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  • IN THE MATTER OF THE MARTIN GUZMAN SPECIAL NEEDS TRUST SUBSTITUTED JUDGMENT/ SPECIAL NEEDS TRUST PETITION document preview
  • IN THE MATTER OF THE MARTIN GUZMAN SPECIAL NEEDS TRUST SUBSTITUTED JUDGMENT/ SPECIAL NEEDS TRUST PETITION document preview
  • IN THE MATTER OF THE MARTIN GUZMAN SPECIAL NEEDS TRUST SUBSTITUTED JUDGMENT/ SPECIAL NEEDS TRUST PETITION document preview
  • IN THE MATTER OF THE MARTIN GUZMAN SPECIAL NEEDS TRUST SUBSTITUTED JUDGMENT/ SPECIAL NEEDS TRUST PETITION document preview
  • IN THE MATTER OF THE MARTIN GUZMAN SPECIAL NEEDS TRUST SUBSTITUTED JUDGMENT/ SPECIAL NEEDS TRUST PETITION document preview
  • IN THE MATTER OF THE MARTIN GUZMAN SPECIAL NEEDS TRUST SUBSTITUTED JUDGMENT/ SPECIAL NEEDS TRUST PETITION document preview
  • IN THE MATTER OF THE MARTIN GUZMAN SPECIAL NEEDS TRUST SUBSTITUTED JUDGMENT/ SPECIAL NEEDS TRUST PETITION document preview
  • IN THE MATTER OF THE MARTIN GUZMAN SPECIAL NEEDS TRUST SUBSTITUTED JUDGMENT/ SPECIAL NEEDS TRUST PETITION document preview
						
                                

Preview

CUD Mem N DH BR WN PILES San Francisco Col KEVIN URBATSCH, SBN 168380 a AUG 1. JESSICA FARINAS, SBN 313766 Seay Oe CB a THE URBATSCH LAW FIRM, P.C. Superior Court of cA Ay 3478 Buskirk Ave, Suite 300 County of Stanislaus Pleagaivt Hill, CA 94523 Clerk of the Court Tel.: (415) 593-9944 By: Juan Medina, Deputy Fax: (925) 940-9588 . jfarinas@Urbatsch.com $200.00pd Attorneys for Martin Guzman Villalovos, Petitioner and an Interested Person “Ths ease as been assaned to Juoge Stacy P Speiller _ epartment,22 tor an purposes inelusig Tia IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF STANLISLAUS ” PTIR-20-3035 20 In re the Matter of CASE NO.: PR-20-000205 PETITION FOR ORDER ESTABLISHING THE MARTIN GUZMAN SPECIAL { SPECIAL NEEDS TRUST; SETTING BOND; AUTHORIZING INVESTMENT IN NEEDS TRUST MUTUAL FUNDS AND BONDS WITH MATURITY DATES GREATER THAN FIVE YEARS; FOR INTERIM TRUSTEE FEES; AND FOR ATTORNEYS FEES AND COSTS (Probate Code §§ 3600, 3604) DATE: April 9, 2020 TIME: 8:30 a.m. DEPT: 22 LO L INTRODUCTION 1. Petitioner, Martin Guzman, through his father, Martin Guzman Villalovos, seeks to establish a special needs trust as authorized by 42 U.S.C. §1396p(d)(4)(A) to hold the funds from his settlement. California law sets forth the procedure to establish a special needs trust with séttlement proceeds. Pursuant to California Probate Code §§3600-3613, Petitioner seeks the establishment of the Martin Guzman Special Petition to Est Scanisl Martin ish Special Needs Trust s County Superior Court aman Special Needs Trust intv Sunerior Court B 2020 Vito Deputy ClerkCond nun sk WN YE RN YN NY NY NNN eee eB ee ew He Crd nun KR wWwNH = DO we AIA DANA BRWNH eH DO Needs Trust (hereinafter referred to as the “Trust”) with Martin Guzman as the primary beneficiary. Il. FACTUAL BACKGROUND AND RELEVANT LAW . Standing. Pursuant to Probate Code §3602(d), upon petition of a guardian, conservator, or any person interested in the guardianship or conservatorship estate, the Court may order that money or property paid pursuant to a compromise or judgment may be paid to a special needs trust for the benefit of the minor or person with a disability. Petitioner Martin Guzman Villalovos is the Guardian ad Litem of Martin Guzman in the underlying lawsuit that is funding the trust at Guzman v. Commercial Install, et al., Stanislaus County Superior Court, Case Number 2027691. A copy of the Order Approving Compromise of the Claim is attached as Exhibit A. . Venue. The principal place of administration of the proposed special needs trust will be in San Francisco County as this is the county in which the Beneficiary resides and thus will be the principal place of administration of the Trust. Petitioner requests that venue be transferred to San Francisco County Superior Court for ongoing court jurisdiction. . Petitioner’s Personal Information and Disability. Martin Guzman (hereinafter referred to as “Martin” or the “Beneficiary”) is 33 years old, born on September 17, 1986. Martin was involved automobile versus pedestrian collision in which he sustained a traumatic brain injury and broken neck. In addition, Martin has been diagnosed with paranoid schizophrenia. He lives in Richmond with his mother and father. - . Underlying Lawsuit. On March 2, 2017, Martin was struck by a vehicle on East Whitmore Avenue and 6" Street in Ceres, California. A potential lawsuit was settled and the terms of the settlement were approved in the civil department of this Court. Martin will receive a net amount of approximately $227,135.07. Due to Martin’s disabling condition, he i$ receiving Medicaid, known in California as Petition to Establish Special Needs Trust Stanislaus County Superior Court Martin Guzman Special Needs Trust -2-wo On DAMN RF WN | RN NR NR KY NY NNN Ye eee ee ee oN DAA PB YW NHN EF SO eH ADA NA BRB WH eK OS Medi-Cal, and is eligible to receive Supplemental Security Income (hereinafter referred to as “SSI”) in order to meet his basic needs. Because SSI and Medi-Cal are “needs-based,” outright distribution of assets to Martin or to a conservatorship estate will result in his losing eligibility for this vital public benefit, unless the assets are directed to a qualifying special needs trust (hereinafter referred to as a “SNT”). . SSI and Medi-Cal Eligibility. The maximum cash resources an individual is permitted to retain and remain eligible for SSI and Medi-Cal is $2,000.00. See Cal. Code Reg,, tit. 22 §§50513, 50515, and 50517; 20 CFR §416.202(c)-(d). When an SSI or Medi-Cal beneficiary's cash resources exceed the resource limit, his or her benefits are suspended until the resources are spent down to below the resource limit. ACWD Letter No. 92-30 (Apr. 16, 1992); 20 CFR §416.420. . Effect of Receiving Assets. The settlement proceeds, if provided directly to Martin or to a conservatorship estate, would eliminate his eligibility for SSI or Medi-Cal because it exceeds $2,000. Martin would have to spend down the assets to below $2,000 before he would be eligible for SSI and Medi-Cal. The only way to preserve eligibility for SSI and Medi-Cal and to preserve the assets for his future needs is to direct the assets to a SNT. Such a trust is recognized under federal law in 42 U.S.C. §1396p(d)(4)(A) as a “safe harbor” trust. Without the SNT, Martin’s special needs for supportive services, supplemental medical services, and other palliative care will not be met. Thus, the establishment:of the SNT is necessary to provide for Martin’s current and future needs while maintaining his eligibility for public benefits. . Special Needs Trust Is Safe Harbor Trust. Title 42 U.S.C. §1396p(d)(4)(A) provides that funds transferred to and held in a special needs trust are an “exempt resource” for Medi-Cal if the trust meets the following criteria: A trust containing the assets of an individual under age 65 who is disabled (as defined in section 1382c(a)(3) [42 U.S.C. §1382c(a)(3)]) and which is established for such individual by the individual, parent, grandparent, legal guardian of the individual, or a Court if the State Petition to Establish Special Needs Trust Stanislaus County Superior Court Martin Guzman Special Needs Trust ~3-will receive all amounts remaining in the trust upon the death of such individual up to an amount equal to the total medical assistance paid on behalf of the individual under a State plan under this title [42 US.C. §§1396-1396v]. The SSI program applies the same criteria for exempt trusts. See 42 U.S.C. §1382b(e)(1)(5), which refers to 42 U.S.C. §1396p(d)(4)(A). A trust meeting these requirements is often referred to as a “(d)(4)(A) SNT.” 9. Relief Sought. Petitioner seeks the Court’s authority to establish an SNT for Martin. Under California law, a person with a disability is authorized to seek an order under California Probate Code §§3600-3613 to establish an SNT. California’s procedure for managing the proceeds of a compromise on a disputed claim of a minor or person with a disability can be found in Probate Code §§3602- 3613. Under these procedures, the Court may direct that the proceeds of an award for a minor or person with a disability be placed into a SNT. Probate Code §§3604, 3611. Further, as described in the preceding paragraph, federal law authorizes a person like Martin to have his assets transferred into a qualifying SNT and preserves eligibility for both SSI and Medi-Cal. Ill. THE PROPOSED SPECIAL NEEDS TRUST COMPLIES WITH ALL FEDERAL AND STATE LAW REQUIREMENTS 10.Compliance With 42 U.S.C. §1396p(d)(4)(A). The proposed SNT is to be established pursuant to the provisions of 42 U.S.C. §1396p(d)(4)(A), which states that a trust meeting certain criterion will be disregarded (considered an “exempt resource”) for purposes of determining eligibility for needs-based public benefits such as SS] and Medi-Cal. A true and correct copy of the proposed Trust is attached hereto as Exhibit B and is incorporated in this petition by reference. 1 - Proposed Beneficiary is Disabled; SNT Has Payback Provision. Martin meets the eligibility requirements of 42 U.S.C. §1396p(d)(4)(A). He is “an individual under age 65.” Martin is “disabled” as defined in 42 U.S.C. §1382c(a)(3) because he has a Petition to Establish Special Needs Trust County Superior Court wn Special Needs TrustoU ONIN DH RW DN disabling condition that is likely to remain for twelve or more months and will affect his ability to earn a living, and thus he is “disabled” for purposes of 42 U.S.C. §1396p(d)\(4)(A). Finally, the proposed trust provides, in Article Seven, that on Martin’s death or on termination of the trust, if earlier, the state Medicaid agency (in California, the Department of Health Care Services) will receive reimbursement for all medical assistance provided to him. 12. Establishment of SNT by Court. The Court is one of the entities allowed to establish an SNT under 42 U.S.C. §1396p(d)(4)(A). 13. Compliance with Probate Code §3604(b). In addition to the federal requirements, California’s procedure for managing litigation settlement proceeds of a minor or person with a disability is described in Probate Code §§3600-3613. Pursuant to Probate Code §3604(b), the Court must make the following three findings before establishing the SNT: a. That the minor or person with a disability has a disability that substantially impairs the individual’s ability to provide for the individual’s own care or custody and constitutes a substantial handicap. Martin is disabled. He has been diagnosed with paranoid schizophrenia. Martin will need care for the remainder of his life. His condition has impaired, and will impair, his ability to provide for his basic daily living needs and support for the rest of his life. b. That the minor or person with a disability is likely to have special needs that will not be met without the trust. Martin is likely to have special needs that will not be met without the trust. Without the trust in place, Martin’s special needs, which include payments for personal care assistance, supportive services, supplemental medical services, and other palliative care will not be met. Such services would be Petition to Establish Special Needs TrustCOMO NIN DH PB wWN characterized as special needs that Medi-Cal either would not pay for, or for which only limited Medi-Cal services would be available. c. That money to be paid to the trust does not exceed the amount that appears reasonably necessary to meet the special needs of the minor or person with a disability. In view of Martin’s disability and lack of other resources to pay for specialized care, the funds that will form the corpus of the trust appear reasonably necessary for Martin’s special needs. The cost of Martin’s future care is far greater than the amount of assets being funded to the SNT. For example, the cost to provide for Martin’s caregiving expenses, home costs, transportation, and other palliative care would deplete the assets very quickly. Finally, this provision of California law violates federal law. The federal statutes do not limit funds that can be placed in a trust pursuant to 42 U.S.C. §1396p(d)(4)(A) and because federal law preempts state law in this area, this portion of California’s law is unenforceable. See, Lewis v. Alexander (3" Cir 2012) 685 F.3d 325. 14.Compliance with Probate Code §3604(d) - Medi-Cal Lien. A court order under Probate Code §§3602 or 3611 for payment of money to a special needs trust shall include a provision that all statutory liens in favor of the State Department of Health Services, the State Department of State Hospitals, the State Department of Developmental Services, and any county or city and county in this state shall first be satisfied. 15. Compliance with California Rules of Court 7.903. The proposed SNT is required to and does comply with California Rules of Court 7.903(c) as follows (except for those provisions that for good cause should be waived): a. It does not contain a “no-contest” provision; see Exhibit B. Petition to Establish Special Needs Trust Stanislaus County Superior Court Martin Guzman Special Needs Trust -6-Oo ON DAH RF WN NNN NN NNN NH Bee ee ewe ewe ewe ei eX DAH PF YWNH = SO wM HIYA WA RB wWNHeHE DS oa It prohibits modification or revocation without Court approval; see Exhibit B, Article One, Section 5. It clearly identifies the trustee and any other person with authority to direct the trustee to make disbursements; see Exhibit B, Article Five. . As explained below, Petitioner requests that the Court for good cause expand the Trustee’s investment powers beyond those in Probate Code §2574 (investment powers available to guardians and conservators without Court order). It requires the persons identified in California Rules of Court 7.903(c)(3) (e.g. “trustee and any other person with authority to direct the trustee to make disbursements”) to post bond in the amount required under Probate Code §§2320-2335; see Exhibit B, Article Eight, Section 1. It requires the trustee to file accounts and reports for Court approval in the manner and frequency required by Probate Code §§1060- 1064 and 2620- 2628; see Exhibit B, Article Eight, Section 3. It requires Court approval of changes in trustees and a court ‘order appointing any successor trustee; see Exhibit B, Article Five, Section 5. . It requires that compensation of the trustee, members of any advisory committee, or the attorney for the trustee, to be in just and reasonable amounts that must be fixed and allowed by the Court. See Exhibit B, Article Eight, Section 4. 16. Authority to Invest in Mutual Funds and Bonds with Maturity Dates Greater than Five Years. Pursuant to California Rule of Court 7.903(c)(4), for good cause shown, and pursuant to Probate Code §2574(c), Petitioner requests that the investment standard set forth in Probate Code §2574(a) be modified so that the Trustee has the authority to purchase mutual funds and United States government bonds with maturity dates later than 5 years. California Rule of Court 7.903(c)(4) Peticion co Establish Special Needs Trust Stanislaus County Superior Court Martin Guzman Special Needs Trust -7-ODP wm NIN DAWA KR WN YN YN NH NNN KR BY ee ee ee eB eAIQ KDA BF wWNH KF Sow IA ADAA BRB WN ES i 17. 18. provides that the Trustee shall have the authority to make only those investments that are allowed under Probate Code §2574, ie, the guardianship and conservatorship rules. These rules do not permit investment in mutual funds or in United States government bonds with maturity dates later than 5 years unless specifically authorized by the Court. Probate Code §2574(c) provides that the guardian or conservator may seek Court authorization to make investments not otherwise permitted under that section of the Probate Code. Mutual Investments. Investment in mutual funds permits investment across several asset classes, subclasses and sectors, while avoiding high transaction costs. Thus, because they are highly diversified, mutual funds are inherently less risky than individual securities listed on an established stock or bond exchange in which a conservator may invest as authorized by Probate Code §2574(a)(3) without Court authorization. The ability to invest in mutual funds will permit the Trust to hold individual securities across several asset classes, while at the same time providing the flexibility to cost-effectively change its investment position in response to shifts in the market. Bond Investments. The ability to invest in United States government bonds with maturity dates later than 5 years will provide better diversification of investments because it will permit the investment of trust assets in more than the limited government bond funds otherwise available. To the knowledge of petitioner’s counsel, there are very few bond funds that are restricted to United States government bonds with a maturity date not later than 5 years. If investments in bonds were restricted to these few funds, it would necessarily hinder the ability ro diversify. A portfolio which includes United States government bond funds without restriction of maturity date will provide better diversification and is expected to receive higher total returns along with the minimal risk associated with such funds. Petition co Establish Special Needs Trust Stanislaus County Superior Court Martin Guzman Special Needs Trust -Be-oU ON DH BR WN IV. TRUSTEE, INTERIM FEES, AND BOND 19. Initial Trustee. Petitioner proposes that Daniel Cunnigham be named the initial Trustee of the Trust, and shall be responsible for all investments and general management. Daniel Cunnigham is a private professional fiduciary familiar with the administration of special needs trusts. A true and correct copy of the Trustee’s consent to serve is attached hereto as Exhibit C. 20. Interim Fees. Petitioner seeks authority for the Trustee to take fees on an interim basis as authorized by Rule of Court 7.903(c)(8). The amount of the fees will be based on his then currently hourly rates, now currently $145, and the hours spent. The reason interim fees are necessary is to provide monthly reliable funds to provide trustee services in a timely manner. Further, paying the trustee’s fees on an interim basis is tax efficient, because otherwise, trustee’s fees cannot be deducted to offset trust income during years there are no court accountings. The Trustee’s fees shall be confirmed by the Court during the court accountings. 21.Bond. Based on the market value of the personal property of the estate ($227,135.07), the estimated annual income to be earned ($4,542.70), and the reasonable amount for the cost of recovery on the bond ($22,713.50), rounded to the next thousand, Petitioner requests that the amount of bond be set in the amount of $255,000. Prob. Code §2320(c)(4); Calif. Rule of Court 7.207. V. NOTICE 22. Notice to Government Entities. The directors of certain state agencies are entitled to notice of the time and place of the hearing on this petition and a copy of this petition. Probate Code §3602(f). The directors of agencies entitled to notice are as follows: Department of Health Care Services, Department of State Hospitals, and Department of Developmental Services at the office of each director in Sacramento. 23.Notice. Notice of the hearing and a copy of the petition and the trust will be provided as follows: Petition co Establish Special Needs Trust Stanislaus County Superior Court Martin Guzman Special Needs Trust -9-Oo Om rXI AWE WN HY Rw NY KY NY NK NY NNN KY Be ee ewe ee ee oI A HAH BwWwN |= SO wmH IAA A RBWNH HES Martin Guzman, Beneficiary 726 22™" Street Richmond, CA 94801 Martin Guzman Villalovos, Proposed Trust Protector 726 22™ Street Richmond, CA 94801 Daniel Cunningham, Proposed Trustee PO Box 330 San Francisco, CA 94104 Piering Law Firm, Attorney in Underlying Lawsuit Attn: Robert A. Piering 775 University Avenue Sacramento, CA 95825 Department of Health Care Services, Director’s Office MS 4720, P.O. Box 997413 Sacramento, CA 95899-7413 Department of State Hospitals, Director’s Office 1600 9th Street Sacramento, CA 95814 Department of Developmental Disabilities, Director's Office 1600 9th Street Sacramento, CA 95814 VI. ATTORNEY FEES 24.Request for Authorization to Pay Petitioner’s Attorneys. During the period covered by this petition, Petitioner retained the services of Kevin Urbatsch to: a) Determine whether a First-Party Special Needs Trust is appropriate; b) Assist in identifying an appropriate trustee; c) Counsel family members and trustee(s) on establishment of Special Needs Trust, funding, administration, and distributions; d) Draft Special Needs Trust; Petition tw Establish Special Needs Trust Stanislaus County Superior Cours ‘Martin Guzman Special Needs Trust 10 =e) Draft Petition to create a special needs trust; f) Counsel family members and trustee(s) as appropriate with respect to public benefit programs that the person with disability is receiving or may be entitled to receive; g) Advise appropriate parties with respect to trust funding; and h) Assist personal injury attorney, settlor and trustee in funding the trust. The services provided by The Urbatsch Law Firm, P.C. in connection with the foregoing matters are more fully described and itemized in the Declaration in Support of the Petition to Establish the Martin Guzman Special Needs Trust, attached as Exhibit D and incorporated herein by reference. Attorney’s fees of $4,465.50 and costs of $435. Petitioner is informed and believes that such fees and costs are reasonable and customary in this community and requests Court approval for payment to The Urbatsch Law Firm, P.C. of this amount. WHEREFORE, Petitioner Martin Guzman, through his Guardian ad Litem, Martin Guzman Villalovos, prays that the Court make the following findings and orders: 1. That all notices have been given as required by law; 2. That the Court establishes the Martin Guzman Special Needs Trust and Martin Guzman Villalovos, is directed to execute on behalf of the Settlor; 3. That after payment of the personal injury Medi-Cal lien, the payment of all monies due plaintiff in the settlement shall be paid directly to the Trustee of the Martin Guzman Special Needs Trust; 4. That the Court directs that Daniel Cunningham serves as initial Trustee of the Martin Guzman Special Needs Trust with bond set in the amount of $255,000; 5. That Daniel Cunnigham is allowed to be paid on an interim basis and that the amount of the fees will be based on his then current hourly rate and hours spent, shall be reviewed by the Court with the approval of each account; Periciun co Establish Special Needs Trust Scanislaus County Superior Court juzman Special Needs Trust -1-oo ND H BF WHY VN NY NY YN DN NY YY BH eB ee eB ee ee oN RAAB HH EF So wMOA DAA KR WN HE SO . That Daniel Cunnigham is allowed to be paid on an interim basis and that the amount of the fees will be based on his then current fee schedule and shall be reviewed by the Court with the approval of each account; . That venue is transferred to San Francisco County Superior Court for ongoing jurisdiction over the Trust; . That the Trustee of the Martin Guzman Special Needs Trust file an account and report one year after establishment and every two years thereafter as required by Probate Code §§1060-1064 and 2620-2628; . That Martin Guzman has a disability that substantially impairs his ability to provide for his own care or custody, and constitutes a substantial handicap; . That Martin Guzman is likely to have special needs that will not be met without the trust; 10.That money to be paid to the Trust does not exceed the amount that appears reasonably necessary to meet Martin Guzman’s special needs; 11. That the Trustee of the Martin Guzman Special Needs Trust is authorized to invest in mutual funds and bonds with maturity dates greater than five years; 12. That the Court approve and direct the payment of $4,465.50 to The Urbatsch Law Firm, P.C., for the legal services rendered to Petitioner and payment of $435 to The Urbatsch Law Firm, P.C., for costs advanced; and 13. For such other and further orders, be issued by the Court as it may deem just and proper. Date: February 26, 2020 wtf Rn uv 7 Martin Guzmah Villalovos, Petiti . Date: February 26, 2020 i Jessica Farinas, Attorney for Petitioner Petition to Establish Special Needs Trust Stanislaus County Superior Court Martin Guzman Special Needs Trust -12-Oo ONIN HW BF WwW NY Boe ee ond DAR DN H&S 19 VERIFICATION 1, Martin Guzman Villalovos, declare that I am the Petitioner in the above-entitled matter and I declare that I have read the PETITION FOR ORDER ESTABLISHING SPECIAL NEEDS TRUST; SETTING BOND; AUTHORIZING INVESTMENT IN MUTUAL FUNDS AND BONDS WITH MATURITY DATES GREATER THAN FIVE YEARS; FOR INTERIM TRUSTEE FEES; AND-FOR ATTORNEYS FEES AND COSTS, and the requests designated therein, and know its contents. The petition is true of my own knowledge, except for the matters stated therein on my. information and belief, and as to those matters, I believe them to be true: I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed in Pleasant Hill, California. Date: February 26, 2020 L274, LEZ. Vv Martin Guzman Villalovos, Petitioner Petition to Establish Special Needs Trust Stanislaus County Superior Court Martin Guzman Special Needs Trust -13-MC-351 LRobert A. Piering, Esq. ATTORNEY OR PARTY WITHOUT ATTORNEY (Nema, Stale Ber number, and eddresa); SBN: 166858 FOR COURT USE ONLY Piering Law Firm 775 University Avenue, Sacto, CA 95825 teLePHoneno: 916 446 1944 Faxno.(optionay: 916 446 1222 _, NAIL ADORESS (Option ” ATTORNEY FOR (Namo: Petitioner SUPERIOR COURT OF CALIFORNIA, COUNTY OF Stanislaus street aporess: 801 10th Street {MALING ADRESS: cyano ze cone: Modesto, CA 95354 srancunawe: Civil CASE NAME: Guzman vs. Commercial Install, et al., ORDER APPROVING: (CASE NUMBER: C2] ComMPROMISE OF DISPUTED CLAIM 2027691 (J COMPROMISE OF PENDING ACTION [] DISPOSITION OF PROCEEDS OF JUDGMENT HEARINGDATE, any: | DEPT: [=] Minor [7 Person With a Disability 18/28/19 23 1. Petitioner (name): Martin Villalovos has petitioned for court approval of a proposed compromise of a disputed claim of a minor or a pending action involving a minor or a person with a disability or a proposed disposition of the proceeds of a Judgment for a minor or a person with a disability, Hearing a. [—) No hearing was held. The petition Is an expedited petition under rule 7.9805 of the California Rules of Court. Date: 8/27/19 Time: 8:30 opt: 23 ¢, Judicial officer: Relationship to claimant Petitioner has the following relationship or relationships to claimant (check all applicable boxes): a. Parent b, Guardian ad litem ce. (_) Guardian se d. 6. f. . (J Conservator (J Claimant, an adult person with a disability, is the petitioner. C1 other (specify): Claimant (name): a, (J tse minor. b, is a “person with a disability” within the meaning of Probate Code section 3603 who is: (1) [2] an adult. Claimant's date of birth is (specify): 9/17/86 (2) (J without a conservator. Claimant has capacity to consent to this order, within the meaning of Probate Code section 812, and has consented to this orcler. (©) [1 A conservates; a person for whom a conservator maybe appointed; or without capacity to consent to this order, within the meaning of Probate Code section 812, (2) [2] Aminor described in Probate Code section 3603(b)(3). . Defendant The claim or action to be compromised is asserted, or the judgment is entered, against (nema of settling or judgment defendant or defendants (the "payer")): Commercial Install, Inc, and Ricardo Andrade Page tof 4 Code of Gl Procedure rormasenecreuonsaeaius* ORDER APPROVING COMPROMISE OF DISPUTED CLAIMOR PENDING edichiperniys 637 N@!361 Fav. dary 1, 2010) ACTION OR DISPOSITION OF PROCEEDS OF JUDGMENT FOR cal Ful of Cou rules 3.13847. MINOR OR PERSON WITH A DISABILITY . ° “Pogo (Miscellansous)MC-351 ‘CASE NUMBER: CASE NAME: Guzman vs. Commercial Instaill, et al., 2027691 6, THE COURT FINDS that all notices raquired by law have been given, 7, THE COURT ORDERS a. The petition is granted and the proposed compromise of claim or action or the proposed disposition of the proceeds of the , Judgment is approved, The gross amount or value of the settlement or judgmentin favor of clalmant is $ b. [J] Until fusther order of the court, jurisdiction Is reserved to determine a claim fora reduction of a Medi-Cal lien under Welfare and Institutions Code section 14124.76, The amount shown payable to the Department of Health Care Services - In item 7c(1)(d) of this order is the full amount of the lien clalmed by the department but Is subject to reduction on further order of the court upon determination of the claim for reduction. c. The payer shall disburse the proceeds of the settlement or judgment approved by this order in the following manner: (1) Payment of fees and expenses Fees and expenses shall be paid by one or more checks or drafts, drawn payable to the order of the petitioner and the petitioner's attorney, if any, or directly to third parties entitled to receive payment identified in this order for the following items of expense or damage, which are hereby authorized to be paid out ofthe proceeds of the settlement or judgment: (a) Attorney's fees in the total amount of: $ 200,000.00 payable to (spscify): (b) ~) Reimbursement for medical and all other expenses paid by the patilioner or the petitioner's attorney in the total amount of: $61,594.49 (c) [2] Medical, hospital, ambulance, nursing, and other like expenses payable directly to providers as follows, in the total amount of: $ () Payee (name):Dept. of Health Care Services (A) Address: PO Box 997425, Sacramento, CA95899 (8) Amount: $ 21,270.44 (ii) Payee (name): (A) Address: (B) Amount: $ [5 Continued on Attachment 7o{1)(0). (Provide Information about additional payees In the above format.) {d) [J Other authorized disbursements payable directly to third parties in the total amount of: $ (Describe and state the amount of each tem and provide the name and address of each payee): (©) Continued on Attachment 7¢(1X¢). {e) [4] Total allowance ior fees and expenses from the settlement or judgment: $ (272,86: MO-361 Rev. Janvery*.20101 ORDER APPROVING COMPROMISE OF DISPUTED CLAIM OR PENDING Page 2ot4 ACTION OR DISPOSITION OF PROCEEDS OF JUDGMENT FOR MINOR OR PERSON WITH A DISABILITY (Miscellaneous)MC~351 CASE NAME: ‘CASE NUMBER: Guzman vs. Commercial Install, et al., 2027691 7, THE COURT ORDERS (cont.) c. The payer shall disburse the proceeds of the settlement or Judgment approved by this order in the following manner: (2) Balance The balance of the settlement or judgment available for claimant after payment of all allowed fees and expenses is; $ 227,135.07 The balance shall be disbursed as follows: (a) (J By one or more checks or drafts in the total amount of (specify): $ drawn payable to the order of the petitioner as trustee for the claimant Each such check or draft must bear an endorsement on the face or reverse that It Is for deposit in one or more interest-bearing, federally insured accounts In the name of the petitioner as trustee for the claimant, and no withdrawals may be made from the accounts except as provided In the Order to Deposit Money Into Blocked Account (form MC-365), which is signed contemporaneously with this order ("blocked account"). By the following method(s) (describe each method, including the amount to be disbursed ): The net $227,135.07 due Martin Guzman be held in trust in the Piering Law Firm attorney-client trust account. Upon approval of the special needs trust for Martin Guzman, the Plering Law Firm shall transfer the netproceeds due to Martin Guzman to the trustee of his special needs trust. 1} continued on Attachment 7o(2)(b). If money Is to be paid to a spacial needs trust under Probate Code section 3604, all statutory liens in favor of the state Department of Health Care Services, the state Department of Mental Health, the state Department of Developmental Services, and any city and county in California must first be satisfied by the following method (specify): See section 7c(1)(c) above. () [J Continued on Attachment 7o(2\(c). 8. C1 Further orders of the court concerning blocked accounts The court makes the following additional orders concerning any part of the balence ordered to be deposited in a blocked account under item 70(2)(a): a, Within 48 hours of receipt of a check or draft described in item 7o(2)(a), the petitioner and the petitioner's attorney, if any, must deposit the check or draft in the petitioner's name as trustee for the claimant in ons or more blocked accounts at (specify name, branch, and address of each depository, and the amount of each account): [1 Continued on Attachment 8a. ME-364 Rav. January 1.2010; ORDER APPROVING COMPROMISE OF DISPUTED CLAIM OR PENDING ACTION OR DISPOSITION OF PROCEEDS OF JUDGMENT FOR MINOR OR PERSON WITH A DISABILITY (Miscellaneous) Pago dofMC~3541 CASE NAME: CASE NUMBER; Guzman vs. Commercial Install, et al., 2027691 8. Further orders of the court concerning blocked accounts The court makes the following additional orders concerning any part of the balance ordered to be deposited in a blocked account under item 7¢(2)(a): b. The petitioner and the petitioner's attorney, if any, must deliver to each depository at the time of deposit three copies of ‘ the Order to Deposit Money Into Blocked Account {form MC-355), which is signed contemporaneously with this order, and three copies of the Recsipt and Acknowledgment of Order for the Deposit of Money into Blocked Account (form MC-356). The petitioner or the petitioner's attorney must file a copy of the receipt with this court within 15 days of the deposit, The sole responsibilities of the petitioner and the petitioner's attomey, if any, are to place the balance in a blocked account or accounts and to timely file a copy of the receipt. ¢, The balance of the proceeds of the settlement or judgment deposited in a blocked account or accounts under item 7c(2)(@) may be withdrawn only as follows (check (1) or (2): (1) 2] No withdrawats of principal or interest may be made from the blocked account or accounts without a further written order under this case name and number, signed by a judge, and bearing the seal of this court. The money on deposit is not subject to escheat. (2) [1] The blocked account or accounts belong to a minor. The minorwas bom on (date): . No withdrawals of principal or interest may bs made from the blocked account or accounts without a further written order under this case name and number, signed by a judicial officer, and bearing the seal of this Court, until the miner attains the age of 18 years. When the minor allains the age of 18 years, the depository, without further order of this court, is authorized and directed to pay by check or draft directly to the former minor, upon proper demand, all moneys including Interest deposited under thls order. The money on deposit Is not subject to escheat. Authorization to execute settlement documents ‘The petitioner is authorized to execute settlement documents as follows (check only one): Upon receipt of the full amount of the settlemant sum approved by this order and the deposit of funds, the petitioner is authorized and directed to execute and deliver to the payer a full, complete, and final release and discharge of any and all claims and demands of the claimant by reason of the accident or incident described in the petition and the resultant injuries to the claimant and a Proparly executed dismissal with prejudice. b. (2) The petitioner is authorized and directed to execute any and all documents reasonably necessary to carry out the terms of the settlement, c. (1 The petitioner is authorized and directed (specify): [1 Continusd on Attachment 9c, 10. Bond is [_] ordered and fixed in the amount of: $ () not required, 11, A copy of this order shall be served on the payer forthwith. 12. ] Additionat orders The court makes the following additional orders (specify): (J Continued on Attachment 12. Date: _e AUG 28 2018 “NGI OFFICER [J siowature Fowows Last aTracHMENT MO-35% (Rev. Jonvay 1,200, ORDER APPROVING COMPROMISE OF DISPUTED CLAIM OR PENDING Page dof 4 ACTION OR DISPOSITION OF PROCEEDS OF JUDGMENT FOR MINOR OR PERSON WITH A DISABILITY (Miscellaneous)EXHIBIT BMARTIN GUZMAN SPECIAL NEEDS TRUST Prepared by Kevin Urbatsch, Esq. Urbatsch Law Firm, P.C. 3478 Buskirk Avenue, Ste. 300 Pleasant Hill, CA 94523 (415) 593-9944 * Kevin@Urbatsch.com * www.UrbLaw.comTable of Contents ARTICLE ONE Establishment of Trus' Section 1: Establishment of Trust:... Section 2: Initial Trustee ... Section 3: Primary Beneficiary of the Trust is Disabled ... Section 4: Name of Trust... Section 5: Irrevocability of Trust... ARTICLE TWO Funding and Intent of the Trust Section 1: Description of Trust Estate ... Section 2: No Trust Augmentation after Beneficiary’s 65th Birthday ... Section 3: No Commingling.... Section 4: Trust Purpose ... ARTICLE THREE Distribution for Special Needs... Section 1: Distribution Standard. Section 2: Distribution Guidelines... Section 3: Distribution Methods .... Section 4: Definition of “Special Needs”... Section 5: Medicare Set Aside Arrangement Sub Trust... A. Distributions During Beneficiary's Lifetime:... B. Engagement of Experts and Consultants ARTICLE FOUR Trust Meets Public Benefit Legal Requirements .. Section 1: Medicaid or Medi-Cal... A. Not Available Property. B, Exemption from Transfer Disqualification ...Section 2: Supplemental Security Income... » A. Not an Available Resource..... B. Exemption from Transfer Disqualification .. C. Resources Otherwise Unavailable... ARTICLE FIVE Trustee Provisions .. Section 1: Initial Trustee... Section 2: Successor Trustee .. Section 3: Resignation of Trustee.... Section 4: Removal of Trustee. Section 5: Replacement of Trustee .... Section 6: Notice Requirements ARTICLE SIX Trust Protector. Section 1: Designation of Trust Protector... Section 2: Power to Remove and Appoint Trustees. Section 3: Right to Examine . Section 4: Role in Distributions... section 5: Resignation of Trust Protector . Section 6: Authority to Appoint a Successor Trust Protector... section 7: Default of a Designated Trust Protector. Section 8: Good Faith Standard Imposed ..... Section 9: No Duty to Monitor. ARTICLE SEVEN Adininistration upon Beneficiary’S Death... Section 1: Remainder Beneficiaries A. Special (or Limited) Power of Appointment... B, Distribution of Assets Not Appointed ...Section 2: Remainder Beneficiary Either a Minor or Person with a Disability..... » Section 3: Notice and Payback Provisions ... A. Notices. B. Payback Provision. ARTICLE EIGHT Trustee Powers... Section 1: Trustee Powers... Section 2: Reliance by Third Parties... Section 3: Cooperation in Obtaining and Maintaining Public Benefits... Section 4: Investment Authority ..... ARTICLE NINE General Matters Section 1: Bond ..... Section 2: Spendthrift.. Section 3: Duty to Account... Section 4: Compensation and Costs of Trustee and Attorney... Section 5: Income Tax Liability... Section 6: Choice of Law... Section 7: Severability . Section 8: Gender and Number... Section 9: Duplicate Originals...MARTIN GUZMAN SPECIAL NEEDS TRUST ARTICLE ONE ESTABLISHMENT OF TRUST SECTION 1: ESTABLISHMENT OF TRUST: This trust is established by the Stanislaus Superior Court as a special needs trust for the sole benefit of Martin Guzman, an individual with disabilities, born September 17, 1986. The trust agreement is established in accordance with the Omnibus Budget Reconciliation Act of 1993 (OBRA 1993), codified under 42 United States Code §1396p(d)(4)(A) (§1917(d)(4)(A) of the Social Security Act) as well as by the Social Security Programs Operations Manual System (POMS) POMS SI 01120.203, and in accordance with California state law as found in Probate Code §§3600-3613 and 22 California Code of Regulations §50489.9. These laws provide that an irrevocable trust meeting certain requirements may be established for the benefit of an individual with a disability and the assets directed to the trust should not be deemed to have been owned by, or to be available to, the beneficiary for public benefit eligibility purposes. Pursuant to federal law, Medicare’s interests must be considered in a personal injury award because Beneficiary is entitled to Medicare. In reasonable consideration of Medicare’s interests and to meet the criteria under Medi-Cal laws regarding the exemption of self- settled trusts from countable resources, Settlor intends to create an Irrevocable Medicare Set-Aside Subtrust as part of this trust agreement. This trust agreement is established for the specific purpose of receipt, management, and disbursement of settlement proceeds in Guzman v. Commercial Install, et al, County of Stanislaus, State of California, Case Number 2027691. The Stanislaus Court in the State of California established this trust. The Court directed that in place of delivery of the settlement assets to Martin Guzman, the assets were instead to be delivered to Daniel Cunningham in his role as Trustee of this trust and funded into this trust. The court further directed that Martin Guzman Villalovos shall execute the trust document as Settlor.SECTION 2: INITIAL TRUSTEE * Daniel Cunningham has been appointed to serve as the initial Trustee. The term “Trustee” or “Trustees” refers to the initial trustee or any successor trustee. SECTION 3: PRIMARY BENEFICIARY OF THE TRUST IS DISABLED The sole life beneficiary of the Martin Guzman Special Needs Trust will be Martin Guzman, who will be referred to as the “Beneficiary” in this document. The Beneficiary is disabled. His disability substantially affects his ability to take care of himself safely. \ SECTION 4: NAME OF TRUST For convenience, this trust shall be known as: The Martin Guzman Special Needs Trust, dated For purposes of beneficiary designations and initial transfers to the trust, the trust shall be referred to as: Daniel Cunningham , Trustee of the Martin Guzman Special Needs Trust, dated SECTION 5: IRREVOCABILITY OF TRUST This trust shall be irrevocable and not subject to amendment except on application of any interested party with the approval of a court of competent jurisdiction; provided, however, that any such amendment shall be consistent with, and in furtherance of, the purpose and intent of this trust and under applicable laws, and no amendment shall change the duties and obligations of the Trustee without its prior written consent. Further, consistent with the intent of this trust to maintain eligibility for essential public benefits, the trust may be amended in order to comply with 42 USC §1396p(d)(4)(A), or with any other state or federal law or regulation governing eligibility for essential public benefits, including any update to the POMS or other Medi-Cal provisions.Under no circumstances does the Beneficiary have the legal authority to revoke the trust and then use the funds to meet his food or shelter needs, or to direct the use of the trust principal or income for his support and maintenance under the terms of the trust. (See POMS SI 01120.200). The Beneficiary has no such right to revoke this trust under its express terms and also has no such right implied by law because: ¢ Continuation of this trust is necessary to carry out a material purpose of this trust even if the Beneficiary were sole beneficiary and attempted to revoke it (Probate Code §15403(b)); and ¢ This trust is subject to a restraint on transfer (spendthrift provision) of the Beneficiary's interest as provided by Probate Code §§15300, et seq., and, for this additional reason, may not be revoked (Probate Code §15403(b)).ARTICLE TWO FUNDING AND INTENT OF THE TRUST SECTION 1: DESCRIPTION OF TRUST ESTATE The Beneficiary is the recipient of a lawsuit settlement titled Guzman v. Commercial Install, et al, County of Stanislaus, State of California, Case Number 2027691 which is the initial funding of the trust as identified in Schedule A to this trust agreement. It is the intent of this trust agreement that the Beneficiary is the legal grantor and settlor of the trust even though the Stanislaus County Superior Court is establishing the trust. SECTION 2: NO TRUST AUGMENTATION AFTER BENEFICIARY’S 65TH BIRTHDAY Notwithstanding anything else stated in this agreement, the Trustee is directed to refuse any additions to or augmentation of the trust after the Beneficiary’s 65th birthday. This provision does not include interest, dividends, annuity payments directed to the trust that were established prior to the Beneficiary’s 65th birthday, or other earnings of trust assets received after the Beneficiary’s 65th birthday. SECTION 3: NO COMMINGLING The Trustee shall not permit any person, including the beneficiary, to commingle funds not belonging to the trust with trust property. Specifically, the Trustee shall not accept or commingle any earnings or public benefits payable to the Beneficiary. SECTION 4: TRUST PURPOSE This trust is established in conformity with the requirements of 42 U.S.C. §1396p(d)(4)(A). This trust is being established to receive the Beneficiary’s litigation assets and is to be managed for the Beneficiary’s sole benefit as set forth in this trustdocument. This section covers the general intent concerning the trust’s establishing and ongoing administration. Trust assets should be used in combination with public benefits to extend the amount of available funds to assist in paying for Beneficiary’s lifetime care. The Beneficiary has a significant and profound disability that impairs (and will impair) his ability to provide for his own care and custody. The Beneficiary receives public benefits because of his disabilities. In general, the purpose of this trust is to supplement, and not supplant the Beneficiary’s public benefits. The Beneficiary has living needs that include goods and services that public benefits may not allow or only pays for a small portion. The Beneficiary requires these goods and services to receive humane care and to maintain a level of human dignity. Trust assets should also be utilized to enhance the Beneficiary’s quality of life. This means that the Trustee in its sole and absolute discretion will determine the best options for how trust assets are to be utilized to provide the Beneficiary the highest quality of life under the unique facts and circumstances of the Beneficiary’s condition and the amount held in trust. Trust assets are to be utilized for the Beneficiary’s sole benefit. If the trust estate were to be invaded by creditors, subjected to any liens or encumbrances, or counted as available resources by public benefit programs, the trust estate would likely be depleted before the Beneficiary's death; especially because the cost of care for persons with disabilities is so high and the Beneficiary is unable to find meaningful work. The trust provisions should be interpreted considering these stated concerns and general intent.ARTICLE THREE DISTRIBUTION FOR SPECIAL NEEDS SECTION 1: DISTRIBUTION STANDARD The Trustee shall hold, administer, and distribute all property allocated to this trust, and all income therefrom, for the sole benefit of the Beneficiary during the Beneficiary's lifetime. The Trustee shall pay to or apply for the Beneficiary as much of the net income and principal, up to the whole thereof, as the Trustee in the Trustee's sole and absolute discretion considers necessary or advisable to meet the Beneficiary's special needs in order to enhance the quality of life of the Beneficiary. Any income not distributed shall be accumulated and added to principal. Because the Beneficiary is disabled, the Trustee shall, in the exercise of the Trustee's best judgment and fiduciary duty, administer this trust so as to encourage support and maintenance for the Beneficiary from all available public resources, including Supplemental Security Income (SSI), Medi-Cal, Temporary Assistance to Needy Families (TANF), Federal Social Security Disability Insurance (SSDI), In-Home Supportive Services (IHSS), Regional Center Services, Public Housing and Housing Choice Voucher Program (Section 8), and any and all successor programs, and any other appropriate federal, state, or local agency serving persons with disabilities. All references in this instrument to "Medi-Cal" shall include any other state's Medicaid program equivalent. In addition, in making distributions to or on behalf of the Beneficiary, the Trustee shall take into consideration the applicable resource and income limitations of the public benefit programs for which the Beneficiary is eligible. However, the Trustee is not bound by such limitations in making distributions if such distributions would be in the best interests of the Beneficiary as determined in the Trustee's sole and absolute discretion. Specifically, if it is in Beneficiary's best interest, as determined in the Trustee's sole and absolute discretion, the Trustee may make a distribution that results in a permanent or temporary, (partial or total) loss of Beneficiary's public benefits, (¢.g., payment of Beneficiary’s rent). Although the Trustee's responsibility to administer this trust so as to encourage payment of public benefits is an element of its fiduciary duty under the terms of this trust, the Trustee shall be exempted and held harmless from liability for failure toadminister this trust so as to allow the Beneficiary to obtain public benefits, or for loss of such benefits (partial or total), except in cases of gross negligence or willful misconduct. SECTION 2: DISTRIBUTION GUIDELINES In making any distribution from this trust, the Trustee shall, in the exercise of the Trustee’s best judgment and fiduciary duty: A. Consider any other of Beneficiary’s known or reasonably available income or resources; B. Consider all the Beneficiary’s available benefits from any government agency, such as Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI), Medi-Cal, Medicare, Section 8 (or other housing benefits), and any other public benefits for which the Beneficiary is eligible; C. Consider resource and income limitations of each public benefit program; D. Not be bound by public benefit program limitations in making distributions if such distributions would be in the best interests of the Beneficiary as determined in the Trustee's sole and absolute discretion; E. Not be obligated to or be compelled to make any payments; and F.