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Wilke Fleury Sponsors DSIA Fundraiser

Continuing its long tradition of community involvement and support, Wilke Fleury is sponsoring the Down Syndrome Information Alliance’s 6th Annual fundraising walk, the 2010 Step Up for Down Syndrome, at William Land Park on Sunday, October 17. The DSIA is a local non-profit organization that promotes Down Syndrome awareness and inclusivity, and offers support and community to people with Down Syndrome and their families. Wilke Fleury partner Trevor Stapleton, along with associate attorneys Latika Sharma and Natalie Johnson, will be participating in the event as well as staffing the Wilke Fleury informational booth. Please be sure to stop by and meet our attorneys and enter the drawing for a festive Fall gift basket.

For more information on the event, click here.


The midterm elections have changed the political landscape in Washington, with Republicans winning control of the House of Representatives and picking up seats in the Senate. Even so, it is still too early to know exactly how this will affect the array of open tax issues for 2010 and 2011.

Of particular importance, Congress must decide whether to extend any of the Bush-era tax rules that will otherwise expire at the end of 2010. Without Congressional action, individuals will face higher tax rates on their income, including capital gains. Consequently, it may be beneficial to conclude any sales in 2010 to benefit from the lower capital gains rates.

Also, unless Congress changes the rules, the estate tax will return next year with an exemption level of only one million dollars and a 55% top estate tax rate. As such, estates that were under the estate tax exemption level of $3.5 million over the last several years may now be taxable, and estate tax planning steps may therefore be advisable.

In short, year-end planning—which always involves some educated guesswork—is a bigger challenge this year than in past years.

If you have questions about year end tax planning, contact us as soon as possible so that if action is advisable, there will be time to complete the steps before 2011.

Trusts For People With Disabilities

A primary planning tool for a person with a disability is a carefully drafted trust that prevents the assets of the trust from disqualifying the person from receiving public benefits.

1. Is a Trust Necessary? 
A trust can be a beneficial planning tool to preserve assets for the benefit of a person with a disability. If an individual’s only public benefits are entitlement programs such as Social Security Disability Insurance and Medicare, a trust may not be necessary. If, however, a person with a disability is receiving need-based benefits such as SSI or Medi-Cal or may reasonably be expected to need such programs in the future, a trust is the primary means to preserve the public benefits and allow for additional assets to be held and used for the individual’s future needs. Otherwise, the individual may become ineligible for public benefits until the additional assets are spent or given away (which would also cause a period of ineligibility). Other than placing assets in a trust, the other alternative is to purchase assets that are not counted for purposes of need-based benefit requirements. However, this does not provide additional funds to supplement public benefits. In addition, if funds are needed and the exempt assets are sold, the proceeds could again trigger benefit ineligibility until spent.

2. Trusts For People With Disabilities.
Trusts for people with disabilities fall into two basic categories: (1) first party trusts; and (2) third party trusts. Although within each category there are variations, the basic structure is that assets are transferred into trust for the benefit of a beneficiary with a disability. A third party serves as trustee and the beneficiary has no control over disbursements from the trust. The distinction between a first party trust and a third party trust is where the assets to fund the trust originate.

A.  The first party trust is a trust that allows a person with a disability to transfer his or her own assets into the trust without being penalized under need-based public benefit programs. The most prominent feature of this type of trust is the requirement that the State be reimbursed from the trust’s remaining assets on the beneficiary’s death. The State must “receive all amounts remaining in the trust upon the death of such individual up to an amount equal to the total medical assistance paid on behalf of the individual under a State plan.” The reimbursement requirement applies only to Medi-Cal benefits paid, not to SSI benefits.

B.  A third party trust is established with the assets of someone other than the person with a disability. Unlike the first party trust, there is no reimbursement requirement. The third party trust also has the advantages of allowing the person setting up the trust (the “settlor”) a great deal of flexibility in structuring the trust including:

  • Providing for distributions to or for the benefit of multiple beneficiaries, including beneficiaries without disabilities;
  • Establishing an advisory committee to oversee and make recommendations regarding the care of the beneficiary with a disability;
  • The ability to use trust funds to hire caregivers, case managers, advocates and attorneys for the beneficiary with a disability; and
  • Controlling the final distribution of any assets remaining after the death of the beneficiary with a disability.

The key to a third party trust is ensuring that the trust assets are not includible as assets or income of the beneficiary. A carefully drafted third party trust can allow a parent or relative to provide for the lifetime care and advocacy of a person with a disability without causing him or her to lose public benefits.

3. What kinds of benefits can be provided by a third party trust for a beneficiary with a disability?
The trustee is generally directed to make expenditures to maintain the beneficiary’s good health, safety, and welfare when these are not being provided by any public agency. This commonly includes basic living needs such as dental care, medical care, custodial care, support services, and similar care not provided by public benefit programs. In addition, distributions are also commonly authorized for goods and services such as:

  • Clothing, bedding, and furniture;
  • Telephone, Internet, and cable or satellite television;
  • Audio, video and computer equipment;
  • Newer or more effective medications than allowed by Medi-Cal;
  • More sophisticated medical or dental or diagnostic work or treatment for which funds are not otherwise available;
  • “Nonessential” medical procedures (such as massage therapy or acupuncture);
  • Periodic outings and vacations; and
  • Any other items to enhance the beneficiary’s quality of life, self-esteem, or situation. If set up correctly, a trust can provide additional comfort and care to enhance the quality of life of a person with a disability, without causing a loss of public benefits.

If you would like further information about a trust for a person with a disability, please contact us at (916) 441-2430.

Conservatorships For People With Disabilities

1. What is a conservatorship? 
A conservatorship is a court proceeding through which a responsible person (called a conservator) is appointed by the court to care for another adult who cannot care for him/herself or his/her finances (called a conservatee).

2. What is a Limited Conservatorship?
A “Limited Conservatorship” is a special type of conservatorship intended specifically for a person with a “developmental disability.” The goal is to encourage the limited conservatee’s maximum self-reliance and independence. As such, the limited conservator is generally only granted those powers that are necessary to aid the limited conservatee in those areas in which the limited conservatee needs assistance.

3. Who determines if a person has a “developmental disability”?
Generally, the Regional Center will determine if a person is developmentally disabled. If the person is a client of the Regional Center, then he or she automatically qualifies. Otherwise, the Regional Center will assess the individual to determine if he or she has a developmental disability.

4. What kinds of powers can a limited conservator be granted?
People with developmental disabilities can usually do many things on their own. As such, the limited conservator is only granted powers to do things the limited conservatee cannot do without help. The powers that the limited conservator may be granted are generally limited to the powers to:

Fix the residence or specific dwelling of the limited conservatee;

 Access confidential records and papers of the limited conservatee;

 Consent or withhold consent to the marriage of, or the entrance into a registered domestic partnership by, the limited conservatee;

 Contract on behalf of the limited conservatee;

 Give or withhold medical consent on behalf of the limited conservatee;

 Control social and sexual contacts and relationships of the limited conservatee; and

 Make decisions concerning the education of the limited conservatee.

However, because the court will only grant those powers that are necessary to aid the limited conservatee, not all these powers are granted in every case. For example, it is uncommon for the court to grant the limited conservator the power to control relationships of the limited conservatee unless the limited conservatee has shown that he or she makes poor choices that put him or her in danger, such as being in abusive relationships.

5. Who can be appointed as limited conservator?
Although any responsible adult can act as a limited conservator, limited conservators are usually parents or siblings of the person with the disability. It is also possible to appoint more than one person as limited conservator at the same time. In fact, it is a good idea to have at least one parent and a sibling or other relative act as co-limited conservators. That way, if one co-limited conservator dies or becomes incapacitated, there is still a limited conservator in place. Otherwise, a new limited conservator would have to be appointed through court proceedings.

6. Can I avoid court proceedings by naming a limited conservator for my child in my Will or living trust ?
No. Only the court can appoint a limited conservator.

7. What if I decide not to establish a limited conservatorship?
In most cases, adults with development disabilities are not able to give informed consent for medical treatment or to sign contracts. As such, if a limited conservatorship is not established, the director of the Regional Center has the authority to make most of the decisions for the adult with development disabilities. including decisions regarding residence, medical care, and contracting for services.

8. When should I apply for limited conservatorship?
If you are trying to establish a limited conservatorship for someone who will soon be 18, it is a good idea to start the process more than 3 months before his or her 18th birthday. A limited conservatorship is a court proceeding and it takes time to gather reports and hold court hearings before the limited conservator is actually appointed.

9. If I am a limited conservator, do I also need a conservatorship of the estate?
Generally, you do not need a conservatorship of the estate if the limited conservatee gets only public assistance, like Supplemental Security Income (SSI) or Social Security (SSA) but has no other assets. But, you will need a conservatorship of the estate if the limited conservatee has other assets, like an inheritance or a settlement from a lawsuit that is not in a trust for a person with a disability.

10. Does the court supervise the limited conservator?
Yes. Generally, a court investigator will review the case one year after the conservatorship is granted, then every 2 years after that. The review will include discussion with the limited conservator and a visit with the limited conservatee. If a conservatorship of the estate is established, the conservator will be required to file an annual report with the court to show how the money in the conservatorship is being managed and spent.

If you would like further information about limited conservatorships, please contact us at (916) 441-2430.

Reasonable Accommodations Must be Effective Accommodations

Although the Americans with Disabilities Act (ADA) recently celebrated its 20th anniversary, many employers still have difficulty understanding the scope of the ADA’s requirement to provide reasonable accommodations for employees with disabilities. A recent decision by the Ninth Circuit Court of Appeals highlights the importance of communication between the employer and employee when determining the appropriate reasonable accommodation for a disabled employee, as well as the continuing nature of the employer’s obligation.

An Example of Ineffective Accommodation: EEOC v. UPS Supply Chains Solutions 

In 2001, UPS hired Maricio Centeno as a junior clerk in the accounts payable division. Centeno was born deaf, his native language was American Sign Language (ASL) and he could only read and write English at the fourth or fifth grade level. Centeno was able to complete his job responsibilities without the assistance of an ASL interpreter, but required reasonable accommodations to fully enjoy certain benefits and privileges of his position.

UPS held mandatory weekly and monthly accounts payable meetings, but due to his disability, Centeno was unable to understand what was being said during these meetings. In 2002, Centeno requested an ASL interpreter at the meetings. UPS chose to accommodate Centeno by requiring him to attend the meetings and then providing him with written summaries of the meetings after they were concluded. Centeno was unhappy with this accommodation because he received the information at a later time than the rest of the employees, he was unable to voice his opinions or ideas during the meetings, and he frequently did not understand the summaries. Centeno expressed these concerns to UPS and in 2004, UPS responded by having another employee sit with Centeno and take notes for him during the meetings. This accommodation was also ineffective because Centeno could not understand the notes. In 2005, UPS began providing an ASL interpreter for the monthly meetings but not for the weekly meetings.

UPS had similar difficulties providing Centeno with reasonable accommodation regarding other aspects of his job, including assistance with an Excel training program, understanding a written warning regarding a violation of UPS’s anti-harassment policy and understanding and completing a questionnaire on harassment awareness.

The Court’s Decision
Initially, the lower court held in favor of UPS, finding that the accommodations that UPS provided for Centeno were reasonable. The EEOC then appealed to the Ninth Circuit. The issue before the Ninth Circuit was whether UPS provided Centeno with reasonable accommodations under the ADA that would allow him to enjoy the benefits and privileges of his position, including required meetings, job training, understanding the contents of written warnings and comprehending UPS’s harassment awareness questionnaire. UPS argued that it reasonably accommodated Centeno because its modifications were effective.

The Ninth Circuit explained that a reasonable accommodation must allow an employee with a disability to enjoy the same benefits and privileges of employment as are enjoyed by other similarly situated employees without disabilities. The employer is required to engage in an “interactive process” with the employee to determine what accommodation is most appropriate. This interactive process requires “(1) direct communication between the employer and employee to explore in good faith the possible accommodations; (2) consideration of the employee’s request; and (3) offering an accommodation that is reasonable and effective”. Furthermore, an accommodation is ineffective when it does not fully accommodate a disabled individual’s limitations. The Ninth Circuit determined that a jury should decide whether the accommodations UPS implemented were effective, because the issue was not so clear cut that it could be decided by a court. The court noted that an employer is not required to provide an employee with the exact accommodation that he requests, but continuing to utilize an ineffective accommodation is not reasonable.

Lessons for Employers
1. Employers must not only provide reasonable accommodations to disabled employees to ensure they can perform their essential job responsibilities, but also that they are able to fully enjoy the benefits and privileges of their employment.

2. Employers implementing a reasonable accommodation for a disabled employee must engage in an interactive process with the employee to determine if the accommodation is effective.

3. If the employee complains that the accommodations offered are ineffective after trying them, further discussions regarding other alternatives must take place to determine whether an effective accommodation exists.