Plan To Be 100

This post is about a published opinion which looks whether, and to what extent, a probate court can exercise authority over Social Security benefits paid to a person under the court’s protection.  As probate practitioners know, when someone subject to an EPIC conservatorship or a plenary guardianship under the mental health code (aka “DD guardianship”) receives Social Security payments, questions may arise about the role of the probate court vis a vis those benefits.

This case answers only those questions raised by the specific facts of this case. But the case may suggest how other related questions would be answered, and, at a minimum, provides a framework for analyzing these issues.

The case is called In Re Guardianship of Anna-Marie Margaret Bazakis.  Click on the name to read the case.

The Background Story

Bomba and Bazakis are the parents of, and DD co-guardians over, Anna-Marie.

Bomba applies for Social Security benefits.  Anna-Marie qualifies for Supplemental Security Income (“SSI”) and the Social Security Administration (“SSA”) appoints Bomba to be her representative payee.

Bazakis complains to the probate court that appointed them co-guardians that Bomba isn’t sharing information about the SSI payments and that the SSI payments should be evenly divided between them because they have shared 50/50 custody of Anna-Marie.

The trial court orders that (1) Bomba transfer half the SSI benefit to Bazakis monthly and (2) that Bomba arrange to have the SSI payments deposited into an account that is set up so that Bazakis can monitor the activity.

The Decision

The Court of Appeals spends most of its opinion discussing federal preemption, when and how it applies.  It concludes that: Where a representative payee has been appointed by the SSA, a state court has no authority to order the representative payee to pay over those funds to someone else.  On the issue of requiring the funds be placed in a joint account, or otherwise made subject to the oversight a third party, the COA finds that this aspect of the order is not preempted by the federal government’s interest.  As such, the trial judge’s decision is affirmed in part, reversed in part and remanded.

Other Related Questions

For me, the big question not addressed in this opinion is whether a probate judge can require a court-appointed fiduciary to include income paid to the ward from the SSA on its annual accounting?

The answer, I think, may depend on whether there is a representative payee in place.

Where the court-appointed fiduciary is also the representative payee, the Bazakis opinion would seem to suggest that the probate court has no authority to require a court-appointed fiduciary to include Social Security benefits in their accountings.  This is because the SSA already has a process for requiring the Social Security benefits to be accounted for.  Likewise, even if the probate court were simply advised of the existence of Social Security benefits in an accounting, the probate court would have no ability to approve or disapprove of how those Social Security benefits are used (again, because the SSA already has a mechanism for reviewing the appropriateness of the activities of the representative payee, and if necessary, removing the representative payee).

However, in a case in which the ward receives Social Security benefits but no representative payee has been appointed, the rules seem less certain.  Arguably, until a representative payee is put in place, there is less redundancy and therefore less grounds for preemption.  However, the availability of a representative payee appointment alone would arguably preempt the authority of a state court from appointing a fiduciary and giving that fiduciary authority over Social Security benefits. Perhaps the easiest solution for a court is to require that a representative payee be appointed whenever circumstances would allow such an appointment.

And finally, pretty clearly (I think), in a situation in which a representative payee has been appointed but the court-appointed fiduciary is not the representative payee, a state court would have no ability to order that the ward’s Social Security benefits be accounted for.

Conclusion

What we know from Bazakis is that probate courts can’t tell court-appointed fiduciaries who are also representative payees how to spend the Social Security benefits of the ward.  We also know that it is not wrong for a probate judge to direct a representative payee who is also a court-appointed fiduciary to hold Social Security benefits in an account that allows other persons with a legitimate interest in the affairs of the ward to observe the activities of that account.  Beyond that, the rules are not so clear.

As those who practice in this arena know, some probate courts now allow (perhaps require) fiduciaries they appoint to include Social Security benefits on their accountings.  Where the ward has Social Security benefits along with other sources of income, it seems to make sense to have an accounting which presents a complete picture of what is taking place financially.  Notwithstanding, based on this case, at least when a representative payee has been appointed, this practice would arguably run afoul of federal preemption.

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