The Generational Squeeze: a Commentary on Multi- Generational Special Needs and Benefit Planning in Georgia

• Publication year: 2022

The Generational Squeeze: A Commentary on Multi- Generational Special Needs and Benefit Planning in Georgia

Christopher Wages

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The Generational Squeeze: A Commentary on Multi-Generational Special Needs and Benefit Planning in Georgia

Christopher Wages^*

I. Introduction

As the generation of baby boomers—individuals born between 1946 and 1964—grow older, their children are being progressively squeezed between caring for aging parents and the demands of a family of their own, giving rise to the term "sandwich generation." The current population of fifty-three million baby boomers over the age of sixty-five accounts for 16% of the populace.¹ As such, younger generations are finding themselves sandwiched between the financial, emotional, and physical needs of their aging parents and young children. This challenging situation is further exacerbated for families dealing with disabilities, and this scenario is only becoming more ubiquitous. In addition to baby boomers experiencing physical and cognitive challenges precipitated by age, the prevalence of developmental and physical disabilities among children is growing. The Centers for Disease Control (CDC) and Prevention issued a report noting an increase in developmental disabilities among children under the age of seventeen since 2009.²

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Today, sixty-one million individuals, or 26% of the nation's population, have one or more disabilities.³ One in four disabled adults are also cared for at home by parents over the age of sixty.⁴ As parents lose the ability to caretake, younger generations are left to take up the mantle of caring for their disabled siblings and other family members.

This Article discusses the implications and complexities of proper planning for the long-term care of a substantial and growing percentage of individuals with physical and mental disabilities. A thorough understanding of the tenuous balance between preserving social benefits and employing special needs trusts crosses several legal disciplines, including estate planning; family law, in cases of divorce; and plaintiffs' litigation that result in disability settlements.

II. A Shift from Institutionalization to Community Support

The 1999 United States Supreme Court decision in Olmstead v. L.C.,⁵ called for the integration of individuals with disabilities into supportive communities, spurring a shift from the then-prevailing practice of segregating disabled individuals into institutional settings such as nursing homes and state hospitals.⁶ The respondents brought suit under Title II of the Americans with Disabilities Act of 1990, 42 U.S.C. § 1983⁷ and 42 U.S.C. §§ 12131-12134,⁸ for healthcare officials' refusal to relocate mentally disabled persons from an institution into a community-based treatment program.⁹ The Court held that in evaluating reasonable modifications, a court must consider available resources, including the cost of providing community-based care and the range of services provided to others with mental disabilities.¹⁰ Prior to Olmstead, half the states, including Georgia, spent less than 8% of

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Medicaid funding on home-based services for the disabled.¹¹ Over the past decade, the number of individuals with disabilities living in an institution has started to decline, reaching 2.81% in 2019.¹² The holding in Olmstead has led to increased integration of individuals with disabilities into supportive environments with live-in caregivers to help with day-to-day activities. Today, 86% of long-term care is provided in a home or by community-based services that allow adults with disabilities to live without being cut off from community, family, and friends, which habitually occurs in a nursing home or institutional setting.¹³

Personal care is the linchpin in helping disabled individuals live in the community and avoid institutionalization. Guardianships, conservatorships, and representative payees are supportive options that can help disabled adults live more independent lives outside of the institutional setting.

III. Guardianship

Legal petitions, such as guardianships or conservatorships, are intended to optimize protection for a disabled individual and should be tailored to preserve as much independence and autonomy possible. A guardianship should be "the least restrictive form of . . . assistance, taking into consideration the ward's functional limitations, personal needs, and preferences."¹⁴ Additionally, all guardianships "shall be designed to encourage the development of maximum self-reliance and independence in the adult and shall be ordered only to the extent necessitated by the adult's actual and adaptive limitations after a determination that less restrictive alternatives to the guardianship are not available or appropriate."¹⁵ While guardianships are helpful, petitioning to make an individual become declared a ward is a weighty decision:

Unless the court's order specifies that one or more of the following powers are to be retained by the ward, the appointment of a guardian shall remove from the ward the power to: (1) Contract marriage; (2)

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Make, modify, or terminate other contracts; (3) Consent to medical treatment; (4) Establish a residence or dwelling place; (5) Change domicile; (6) Revoke a revocable trust established by the ward; and (7) Bring or defend any action at law or equity, except an action relating to the guardianship.¹⁶

Options to consider before petitioning for full legal guardianship include: providing support with limited or joint bank accounts; representative payee; financial power of attorney; conservatorship; medical release forms; and advance directives for health care.¹⁷ The rights and obligations of the guardian include the right to make decisions concerning the ward's support, care, education, health, and welfare.¹⁸ The guardian at all times must "act as a fiduciary in the ward's best interest and exercise reasonable care, diligence, and prudence," as well as make reports to the probate court on a regular basis.¹⁹ While the legislature intended to grant guardians broad authority to make decisions and act on behalf of an adult ward, these powers are not without limits. Rather, the grant of powers and rights to the guardian is expressly made subject to orders of the probate court.²⁰

If a full guardianship is not required, a representative payee can receive and manage Social Security funds to pay for basic needs for the beneficiary, such as food, clothing, housing, and medical care.²¹ Leftover money must be placed in a savings account, and the representative payee must show a simple accounting of the funds.²² Parents, spouses, guardians, or friends can be a representative payee; but, unlike a guardianship, being a representative payee does not grant authority to execute binding contracts on behalf of the beneficiary.²³

Conservatorships can be helpful to individuals who struggle making financial decisions. Anyone, including the individual with the disability, can petition for the appointment of a conservator.²⁴ "The court may appoint a conservator for an adult only if the court finds the adult lacks sufficient capacity to make or communicate significant responsible

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decisions concerning the management of his or her property."²⁵ It is possible to petition for the appointment of a conservator with or without seeking a guardianship, and it is also possible for the court to appoint two different people as guardian and conservator. While most care is provided voluntarily and without pay by friends and families, 8% of disabled individuals require additional or alternative support and rely exclusively on paid assistance.²⁶ Regardless of the individual circumstances, understanding the maze of rules and qualifications for public benefits is essential in obtaining and keeping the benefits for the long-term care of disabled individuals.

IV. Tax-Free Savings Account for Individuals with Disabilities

On December 19, 2014, the Achieving a Better Life Experience (ABLE) Act²⁷ was signed into federal law.²⁸ ABLE legislation 529A is similar to 529 college savings plans. But, rather than saving for education, ABLE creates a savings account for individuals with disabilities.²⁹ The ABLE Act amends the Internal Revenue Code (IRC) to create tax-free savings accounts to alleviate the financial burdens for individuals with disabilities.³⁰ ABLE accounts allow disabled individuals the opportunity to maintain a bank account without jeopardizing eligibility for crucial federal benefits.³¹

Funds in an ABLE account may be used to pay for qualified expenses, such as medical care, housing, and transportation, among other expenses. ABLE accounts are intended to supplement, not supplant, benefits from other sources such as Medicaid and Social Security Insurance.³² Qualifying for an ABLE account requires proof of a condition that began prior to reaching age twenty-six.³³ Participants must also satisfy Title II and Title XVI of the Social Security Act Section 416(i)³⁴ , which requires proof of an "inability to engage in any substantial gainful activity by reason of any medically determinable

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physical or mental impairment which can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months."³⁵ A disability is defined as a "medically determinable physical or mental impairment or combination of impairments that causes marked and severe functional limitations, . . . or that has lasted or can be expected to last for a continuous period of not less than 12 months," or is expected to result in death; which causes the child to not participate in any substantial gainful activity.³⁶

While anyone can contribute money into an ABLE account, each disabled individual can have only one ABLE account.³⁷ If the account owner dies with funds remaining in the ABLE account, those funds must be used to pay any outstanding Qualified Disability Expense (QDE) bills, including...