SSA Representative Payee Report: accounting for surplus?

[Spock]

Dear old Dad has dementia and has been in an ASL for a couple of years. He has a guardian, conservator, and a Representative Payee for SS.
His LTCI policy pays for the ASL (room, board, rehab therapy, etc), so his SS more than covers his personal care expenses (phone, TV, personal items, medical etc), resulting in a monthly surplus. We have his SS and a few small monthly pensions deposited into a conservator checking account. His other income and assets are managed through his trust accounts.

The annual SSA Representative Payee Report asks how much of his SS benefit was saved (Line 3D), how we are saving it (type of account), and how those accounts are titled (Line 4A and 4B). If any boxes labeled "other" are checked, lines 5A and 5B have to be filled out (and the boxes on the form are way to small for one legalese title, much less if all accounts were listed).

Normally I would sweep conservator surpluses into his higher return trust accounts (mostly CDs and USTs with a cash reserve in FDRXX) to save for the day when his LTCI implodes. The lawyers want as much of his estate kept in the trust as possible with the conservator account pulling funds from the trust when necessary (this is how his money was managed before the conservatorship/guardianship).

If I were to sweep SS surpluses into his trust account, it appears we would need to document ALL of the accounts titled in the name of the trust as the money sloshes wherever the best rates are.

I'm looking for suggestions on how to keep both the SSA (disclose it all?) and the lawyers (keep it firewalled) happy.
How does anybody else with a somewhat complicated estate handle SS surpluses in the SSA payee report?
Do you have to keep all SS surpluses in an isolated separate account? Or can you co-mingle the funds without a bunch of addendums to the payee report documenting all of the CDs, USTs, and other titled accounts?

 

[pb4uski]

I assume that his SS is deposited into the conservator account? If so, then the amount saved would be his SS less his personal care expenses (?) and it would be into the conservator checking account.

I would not sweep money from the conservator account into the trust account and i would not co-mingle funds. Transfers between the trust accounts and conservator account should be one-way... from trust account to conservator account. This will also make the conservator accounting and reporting easier. If the drag bothers you, you might set up another conservator account that earns interest. For example, if you had a brokerage account and checking account that were both conservator accounts at Schwab, you could the invest excess funds in a money market fund or other in the brokerage account and combne the two conservator accounts when you do your conservator accounting.

Perhaps you could consider the transfers from the trust to the conservator account to be "loans" and then pay back the trust if/when the conservator account has available funds. I'd have to think about that one and it woud depend on the wording of the trust.

 

[Spock]

I assume that his SS is deposited into the conservator account? If so, then the amount saved would be his SS less his personal care expenses (?) and it would be into the conservator checking account.

I would not sweep money from the conservator account into the trust account and i would not co-mingle funds. Transfers between the trust accounts and conservator account should be one-way... from trust account to conservator account. This will also make the conservator accounting and reporting easier. If the drag bothers you, you might set up another conservator account that earns interest. For example, if you had a brokerage account and checking account that were both conservator accounts at Schwab, you could the invest excess funds in a money market fund or other in the brokerage account and combne the two conservator accounts when you do your conservator accounting.

Perhaps you could consider the transfers from the trust to the conservator account to be "loans" and then pay back the trust if/when the conservator account has available funds. I'd have to think about that one and it woud depend on the wording of the trust.

Thanks.

The conservator account builds at a significant amount per month. The lawyers concerns are that the conservator account will have to eventually be probated vs. the trust and the larger the amount of conservator assets, the higher the annual premium on the conservator bond.

As far as opening new conservator accounts, it took us over a year and 4 institutions to get one checking account open. It's amazing how obtuse legal depts can be given that dementia is so prevalent. We provide court orders and they still demand to speak with the dementia patient to get their OK.

Oh well. I guess.

 

[pb4uski]

Can you make the trust the beneficiary of the conservator account to avoid the posibiity of the conservator account needing to be probated?

Or alternatively, periodically request court approval to transfer excess funds from conservator account to the trust?

Does you state have small estate exceptions from probate and if so, can you manage the conservator account to stay under the exemption amount?

 

[Spock]

Those are good suggestions. Thanks.

It's been years since the account was setup, so I'll have to double check... but I think Wells Fargo does not allow beneficiaries (POD/TOD) on conservator accounts. But we'll definitely schedule an appointment with the bank to find out (nothing on their website).

The current account balance is about 50% of the state probate exemption ceiling. Rough estimate is the account will cross the threshold in just over 10 months.

The whole process of protecting a wards assets is so complicated it feels like the drowning victim is fighting off the lifeguard.