Carrie Fisher Stone, Deputy Executive Director
California ABLE Act Board
915 Capitol Mall, Room 101
Sacramento, CA 95814
By email to: [email protected]
June 12, 2017
Re: Comment on CalABLE proposed regulations—urgency to include conservators as Authorized Legal Representatives
Dear Ms. Fisher Stone:
Thank you for this opportunity to provide comment on the proposed regulations posted at http://www.treasurer.ca.gov/able/resources/regulations/proposed-regulations.pdf.
Autism Society San Francisco Bay Area (SFASA) is concerned about the lack of clarity regarding who can qualify as an "Authorized Legal Representative" (ALR) to establish and manage a CalABLE account on behalf of an Account Owner (person with a disability). If the ALR provision is construed narrowly, tens of thousands of California’s most severely disabled adults will be de facto excluded from participation in CalABLE, in clear contravention of the intent of a law crafted to make saving simpler and to reduce associated management burden and costs.
Adults with intellectual disabilities, including those with autism, often by necessity become subjects of limited conservatorships. In California, for an individual age 18 or older, a parent or other interested caregiver can petition the court to establish a "conservatorship of the person" and/or a "conservatorship of the estate."
The great majority of our autism families limit their petitions to those of the person, and not of the estate. This stems from two simple reasons: first, the conservatee has almost no prospects for earning income (the conservator is usually named a representative payee for SSI, and other savings held for the benefit of the conservatee are typically gifts and bequests in special needs trusts, if any) and, second, the conservatorship of the estate involves bonding and reporting to the court that imposes a significant and unnecessary administrative burden on the conservator.
As currently drafted, Section 9001(c) provides:
- The Authorized Legal Representative may be a parent or legal guardian of the Account Owner or may be a person granted a valid durable power of attorney to manage banking and investment matters on behalf of the Account Owner and to take all necessary actions on behalf of the Account Owner with respect to the account.
This proposed language is insufficiently clear regarding who may act as an Authorized Legal Representative. First, aside from the POA route, it refers only to "parents" or “guardians” as potential ALRs. The term “parent” may be construed as having legal meaning only as to minors, and not as to adults). While other states use the term “guardians” to refer to court-appointed individuals who make decisions of behalf of the disabled adult, the proper word in California is “conservator.” But the language makes no reference to conservators. The POA provision offers no lifeline, since these are often unavailable to our population owing to their lack of mental competence to execute such a document. Therefore, the language of the proposed regulation leaves open the question of the power of the conservators, who may or may not be parents or other family members, of intellectually disabled adults.
In light of this serious omission, we suggest that the language (in caps) be added as follows:
- The Authorized Legal Representative may be (1) a parent or legal guardian of the Account Owner, (2) A CONSERVATOR (OR LIMITED CONSERVATOR) OF THE PERSON AND/OR CONSERVATOR (OR LIMITED CONSERVATOR) OF THE ESTATE FOR THE ACCOUNT OWNER, or (3) may be a person granted a valid durable power of attorney to manage banking and investment matters on behalf of the Account Owner and to take all necessary actions on behalf of the Account Owner with respect to the account.
Inclusion of conservators as ALRs is not only functionally necessary to effectuate these savings accounts for the subpopulation of persons with intellectual disabilities subject to conservatorships, it is altogether appropriate given the purpose and structure of the ABLE program, given the great many robust built-in legal protections for Account Owners already in place, to wit:
(1) Conservators have the legal and court-supervised duty to act in the best interests of the conservatee.
(2) The ALR is sharply limited in terms of investment discretion.
(3) The ALR has the legal duty to maintain complete records of distributions. Taxes and penalties apply for non-qualified distributions. Conservators and representative payees also have reporting duties to Social Security and the IRS.
(4) The ALR expenditures are limited to qualified disability expenses.
(5) ABLE accounts have low maximums ($100k, a low sum compared to true expenses to support an adult with a severe intellectual disability) in terms of what can be saved before loss of essential benefits.
(6) Finally, in the event that an amendment to the Probate Code may be considered necessary to solidify the rights of conservators of the person to serve as ALRs, such an amendment could be accomplished in a single line of text, eg, “Conservators of the person are granted the authority to serve as Authorized Legal Representatives for CalABLE Accounts, notwithstanding any other provision of the Probate Code pertaining to conservators of the estate.”
If obtaining requisite authority would require a potential Authorized Legal Representative to apply for formal conservatorship of the estate, we anticipate sharply reduced participation in the program, as this can entail additional court costs and ongoing and significant administrative burdens. Because of this, unless conservators of the person are authorized to serve as ALRs, paradoxically, the most severely impaired Californians would be de facto excluded from participation in CalABLE.
The ABLE Act was created to encourage and assist individuals and families in saving private funds for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life. It would be tragic if a large portion of our most severely disabled adults were essentially barred from participation in the benefits of ABLE due to a conservatorship of the estate prerequisite—a tremendous burden that was clearly never intended by Congress when it passed the ABLE Act.
SFASA staunchly defends the rights of conservators to help create savings and administer funds to improve the quality of life of their severely intellectually disabled loved ones, particularly when it involves a type of account explicitly created to facilitate savings for this particular subpopulation. We thank you for your consideration, and please let us know if we can be of any further assistance.
Very truly yours,