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Fiduciary Duties

Supported Living Fiduciary Duties

General Fiduciary Duties when
Representative Payee is Heartland Residential Services, Inc
.

As the Representative Payee, Heartland has certain duties and obligations that it must meet under federal law. Sometimes the law requires Heartland to do things that make a lot of sense. For example, we must set up a special bank account, called a “fiduciary” account that is for the beneficiaries’ exclusive benefit. Other times, the law might not seem to make a lot of sense. For example, even though the bank account is for the beneficiaries’ exclusive benefit, he/she is not allowed to have direct access to the money.

Other duties and important information that you need to know are:

    1. Heartland must use social security payments in the beneficiary’s best interest for his or her basic current and reasonably foreseeable needs. This means that before anything else, Social Security payments have to cover the basics. These are food, shelter (which includes utilities) and clothing.

If Heartland advances money to a beneficiary for these basics it is allowed to reimburse itself from the Social Security payments. For example, if the beneficiary needs groceries, but he/she does not have the money, Heartland can advance him/her money to buy food. When his/her Social Security payment arrives at the beginning of the next month, Heartland may then reimburse itself the amount paid for food.

Any advancement must be documented by Heartland. Once a month, you will receive an accounting of all of the money received and paid out, including advances and reimbursements.

  1. Heartland must save any money left over after the beneficiary’s needs and obligations are met. If all of the basics are paid, Heartland can then pay other types of debts for the beneficiary. This might include loans, old debt, and non-essential bills, such as cable TV. If there are no other debts, Heartland will save the money for future use.
  2. Heartland must report any event that could affect the beneficiary’s entitlement to benefits. Social Security payments are based on a number of factors, one of which is employment. If a beneficiary gets a job, Heartland must report this to the Social Security Administration, because it may affect how much the beneficiary can receive. If Heartland does not report this, the Social Security Administration will typically discover the information through tax returns, and the beneficiary will have to repay any overpayment, if applicable. Often this means that large amounts are taken out of future social security payments, making things very tough financially for the beneficiary. For this reason, even though it may seem like “tattling”, it is actually in the beneficiary’s best interest for Heartland to report a client’s income accurately.
  3. Heartland must return any overpayments immediately. If Social Security accidentally deposits too much money in a beneficiary’s account, Heartland must return it immediately to avoid penalties and having money withheld from the beneficiary in future payments.
  4. Heartland must submit annual reports to Social Security on the receipt of benefits and the payment of bills. This requirement is designed to make certain that Representative Payees are doing their job and making good choices for the beneficiaries.
  5. Heartland must keep records for each beneficiary for two years, according to federal law. Holding on to records for a certain period of time is designed to help in investigations and assist any future Representative Payee. In Indiana, the required period of time to keep records is actually seven (7) years, which is must higher than the federal law. All providers, including Heartland, must meet the stricter requirement of the state.
  6. Heartland must immediately report any misuse of beneficiary funds to Social Security Administration and other authorities. This means that if Heartland discovers that an unauthorized individual spent money on items or debts that are improper, Heartland must let the Social Security Administration know about it. This is part of the federal checks and balances system to help avoid misuse of federal money or fraud.
  7. Heartland has limited authority as a Representative Payee. There are many different ways that one person can represent another. For purposes of Social Security income, if Heartland acts as a client’s Representative Payee, Heartland has certain duties and responsibilities regarding Social Security funds paid to that client. However, being a Representative Payee does not give Heartland the right or authority to handle other types of income, such as an RLA from the state. This is why Heartland asks you to sign a separate Financial Agreement. Without these specialized documents, Heartland can’t fully take care of all of a client’s financial management needs.

This also means that having a power of attorney or jointly sharing a bank account does not make a person or organization a Representative Payee for Social Security purposes. A special government form must be filled out, submitted and approved in order to have legal authority to manage a beneficiary’s Social Security income.

If you have additional questions or need further information on what Heartland may or may not do as an Organizational Representative Payee, you may wish to contact your local Social Security office, or check out the Social Security website at http://www.ssa.gov/ . Once at the website, simply type “Representative Payee” in the “search” box for a review of the law, common questions, and where to go to file a complaint or receive more information.

General Fiduciary Duties when
Representative Payee is not Heartland Residential Services, Inc.

Even when Heartland is not a client’s Representative Payee, it still has a certain amount of responsibility under state and federal law to do its best to protect a client’s property, which includes financial assets. For example, Heartland must ensure to the best of its ability that all clients who live in apartments have rental insurance to cover theft or loss of property due to fire or other disasters.

We want to make certain that you have as much information as possible regarding what Heartland can and cannot do as a service provider that is not acting as a Representative Payee and hopefully answer any questions you might have.

      1. Heartland must establish a system for protecting a client’s funds and property from misuse or misappropriation. This means that even though Heartland is not responsible for managing a client’s money or paying his or her bills it must still keep tabs on how a client is doing financially. As part of Heartland’s system of protection, its staff members are expected to report immediately if there are issues with the payment of rent, utilities, or the provision of food, household items or medicine.
      2. Heartland has an affirmative duty to report any suspected exploitation or neglect, which includes misuse of client funds or property.

“Exploitation” means:

    1. Unauthorized use of the personal services, the property or the identity of an individual; or
    2. Any other type of criminal exploitation…

For one’s own profit or advantage, or for the profit or advantage of another “Neglect” means: failure to provide supervision, training, appropriate care, food, medical care, or medical supervision to an individual.

So again, even when Heartland is not responsible for a client’s finances, it must still report any suspected misuse or mishandling of that client’s money. Depending on the circumstances, Heartland may make reports to state and federal agencies such as FSSA and CMS, the Medicaid Fraud unit of the Attorney General’s Office, Adult Protective Services and the local police department.

Although extremely rare, there are some cases that are so bad that Heartland may join in an effort to remove a guardian in order to protect the client and his or her limited financial assets.

  1. Heartland cannot pay your ward’s portion of the bills in a roommate situation. These days almost all individuals receiving support services are required to have one, and many times two, roommates. This is a requirement imposed by the state in order to help save money through the sharing of living expenses and staff services. In those situations where Heartland is responsible for the payment of bills for a roommate, but not your ward, Heartland will do the following:
  • Pay the roommate’s portion of the bill at issue (for example, the electric bill);
  • Mark on the bill how much was paid by the roommate, the check number and the date; and,
  • Forward the bill to you for payment of your ward’s portion.

You are responsible for paying the remainder of the bill in full and on time. If you dispute the amount that is owed, you must contact the Financial Department immediately. Additionally, if you make payment arrangements or in some way alter the amount that is due to a shared creditor (for example, you put the home on a flat rate plan with a utility company) you MUST tell the Financial Department as soon as possible, since such an arrangement will affect how Heartland pays the roommate’s expenses.

You need to be aware that failure to pay your ward’s portion of a bill may result in a report being filed, termination of services to your ward, and possible litigation to recover any money paid out to ensure the health, safety and well-being of your ward and his or her roommate. For example, if you fail to pay your ward’s portion of the rent and the landlord threatens eviction for failure to pay, Heartland would pay the missing rent to prevent eviction and then immediately report the matter to state and federal authorities and file a law suit to recover the money it paid out from you as the legal guardian.

On a final note, please believe that Heartland fully understands the amount of responsibility that goes with being a legal guardian and a Representative Payee, and how challenging those roles can be at times. If you have questions or concerns about any financially related matter, I can assure you we will do our very best to help. However, because Heartland is an Organizational Representative Payee, its requirements and practices will be different from yours as an individual. For this reason, I would strongly recommend that you visit the Social Security Administration’s website at http://www.ssa.gov/ . Once at the website, simply type “Representative Payee” in the “search” box for a review of the law, common questions, and where to go to file a complaint or receive more information.