The 8th Circuit Court of Appeals recently reviewed a decision by the Social Security Administration to reject a (d)(4)(A) trust. These trust are created using a disabled individual’s personal funds and require that parents, grandparents, guardians or courts create the trust. Here, an 18-year-old woman directed her parents as her agents to create the trust through a durable power of attorney, using funds from an automobile accident settlement involving a crash that left her with brain damage.
In Draper v. Colvin, the court sided with the SSA, and found that the parents were acting as agents and not parents when creating the trust, and an agent is not an approved person allowed to create a (d)(4)(A) trust.
See Karen B. Mariscal, Form Over Function: Court Decision Guts Special Needs Trust, Planning for Life, April 6, 2015.
