By Diane Weinberg
As you may recall, our August 29, 2019 News Alert addressed a Social Security rule that would likely make it more difficult for an individual with a disability to obtain the assistance of an attorney to help that individual receive public benefits. Specifically, the rule provided that Social Security would need to pre-approve any attorneys’ fees incurred to create a trust that could cause an individual to qualify or remain qualified for Supplemental Security Income (“SSI”) benefits. Failure to follow the rule could subject the attorney to fines and possibly imprisonment. The good news is that the Social Security Administration (“SSA”) repealed this rule on September 25, 2019. The Social Security Administration did not announce that the rule was being repealed; the rule simply disappeared from its manual, the Program Operations Manual Systems (known as the “POMS”).
Although gone, I do think that the SSA may make another attempt to create disincentives for attorneys to draft special need trusts. For example, it may create rules to cap attorneys’ fees or to require that it approve attorneys’ fees for a narrowly defined group of Social Security recipients.
In the meantime, in an abundance of caution, I plan to formally advise Social Security when I am retained to drafts a self-settled special needs trust for an SSI applicant/recipient and develop my responses based on how this issue progresses. As always, we will keep you informed of any updates in this rapidly changing area.