THE APPLICATION OF LYNNETTE A. LEWIS, AS GUARDIAN OF THE PERSON AND PROPERTY OF SUSAN A MENTALLY RETARDED PERSON PURSUANT TO SCPA §17-A, FOR LEAVE TO LIFT RESTRAINTS, RECEIVE AND TRANSFER ASSETS INTO A POOLED SUPPLEMENTAL NEEDS TRUST (306 G 1980/B) ó In this contested miscellaneous proceeding, petitioner, Lynnette A. Lewis ("Lynnette"), seeks authorization to create a supplemental needs trust under the pooled trust maintained by the Nassau County AHRC, Inc. ("NCAHRC") for the benefit of her sister, Susan Jerelynn Lewis ("Susan"). This pooled trust is known as Nassau County AHRC Foundation Community Trust II (the "AHRC Pooled Trust"). In addition, petitioner seeks the revocation of the letters of guardianship of the property issued to her and the awarding of legal fees to her counsel.
Jurisdiction has been obtained over all necessary parties to the proceeding including Susan, a mentally retarded person for whom a guardian ad litem has been appointed. Objections, in the nature of a verified answer, were filed by the Attorney General of the State of New York, as attorneys for the New York State Office of People with Developmental Disabilities ("OPWDD"). OPWDD proposes the use of a "payback" trust, instead of a pooled income trust, or use some other pooled income trust "which does not have the conflict of interest possessed by the Trustee recommended by Petitioner." OPWDD states that there is a conflict because Susan resides in an NCAHRC facility, and the funds will be placed in the AHRC Pooled Income Trust. OPWDD claims that this conflict is inherent, as shown by the "Waiver of Conflict of Interest" provision within the Trust, as paragraph Ten.
Objections, in the form of a verified answer have also been filed by the New York Civil Liberties Union Foundation ("NYCLUF") as attorneys for Susan as a member of the Willowbrook class. In its pleadings NYCLUF argues, inter alia, that while it supports the need to take steps to protect Susan's funds and her Medicaid eligibility by depositing her funds with a Medicaid exempt trust, the AHRC Pooled Trust is not an appropriate recipient of such funds because it is managed by the same entity that provides Susan with her residential care. NYCLUF argues for the use of a "neutral" fiduciary as trustee, and not a person who provides services to, or is a potential creditor of, Susan.
An "Amended Stipulation of Settlement" was subsequently filed with the court, which provides, inter alia, for the establishment of a payback supplemental needs trust for the benefit of Susan, for which petitioner will serve as trustee; petitioner, as trustee, will be required to file a bond in the amount of $100,000.00; and Lynette, as trustee, agrees to file a semi-annual "Expenditure Plan" for Susan. The guardian ad litem has filed his report recommending that the amended stipulation of settlement be approved, and the application to create a supplemental needs trust for the benefit of Susan, as modified by the Amended Stipulation of Settlement, be granted.
The record reflects that the petitioner, Lynnette A. Lewis, was appointed successor guardian of the person of Susan by decree of this court dated February 1, 2011. Petitioner was thereafter appointed guardian of the property of Susan by decree of this court dated September 15, 2011, and letters of the guardianship of the property issued to her on that date. Petitioner now seeks authorization to create a supplemental needs trust for the benefit of Susan with funds which were paid to NCAHRC on behalf of Susan.
A copy of the supplemental needs trust is annexed to the petition. The provisions of the supplemental needs trust tend to conform to EPTL 7-1.12 and otherwise tend to conform with present federal and state law. The court notes, and the record reflects, that, although petitioner requests that "the court award legal fees to Jack N. Posner, Esq., attorney for Petitioner in this proceeding," petitioner has not requested the amount in which the fee be fixed and no retainer agreement, affidavit of services rendered, or contemporaneous time records of Mr. Posner have been filed.
Accordingly, it is
ORDERED, that petitioner be and hereby is authorized to establish and fund a supplemental needs trust for the benefit of Susan Jerelynn Lewis, and it is further
ORDERED, that the proposed trustee is directed to file her oath and designation, as trustee, as well as a bond in the amount of $100,000.00, at which time the letters of guardianship of the property heretofore issued shall be revoked, and it is further
ORDERED, that the guardian ad litem be and hereby is awarded $2,000.00 as an allowance for services rendered his ward, and it is further
ORDERED, that the petitioner fund said trust with the guardianship monies currently held by AHRC of Nassau County, and it is further
ORDERED, that upon the filing of a bond in the amount of $100,000.00, the petitioner is authorized to pay the following sums from the assets of Susan Jerelynn Lewis:
(a) the cost of the bond provided above, and
(b) the allowance awarded the guardian ad litem for his services in this proceeding, and it is further
ORDERED, that the petitioner file an original, executed trust indenture which incorporates the changes agreed to pursuant to the terms of the Amended Stipulation of Settlement and which complies with this decision and order within thirty days of the date hereof, while simultaneously providing copies of same to all parties who have appeared herein, and it is further
ORDERED, that upon the presentation of a certified copy of this order, each depository and the NCAHRC be and hereby is authorized to permit the withdrawal of the funds currently on deposit in the name of the guardian of Susan Jerelynn Lewis, or held for the benefit of Susan Jerelynn Lewis, and it is further,
ORDERED, that the branch of the petition seeking the fixing of counsel fees is denied, without prejudice, as the record is insufficient to grant the relief requested, and it is further
ORDERED, that within thirty (30) days of the filing of the copy of the executed trust indenture, petitioner file any and all documents evincing the transfer of monies into the supplemental needs trust, and it is further
ORDERED, that this matter is hereby scheduled for a conference on October 31, 2011, at 9:30 a.m. at the Suffolk County Surrogate's Court, County Center, 320 Center Drive, Riverhead, New York, to confirm compliance with this Decision and Order. If the guardian ad litem has filed a supplemental report by that date confirming petitioner's compliance with this Decision and Order, counsel for petitioner and the guardian ad litem need not appear.
September 20, 2012