The individual spends $75 on groceries in August and saves $75. The disabled adult tells the FO that she intends to add the rest of the money to her “emergency fund” that she has set aside for non-educational expenses.

The FO determines:

• The disabled adult is not the owner of the QTP; therefore, it is not a resource to the individual.


• That $1,350 of the distribution meets the definition of a gift for educational purposes and is excluded from income in the month of August.


• That $150 of the distribution is countable income to the individual for the month of August because the disabled adult spent $75 on non-educational expenses and intends to use $75 for non-educational expenses. As of September 1, any portion of the $75 that remains is a countable resource of the disabled adult.

5. Rollover or transfer of QTP funds

Funds in a QTP may be transferred or “rolled over” to a member of the beneficiary's family. A transfer or “roll over” of QTP funds from a beneficiary to a family member does not necessarily indicate a transfer of account ownership. When there is a valid transfer, the original account owner no longer owns the property.

See Details

• SI 01140.150C.3., Member of the beneficiary's family


• SI 01150.001, What is a resource transfer

EXAMPLE 1

A disabled child lives in the household with an ineligible parent and ineligible child. On April 10, the ineligible parent establishes a QTP that is designated for the disabled child. The FO determines that the ineligible parent is the owner of the QTP and it is a countable resource to the parent as of May 1. In determining eligibility for SSI of the disabled child, the FO deems the child's resources to include the resources of the ineligible parent, including the QTP, to the extent that the parent's resources exceed the applicable resource limit.

On January 3 of the following year, the ineligible parent “rolls over” the funds to the ineligible child because the funds are no longer foreseen as necessary to pay the college education expenses of the disabled child. The FO determines that, although the parent “rolled over” the funds to a member of the beneficiary's family, the parent retains ownership of the funds (i.e., a valid transfer of ownership did not occur). The funds remain a countable resource to the ineligible parent.

EXAMPLE 2

An eligible individual lives in the household with an ineligible spouse and ineligible child. On January 6, the ineligible spouse establishes a QTP that is designated for the ineligible child. The FO determines that the ineligible spouse is the owner of the QTP and it is a countable resource as of February 1. In determining eligibility for SSI of the eligible individual, the FO determines the total countable resources are the combination of the resources of the eligible individual and the ineligible spouse after all applicable exclusions are applied.

On June 6, the ineligible spouse transfers ownership of the funds to the child's grandfather. The FO determines that a valid transfer occurred. As of July 1, the QTP is not a countable resource to the ineligible spouse; however, the FO must determine whether the ineligible spouse received fair market value (FMV) for the QTP. If not, a period of SSI ineligibility may exist for the eligible individual.

POMS Section SI 01140.150 can be accessed here – Section SI 01140.150

For additional information concerning NJ elder law and special needs planning visit: http://vanarellilaw.com/legal-services/

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