Draper v. Colvin, No. 13-2757 (8th Cir. 2015)
Annotate this CaseDraper, age 18, suffered traumatic brain injury in a 2006 car accident. Draper executed a durable power of attorney, authorizing her parents to collect money; compromise claims; and “fund, transfer assets to, and to instruct and advise the trustee of any trust wherein [Draper is] or may be the trustor, or beneficiary.” Draper began receiving Supplemental Security Income payments. In February 2008, father signed a personal-injury settlement. Draper received $429,259.41. Her parents signed documents creating a Special Needs Trust, intended to qualify under 42 U.S.C. 1396p(d)(4)(A), to provide for Draper’s needs without “displac[ing] or supplant[ing] public assistance or other sources of support that may otherwise be available” and transferred $429,259.41. In September 2008, Draper received notice that she had been overpaid $3,000 in SSI benefits because her trust exceeded the SSI-eligibility limit of $2,000, and that her SSI payments would cease. An ALJ found that for the trust to be exempt from consideration as a personal asset, Draper’s parents had to act as third-party creators when establishing it, but instead acted as agents under the power of attorney. Draper’s parents obtained a state court order modifying the trust, which retroactively listed the state court, rather than Draper’s parents, as the settlor. The Appeals Council denied review, finding that the order did not provide a basis for altering the ALJ’s decision. The district court and Eighth Circuit affirmed.
Court Description: Civil case - Social Security. The Social Security Administration did not err in finding that claimant's trust was not exempt from being counted as a personal asset under 42 U.S.C. Sec. 1396p(d)(4)(A); while the statute does not speak directly to the issue here, the SSA had authority to interpret the statute and the provisions of the Program Operations Manual System (POMS) it adopted were entitled to deference and were a permissible interpretation of the statute; under these provisions, the trust was not exempt and a state court order did not bring the trust into compliance with the POMS.
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