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HomeMy WebLinkAbout04-28-14 c� � o =; Q -c �, � cv � r,-� �7 � � M �` �7 C� d --�J � ;--�. T�.. r.._ C/7 �'1 j.. �. j.,,M1t tV °-s' �r ... �,j � ��1 F�7 � � `�,` .:� � :�7 � r`.,:� � ":.:. C� Q � ":'j � `7�* � '��i y � ` ~ n C� 0'r- �'p'! C,�p � O �7 IN RE: : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA, ESTATE OF CLAIRE WONG CREGO, : ORPHANS COURT DIVISION AN INCAPACITATE PERSON : : rvo. � /_ j ( _ � 05-� PETITION TO AUTHORIZE CREATION AND FUNDING OF A SPECIAL NEEDS TRUST FOR CLAIRE WONG CREGO AND NOW, comes Petitioner, Claire Wong Crego, by and through her Guardian, Christine Dixon, by and through their attorneys, Wix, Wenger & Weidner, and files this Petition to Authorize Creation and Funding of a Special Needs Trust for Claire Wong Crego, stating as follows: 1. Claire Wong Crego ("Claire") was adjudicated an incapacitated person and Christine Dixon ("Petitioner") was appointed #he plenary guardian of her estate and person by Decree dated February 21, 2006, docketed to Case No. 21-06-0056. 2. Claire was born an February 27, 1987, is 26 years of age, has never been married and has no issue, and resides at 149 West Louther Street, Carlisle, Cumberland County, Pennsylvania 17013. 3. Janet B. Crego died on December 25, 2005. During her lifetime, Janet M. Crego established the Janet B. Crego Five Year Trust Dated October 17, 1997 (the "Crego Trust"). � .� 4. Pursuant to the dispositive provisions set forth in Article Seventh, subparagraph B of the Crego Trust, Claire is entitled to a one-third ('/3) interest in finrenty- five percent (25%) of the Trust estate at the time of Janet B. Crego's death. 5. On December 16, 2013, Petitioner executed a Partial Disclaimer of Claire Wong Crego disclaiming Claire's interest in the Crego Trust in all but Forty-Seven Thousand Dollars ($47,000). A copy of the Partial Disclaimer is attached as Exhibit "A." 6. By this Petition, Petitioner seeks to obtain approval for the creation and funding of a Special Needs Trust for Claire under 42 U.S.C. § 1396p(d)(4)(a), with Geoffrey B. Crego as the trustee of said Trust. Geoffrey B. Crego's Consent to serve as Trustee is attached as Exhibit "B". Pursuant to 20 Pa. C.S.A. § 5536(b), this Court may approve the creation of a trust for an Incapacitated Person. 7. Claire has no other assets other than the amount from the Crego Trust noted above, and her only income consists of$974.00 monthly from SSI and $3,784.00 from employment with the S. Wilson Pollock Center for Industrial Training. 8. Clare qualifies for and relies upon Medicaid for all of her medical care. 9. Petitioner has attached hereto a form of trust agreement, titled "The Claire Wong Crego Special Needs Trust," (the "Special Needs Trust") the terms of which are in accordance with 42 U.S.C. § 1396p(d)(4)(a) which exempts the assets held in Trust from being considered in the determination of Claire's eligibility for, or amount of, medical benefits under a State Plan under the Social Security Act, 42 U.S.C. § 1382(c)(a)(3). 10. Because the Special Needs Trust will contain all of Claire's assets, there is no need for the Guardian to post additional security. 11. Pursuant to the Special Needs Trust, Geoffrey B. Crego shall serve as the trustee of the Special Needs Trust, with Petitioner Guardian to serve as successor trustee. 12. Petitioner respectFully requests authorization for Geoffrey B. Crego to receive the balance of$47,000.00 in the capacity of trustee of the Special Needs Trust. 13. The primary purpose of the Special Needs Trust is to provide for fund handling, fiscal management, investment and disbursement, personal services, asset protection, advocacy, social and occupational development services, rehabilitation, care, management and guidance for Claire. 14. Under 42 U.S.C. § 1396p(d)(4)(a), Claire will remain eligible for Medicaid benefits. Upon her death however, the Trustee will be required to reimburse the Commonwealth of Pennsylvania for all Medicaid payments made on behalf of Claire during her lifetime. 15. By letter dated February , Petitioner provided notice of the filing of this Petition, along with a copy of the Petition and the Special Needs Trust, to the following: Special Needs Trust Depository Attention: P Manager, TPL Section Post Office Box 8486 Harrisburg, PA 17105 SSI Program Support Team Attention: Team Leader Mid-Atlantic Program Service Center 3rd and Spring Garden Streets Philadelphia, PA 19101 [SIGNATURE PAGE FOLLOWS] WHEREFORE, Petitioner respectfully requests that this Court enter the proposed Decree attached hereto. Respectfully S bmitted, WIX, WEN ER &WEIDNER � Date: By: �.�2��� 4. Stewen C. Wilds, Esquire I.q: No.: 41692 508 North Second Street Post Office Box 845 Harrisburg, PA 17108-0845 (717) 234-4182 VERIFICATION I, Christine Dixon, Petitioner in the foregoing Petition to Authorize Creation and Funding of a Special Needs Trust for Claire Wong Crego, have read the said Petition and hereby affirm and verify that it is true and correct to the best of my personal knowledge, information and belief. I verify that all of the statements made in the foregoing are true and correct and that false statements made therein may subject me to the penalties of 18 Pa.C.S.A. Section 4904, relating to unsworn falsification to authorities. �" � �. Date: � c�) C istine Dixon ' EXHIBIT A SPECIAL NEEDS TRUST This Declaration of Trust (the "TrusY') is established by Order dated , 2014 ("Order") of the Orphans' Court Division of the Court of Common Pleas of Cumberland County, Pennsylvania, for the sole benefit of Claire Wong Crego ("Claire"), an incapacitated adult born February 27, 1987, who is a disabled individual as defined in Title XVI of the Social Security Act (the "Act"), 42 U.S.C. §1382(c)(a)(3). A copy of the Order is attached hereto. This Trust, which shall be known as the "Claire Wong Crego Special Needs Trust," is established in accordance with a provision of the Title XIX of the Act, specifically 42 U.S.C. §1396p(d)(4)(A), as amended by the Omnibus Budget Reconciliation Act of 1993 (and any federal ar state regulations or other rules promulgated pursuant to that provision) which exempts the assets held in Trust from being considered in the determination of Claire's eligibility for, or amount of, medical benefits under a State Plan under the Act, and therefore, the property directed to this Trust shall in no way be deemed to have been or to be available to Claire. The Commonwealth of Pennsylvania, Department of Public Welfare, or any successor agency, and/or any other state which has provided Claire with medical care under a state medical assistance program during the term of this Trust, is deemed to be a party- in-interest herein and therefore shall be provided with notice of any court proceedings involving this Trust. Upon funding, the trustee shall provide a copy of this Trust to: Special Needs Trust Depository Attention: P Manager, TPL Section Post Office Box 8486 Harrisburg, PA 17105 SSI Program Support Team Attention: Team Leader Mid-Atlantic Program Service Center 3�d and Spring Garden Streets Philadelphia, PA 19101 Geoffrey B. Crego shall serve hereunder as trustee and hold the sums distributable to Claire in settlement of the matter known as , Court of Common Pleas, Cumberland County, No. , in accordance with the said Order, and any other property acceptable to the trustee which is added to this Trust, and shall manage, invest or reinvest said property, shall collect the income therefrom and shall distribute the net income and principal in accordance with the following provisions: 1 FIRST: Distributions. A. Upon funding, trustee shall use trust principal to fund promptly an irrevocable burial account for Claire in an amount not to exceed the limits established by law. B. During Claire's lifetime, the trustee shall distribute for Claire's benefit such parts or all or none of the net income (as defined in the Item SECOND below) and principal as the trustee shall determine in the trustee's sole discretion, subject to the provisions regarding Trustee Discretion below, for the special needs of Claire; provided, however, that the trustee shall obtain approval from the Orphans' Court Division for any such decision to distribute Trust principal. Any income which is not distributed shall be accumulated and may be, but is not required to be, added to principal. C. Upon Claire's death (or the earlier termination of this Trust under the Administrative Provisions below), the trustee shall pay to the Commonwealth of Pennsylvania, Department of Public Welfare, or any successor agency, and/or any other state which has provided Claire with medical care under a state medical assistance program, an amount which is equal to the lesser of the amount paid to or on behalf of Claire under by such plan or plans until her death or earlier termination of this Trust (as finally determined by such state or states), or the balance remaining in the Trust, in accordance with 42 U.S.C. §1396p(d)(4)(A) and the balance remaining in the Trust is insufficient to pay each of those states in full, reimbursement shall be made pro rata among such states. D. The trust shall terminate upon Claire's death (if not earlier terminated under the Administrative Provisions below) and the trustee shall distribute any principal and income remaining in the Trust, after the distribution directed in paragraph C of this Item, the trustee shall distribute any unappointed principal and income equally to Meghan Crego and Adam Crego free of trust. SECOND: Definition of Income. For all purposes of trust administration hereunder: A. The term "income" as used herein shall mean an annual amount (also referred to in this Item as the "unitrust" amount) equal to the greater of (i) trust accounting income, or (ii) four percent (4%) of the net fair market value of the trust's assets, whether such assets would be considered income or principal, averaged over the lesser of (a) the three preceding years of trust administration, or (b) the period during which the trust has been in existence. B. The trustee may, in the trustee's discretion, from time to time determine all of the following: 2 (1) The provisions for prorating a unitrust amount for a short year in which Claire's right to payments commences and ceases. (2) The effect of other payments from or contributions to the trust on the trust's valuation. (3) The frequency of distributions of the unitrust amount during the year. (4) Whether to value the trust's assets annually or more frequently. (5) What valuation dates to use. (6) How frequently to value non-liquid assets and whether to estimate their value. (7) Whether to omit from the calculation trust property occupied or possessed by a beneficiary. (8) Any other matters necessary for the proper calculations of the unitrust amount and functioning of the trust. C. Claire will likely to be required to include in her gross income for tax purposes all the taxable income earned by this trust during her lifetime (including realized capital gains), to report such income on her personal income tax return, and to pay the income tax due with respect to such income, because this trust is a "grantor trust" under the Internal Revenue Code of 1986, as amended. To the extent that Claire is required to include in her taxable income any portion of the income earned by this Trust and pay the income tax due with respect to such income, the trustee shall pay to Claire, the guardian of her estate, or to the tax authorities, from principal, without further court approval, an amount equal to the increase in income taxes, interest and penalties thereon, payable because of such inclusion. After Claire's death, income taxes shall be paid by the beneficiary and/or trustee under ordinary fiduciary income tax rules. THIRD: Trustee Discretion. The trustee shall be guided by the following when exercising discretion hereunder. A. Wherever the trustee has the discretion to determine whether or to what extent principal or income shall be distributed to be used for the benefit of Claire hereunder, the trustee shall consider the resources and sources of funds available to Claire through any state or federal public assistance program. In making this determination, the trustee shall consider that the purpose of this Trust is not to supplant public assistance benefits, but to supplement those benefits by providing only for Claire's special needs, in such manner that Claire will not be disqualified from any local, state or federal benefits. 3 B. The term "special needs" refers to the maintenance of Claire's good health, safety and welfare when, in the discretion of the trustee, such needs are not provided, or not provided in a timely or desirable manner, by any public assistance agency or other public or private source. Such needs may include, but are not limited to, extra and supplemental medical and dental care, physical and mental health care, nursing and custodial care, vocational and other training, case management and guardianship fees, equipment and supplies, therapies, nutrition, transportation, maintenance, education, therapeutic travel and recreation, and the like. FOURTH: Protective Provisions. This is a discretionary, non-support trust. No principal or income of the Trust shall be anticipated, assigned, or encumbered. The Trust shall not be liable for any debt, contract or engagement of Claire nor subject to any legal process. No part of this Trust estate shall be construed as being subject to the claims of Claire's voluntary or involuntary creditors. The trustee shall deny any requests by any public or private entity to disburse Trust funds for support or other care that such entity has the obligation to provide to Claire. FIFTH: Debts, Taxes and Expenses after the Death of the Beneficiarv. A. Upon Claire's death, the trustee may thereafter in the sole discretion of the trustee and without court approval, pay the following expenses from the principal and/or income of the trust prior to repayment provided under Item FIRST: C. above: (1) All taxes and any interest and penalties thereon due from the trust to the State or Federal Government because of Claire's death. (2) All reasonable fees for administration and/or termination of the trust estate, such as preparing and filing and accounting of the trust with a court. B. Upon Claire's death, subject first to repayment provided under Item FIRST: C. above, the trustee may thereafter, in the sole discretion of the trustee and without court approval, pay any part or all of the following from the remaining principal and/or income of this Trust. (1) The outstanding debts and expenses of the Trust to the extent not already paid under Paragraph A above. (2) Claire's debts, funeral expenses, and expenses of the administration of her estate, if Claire's testamentary estate, exclusive of her residence and tangible personal property, shall be insufficient to pay such debts and expenses, but 4 none of said debts or expenses shail be enforceable against the trustee by reason of this provision. (3) Such taxes, and interest and penalties thereon, on the balance of Claire's gross estate for tax purposes as the trustee may determine to be appropriate in order to facilitate the settlement of Claire's estate, but none of the said taxes, interest and penalties shall be enforceable against the Trust by reason of this provision. No beneficiary shall be required to refund any part of such taxes, interest or penalties. SIXTH: Fiduciarv Powers. The trustee shall have the following powers, in addition to any powers given the trustee by law which, anything to the contrary herein notwithstanding, the trustee may exercise in the sole discretion of the trustee and without court approval unless otherwise specifically provided in this Item: A. To retain and invest in all forms of real and personal property in accordance with and as authorized by the Prudent Investor Rule, 20 Pa. C.S.A. §7201, et seq., as amended from time to time, including any real property used as a residence suitable for Claire's needs, notwithstanding the fact that it may be non-income producing, provided that any such real estate investment must be approved by the Orphan's Court Division. B. To join in any merger, consolidation, reorganization, voting trust plan or similar action, and to delegate discretionary powers or duties with respect thereto. C. To sell at public or private sale for cash or credit, to exchange, or to lease for any period of time, any real or personal property, to give options for sales, exchanges or leases and to allocate premiums from the sale of options to income or principal. D. To take any and all action which the fiduciary deems necessary to prevent, abate, "clean up" or otherwise respond to any actual or potential violation of any federal, state or local law, rule or ordinance affecting any property held in this Trust related to the generation, use, treatment, storage, disposal, release, discharge of, or contamination by, any materials or substances that are prohibited or regulated by federal, state or local law or that pose a hazard to the environment or human health, and to charge the expense thereof to principal or to income or partly to each (provided, however, that the trustee shall obtain approval of the Orphans' Court Division for any such charge to principal). E. To borrow money from anyone, including a trustee hereunder and to mortgage or pledge any assets as security therefore. 5 F. To compromise or settle ciaims without obtaining any beneficiary's consent. G. To make distribution in kind and to cause any share to be composed of cash, property or undivided fractional shares in property different in kind from any other share, giving consideration to such extent as the trustee determines to the federal income tax basis of such property. H. To allocate all structured settlement payments or annuity payments to income unless otherwise specifically directed by the Orphans' Court Division. I. To apply any payment of income or principal to which Claire is entitled hereunder directly for her benefit or to pay it to her natural guardian or legally appointed conservator or guardian of the estate or person or such other person as the trustee elects to disburse it for Claire's benefit. The receipt of the person so selected shall be a complete discharge of the trustee therefore. J. To repair and maintain any real personal property and to charge the expense to income or principal (provided, however, that the trustee shall obtain approval of the Orphan's Court Division for any such charge to principal). K. To determine whether any receipt or any portion thereof including premiums from the sale of options, and any corporate distribution which is described or designated by the corporation as a stock divided or as a distribution that may be received in cash or in shares of the corporation at the option of the holder, should be charged or credited to income or to principal where the allocation is not clearly prescribed by governing law, and expressly may allocate short term capital gains to income or principal regardless of governing law. Notwithstanding the foregoing, no trustee who is a beneficiary shall participate in deciding whether short-term capital gains may be allocated to principal or income. L. To arrange for the services of any public or private organization established to assist disabled persons, to monitor a beneficiary's living conditions, evaluate his or her needs, determine whether a given distribution to Claire is for her special needs, and identify available social, financial, developmental, or other programs, without diminution of compensation otherwise property payable to the trustee and to charge the expense thereof either to principal or to income partly to each (provided, however, that the trustee shall obtain approval of the Orphans' Court Division for any such charge to principal), without liability for any act or omission of any such individual or organization or for any act or omission made in reliance on the advice of such individual or organization, provided such person or organization was retained with reasonable care and prudence. M. To retain legal or professional assistance outside the expertise of the trustee in establishing, maintaining, defending, administering and 6 _ __ _ _ ___ terminating this Trust and accomplishing its purpose, without diminution of compensation otherwise property payable to the trustee and to charge the expense thereof either to principal or to income or partly to each (provided, however, that the trustee shall obtain approval of the Orphans' Court Division for any such charge to principal) and without liability for any act or omission of any such individual for any act or omission made in reliance on the advice of such individual provide such person or organization was retained with reasonable care and prudence. O. To (i) divide any trust in this Declaration into finro or more separate trusts by allocating to each such trust a proportionate share of each and every substantial interest or right that had previously been held by the trust from which those trusts were derived; and (ii) administer any addition to any such trust as a separate trust on identical terms. SEVENTH: Administrative Previsions. A. Situs. The situs of this Trust is Pennsylvania and all questions pertaining to the validity, construction, interpretation and administration of this Trust shall be determined in accordance with the laws of Pennsylvania and the applicable laws of the United States. B. Jurisdiction. This Trust shall be subject to the continuing jurisdiction of the Court of Common Pleas of Cumberland County, Pennsylvania, Orphans' Court Division. C. Additional Propertv. The trustee is expressly authorized to receive additional property from Claire or any other person and to administer and distribute it as part of this Trust, provided that no additions may be made after Claire attains age sixty-five. D. Irrevocabilitv. Except as provided in Paragraphs E and F below, this Trust shall be irrevocable. Nofinrithstanding any common law or statutory provision to the contrary, neither Claire nor any legal representative acting for Claire shall have the right to alter, amend or revoke any provision of this Trust (except as provided below), or to withdraw any funds from this Trust. E. Amendment. Trustee may amend this trust, without the approval of said Orphans' Court Division, as needed so that it conforms with 42 U.S.C. §1396p(d)(4)(A), Supplemental Security Income statutes and regulations, and any other similar or related statutes or regulations including state statutes and regulations governing public assistance eligibility, consistent with a primary goal of this Trust, which is to preserve Claire's eligibility for public assistance benefits, wherever her domicile may be located. Trustee may amend or revoke this Agreement for any other purpose with approval of said Orphans' Court Division. 7 F. Modification or Termination. In addition, anything hereinbefore to the contrary notwithstanding, the said Orphans' Court Division shall have the discretion to modify or terminate this Trust at any time for cause shown if it determines that the continuance of the Trust is impractical, uneconomical or for other reasons unwise or not it Claire's best interests. Upon any such early termination, the trustee shall first make any distribution to the state required under Item FIRST: C. above and any remaining principal and income shall be distributed to or for Claire's benefit in accordance with a Decree of the said Orphans' Court Division. G. Accrued Income. All income derived from assets received as principal of this Trust during Claire's lifetime which has accrued when such assets become subject to this Trust but which is received by the trustee thereafter, whether the same is legally principal or income, shall be applied in accordance with the provisions herein set forth for the distribution of income. EIGHTH: Fiduciary Provisions. A. The then acting Guardian of Claire's estate, with the approval of the Orphans' Court Division, may at any time remove the Trustee. There shall always be a trustee serving hereunder. B. The trustee shall have the right to resign as trustee, provided that the Orphans' Court Division approves the resignation and the appointment of an appropriate successor trustee. C. The trustee shall receive compensation for its service as trustee hereunder and may charge the expense thereof to principal without further approval of the Orphans' Court Division. D. No trustee shall be required to enter bond or other security in any jurisdiction. E. In the event that Geoffrey B. Crego for any reason shall fail or cease to act as Trustee, the Grantor hereby appoints Meghan Crego as successor Trustee. In the event that Meghan Crego for any reason shall fail or cease to act as Trustee, the Grantor hereby appoints Adam Crego as successor Trustee. 8 IN WITNESS WHEREOF, the trustee, by its proper officer, and the Court by its Order approving this Trust, a copy of which is attached, have caused this Declaration of Trust to be executed as of , the date of the aforementioned Order. WITNESS: TRUSTEE: Geoffrey B. Crego F:�scw\5054-Crego,Geoffl13327-Incompetency Petition of Claire Wong Crego\Documents\Special Needs Trust.docx 4/22/14 1:39 PM 9 EXHIBIT B CONSENT TO APPOINTMENT AS TRUSTEE I, Geoffrey B. Crego, hereby consent to serve as Trustee of the Claire Wong Crego Special Needs Trust under 42 U.S.C. § 1396p(d)(4)(a). I am an adult individual who resides at 30 North 36th Street, Camp Hill, PA 17011. Date: o�-�,5-�-�y o Geoffr .