1. Law school doesn’t teach the law, it teaches you how to think like a lawyer.

2. Lawyers are [insert deragatory term here].

I find truth in both of these statements but for different reasons. Law school really does teach a person to think like a lawyer…but how? And sometimes lawyers do get a bad rap, primarily because we are known to give the classic post-modern lawyer answer: “it depends.” So let’s explore this.

I love the horse races. There are no better gambling pursuits than horses and craps. There just aren’t. So of course I was excited to head out to Arlington Park this past weekend to watch the ponies run. As I was taking a look at the Arlington Park website to see what is and what is not allowed in the track, I came across this statement:

Prohibited Items Include:

-Glass Containers

-Alcohol

-Commercially packaged foods

-Liquids and non-alcoholic beverages will be allowed only in their original sealed container

I brought this to the attention of my wife and as we discussed these rules…primarliy the one disallowing commercially packaged foods…it became clear that we had completely different views on what this meant. And herein lies a perfect example to show how lawyers think.

Start with a Rule

Usually, lawyers start any analysis with a rule. A client has a problem and needs to know what to do…we need a rule to guide us. So, the problem here is I want to bring some food and drink into the racetrack, but the rules are that (1) I’m not allowed to bring in anything commercially packaged; (2) I must bring in beverages in their original packaging; and (3) no glass.

Continue with additional interpretation

The rule itself doesn’t clear up the entire issue for a few reasons. First, I’m not exactly sure what “commercially packaged” means in this context. Second, the beverage rule seems to be an exception to the rule against bringing anything into the track that is commercially packaged. If these rules were laws (as in, enacted by the legislature), there would be countless other resources I could look to that would aid my interpretation of the rule.

There would no doubt be cases upon cases where judges define the term “commercially packaged” and “beverage” and then apply those definitions to cases before them. Even these cases wouldn’t say the same thing, though. They may all use the same definitions of key terms, but many would come out in opposite places in their application of the rules to the facts at hand.

There would also likely be administrative regulations providing further guidance on these rules, written by the government agency tasked with enforcing the laws. In this case, the Department of Home-Brought Food and Beverage might make some rules also defining the terms and providing some examples for everyone to peruse.

Finally, there would be treatises and other analyses written by attorneys who practice in the home-brought food and beverage area. These resources would describe the key cases at issue and how the courts apply previous case law, regulations and their own judicial preferences in ruling on similar cases.

End by testing the rule in real life

In the end, somebody has to be the guinea pig and show up to the track with questionable materials to see how far the rule extends. Three examples:

(1) I show up with a container of hummus that I bought at the store. Seemingly, this is “commercially packaged” BUT I rip all of the labels off of the container so it now resembles a tupperware container. Is this allowed? The letter of the law says no…the hummus was commercially packaged (in that, it came straight from a manufacturer) and it’s not allowed. But does that make sense? What if I had a tupperware container that was the exact same as the container that the hummus originally came from? It would be okay if I transfer the contents of the hummus to the new container, but it is not okay if I leave it in an identical container?

(2) I show up with a glass jar of salsa. The catch here is that I enjoy the salsa as a tasty beverage (it’s the thin kind). I run afoul of the “no commercially packaged” food rule AND the rule against glass containers. However, since it’s a non-alcoholic beverage I’m required to bring my salsa into the track in its original, sealed container. Is this a rule that cannot be complied with in this case? Which rule wins? Does salsa qualify as a beverage solely because I drink it?

(3) I bring into the track 50 pizzas on dollies. The pizzas are from Dominos. The pizzas are not commercially packaged since they’re cooked and packaged at a retail location…but this obviously violates the spirit of the rules allowing food and drink. Right?

Clearly, thinking like a lawyer makes the brain hurt and/or ooze from one’s ears. But these are the types of issues lawyers are faced with everyday…makes the “it depends” answer more reasonable…I hope.

No related posts.

Special Needs Planning is concerned with balancing two competing priorities: (1) conserving assets to the extent possible; while (2) assuring that the special needs child is provided for. The two underlying rules for special needs planning are: (1) 24/7 medical care and supervision costs A LOT; and (2) Medicaid/Social Security are in the best position to pay for this type of care.

So let’s assume the following example: Ma and Pa Smith have a child named Joe who is born with Down’s Syndrome. Ma and Pa take care of Joe up through Joe’s mid-20s. At some point, Joe qualifies for Medicaid and SSI (Supplemental Security Income…disability). Joe is placed in a group home and does well, with Ma and Pa visiting often. Joe has three other siblings as well. As Ma and Pa get on in years, they realize that they will not out-live Joe and they have to decide what to do with their assets. They certainly don’t want Joe left out in the cold after they die.

The primary planning tool for situations like this is the Third-Party Discretionary Special Needs Trust. This type of trust is designed to provide for Joe if needed, while maintaining his Medicaid and SSI eligibility. See, if Ma and Pa were to simply bequeath to Joe his share of inheritance, the assets could disqualify Joe for Medicaid and SSI. Why? Becuase these assets would be considered Joe’s and now maybe he doesn’t qualify under the Medicaid needs test…unless Joe is receiving $100M or some very large amount, there is no way this inheritance can pay for Joe’s care for years to come, so these assets will have to be “spent down” (on Joe’s medical care) before he would be able to re-qualify for Medicaid.

Don’t forget rules (1) and (2).

So how does the Third Party Discretionary Special Needs Trust (“SNT”) work? Let’s assume Ma and Pa want to equally divide their assets among their children. Basically, they would take care of this in their estate plan as normal. But, Joe’s share would not go directly to him…his share would go into an SNT for his benefit. The trustee of the SNT would likely be one of Joe’s siblings, or another loved one that Ma and Pa trust. The trustee would make sure that Joe has everything he needs and could use the money in the trust to buy things for Joe that Medicaid/SSI don’t cover (perhaps a television or food or additional clothing). But, these assets are not counted as Joe’s because Joe has no right to compel the trustee to make any distributions…distributions are completely discretionary on the part of the trustee.

The assets in the trust could then be split among Joe’s siblings after Joe’s death (Joe’s life expectancy is likely much less than that of his siblings).

So there you have it…a device that can bring some security to a special needs child after the death of his or her parents…making a tough situation a little bit easier. Of course, this type of arrangement can extend to others who have or may have special needs…like elderly or infirm parents or grandparents. Anyone for whom Medicaid/SSI is a needed resource can benefit from an SNT.

Related posts:

1. Prince Harry and Estate Planning for your Kids
2. Chicago Estate Planning 101
3. Chicago Estate Planning: Revocable Living Trusts…can’t Beat It