Estate Planning

Forced Heirship – Does SSDI qualification make you a forced heir?

     There are a number of Louisiana cases that have considered petitions filed by children claiming they are forced heirs in situations where the parent has left them out of a Last Will and Testament. Many of the cases do not involve persons receiving Social Security Disability Income (SSDI), but rely on medical evidence to prove their case. The issue focused on here is whether qualification for SSDI is considered determinative of the issue of forced heirship.

Louisiana Law Provisions:

     First, for an examination of the basic rules of forced heirship in Louisiana. La. C.C. art. 1493 (A) provides that:

"A. Forced heirs are descendants of the first degree who, at the time of the death of the decedent, are twenty-three years of age or younger or descendants of the first degree of any age who, because of mental incapacity or physical infirmity, are permanently incapable of taking care of their persons or administering their estates at the time of the death of the decedent."

     Additional special provisions not discussed herein provide for the situation where a descendant of the first degree predeceased the decedent.1

     Our focus for purposes of this article will be on mental or physical disability and specifically the phrase "permanently incapable of taking care of their persons or administering their estates" and its interaction with the Social Security definition of "disability". This phrase was the subject of a 2003 amendment which added Paragraph E to La. C. C. Art. 1493, providing as follows:

"E. For purposes of this Article "permanently incapable of taking care of their persons or administering their estates at the time of the death of the decedent" shall include descendants who, at the time of death of the decedent, have, according to medical documentation, an inherited, incurable disease or condition that may render them incapable of caring for their persons or administering their estates in the future."

     It is important to note that this provision does not exclude other situations from fitting within the provision, but rather provides that it "shall include" the descendants under the circumstances outlined. It is likely that courts in the future will find other situations that fit the potential factual scenarios within the "permanently incapable" situation.

Social Security Definition of Disability:

     To avoid the intricacies of the various federal laws, the general definition from the Social Security Administration (SSA) is used for our purposes, which attempts to combine the various aspects of the federal law.2 The SSA website defines "disability" within the meaning of the Federal Regulations as follows:

"The law defines disability as the inability to do any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. To meet this definition, you must have a severe impairment(s) that makes you unable to do your past relevant work (see § 404.1560(b)) or any other substantial gainful work that exists in the national economy."

Analysis of State Forced Heirship and Federal Social Security Disability Provisions:

     To qualify for Social Security Disability Income (SSDI) one of the requirements is that you show a "medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months..." (emphasis added) . Under Louisiana law, to qualify as a forced heir you must prove that you are permanently incapable of taking care of your person or administering your estate. The requirement that the disability be permanent under Louisiana law sets forth a different time frame than that required to qualify for SSDI, but still leaves the SSDI recipient with a strong argument that should be considered by the courts in determining forced heirship status.

     As anyone that has applied for SSDI knows, it is a difficult process and often the application is initially denied, in other words, there is a relatively high standard of proof required to qualify. The difference in the statutory language highlighted above with regard to time frames seems to be one of the most important obstacles to automatic qualification of a forced heir under Louisiana law when based strictly upon a prior finding of qualification for social security disability. However, it does appear that the courts have and will continue to give some weight to the SSDI determination, depending on the findings and medical evidence within the Social Security Administration (SSA) files.

Louisiana Court Cases:

     In Stewart vs. Estate of Stewart, 966 So. 2d 1241 (La. App. 3rd Cir. 10/3/2007), the plaintiff was diagnosed with bipolar disorder, which the court found to be an incurable and inherited disease. The court also tackled the permanency requirement as it was admitted that her condition did not always present symptoms and that during certain periods she was able to lead a normal life, drive, fly by herself, shop and go to social events. The court, citing the Succession of Ardoin, 957 So. 2d 937 (La. App. 3rd Cir. 5/30/2007) found that the requirement that this be a "permanent" disability did not require that it be one which was continuously debilitating and the finding that the plaintiff was a forced heir was upheld. Stewart did not involve the issue of SSDI, but is interesting in its interpretation of what is considered permanent. Medical testimony that this was an incurable disease apparently convinced the court that the heir would have the disease for life i.e. the permanency requirement was satisfied.

     One interesting and potentially problematic aspect of the new subsection E of La. C.C. art 1493 is the phase that the "disease or condition that may render them incapable of caring for their persons or administering their estates in the future." (Emphasis Added). The finding that it "may" render the person disabled in the future seems to lower the level of proof required as to it being a permanent condition, at least under the circumstances provided for in that subsection.

     The Ardoin case had similar facts to Stewart in that the plaintiff had bipolar disorder, among other physical and mental disabilities. The plaintiff in Ardoin was receiving SSDI and the court did seem to consider this a factor in its ultimate determination that the plaintiff was a forced heir.

     In yet another Third Circuit case, Succession of Forman, CA 09-1455 (La. App. 3 Cir. 5/5/10), the facts were much weaker than in the prior cases discussed. There were two (2) plaintiffs, one of which was on SSDI and the other was apparently still employed after the death of their mother. Both were diagnosed with bipolar disorder. In considering one plaintiff's claim the court stated as follows:

" Phoebe was declared disabled by the Social Security Administration in 2006,. While this finding was based on the fact that she had Hepatitis C and Chronic Obstructive Pulmonary Disease, it was also based on the fact that she suffered from depression and anxiety disorder"

     The court in Forman seemed to place some weight on this finding of entitlement to SSDI and the specifics of why she was entitled to it, however, it appears that it was only one of the factors considered. The sibling that did continue working was also found to be a forced heir notwithstanding her work history.

Conclusion:

     Under the cases cited and a reading of the law itself, given the different standards for SSDI eligibility and forced heirship status, entitlement to SSDI will not automatically qualify a person as a forced heir. The Louisiana Supreme Court has not taken up this issue and other Circuit Courts have not expressed their opinions. The argument that SSDI qualification should at least create a presumption of qualification for forced heirship status has not been raised, however, it does appear to be a factor considered by the courts.

     Feel free to leave relevant comments or questions on this issue.

     For more information or to set up a life insurance trust or for other estate planning needs, please  contact us.  See additional comments concerning estate and income tax consequences as well as planning with life insurance trusts in the Louisiana Estate Law Forum Section under Estate Planning.

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Notes:
 Louisiana Civil Code Art. 1493 defines forced heirs as follows:

Art. 1493. Forced heirs; representation of forced heirs
A. Forced heirs are descendants of the first degree who, at the time of the death of the decedent, are twenty-three years of age or younger or descendants of the first degree of any age who, because of mental incapacity or physical infirmity, are permanently incapable of taking care of their persons or administering their estates at the time of the death of the decedent.
B. When a descendant of the first degree predeceases the decedent, representation takes place for purposes of forced heirship only if the descendant of the first degree would have been twenty-three years of age or younger at the time of the decedent's death.
C. However, when a descendant of the first degree predeceases the decedent, representation takes place in favor of any child of the descendant of the first degree, if the child of the descendant of the first degree, because of mental incapacity or physical infirmity, is permanently incapable of taking care of his or her person or administering his or her estate at the time of the decedent's death, regardless of the age of the descendant of the first degree at the time of the decedent's death.
D. For purposes of this Article, a person is twenty-three years of age or younger until he attains the age of twenty-four years.
E. For purposes of this Article "permanently incapable of taking care of their persons or administering their estates at the time of the death of the decedent" shall include descendants who, at the time of death of the decedent, have, according to medical documentation, an inherited, incurable disease or condition that may render them incapable of caring for their persons or administering their estates in the future.

2 42 U.S.C. Section 423 (d) provides as follows:

(d) "Disability" defined
(1) The term "disability" means—
(A) inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months; or
(B) in the case of an individual who has attained the age of 55 and is blind (within the meaning of "blindness" as defined in section 416 (i)(1) of this title), inability by reason of such blindness to engage in substantial gainful activity requiring skills or abilities comparable to those of any gainful activity in which he has previously engaged with some regularity and over a substantial period of time.
(2) For purposes of paragraph (1)(A)—
(A) An individual shall be determined to be under a disability only if his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy, regardless of whether such work exists in the immediate area in which he lives, or whether a specific job vacancy exists for him, or whether he would be hired if he applied for work. For purposes of the preceding sentence (with respect to any individual), "work which exists in the national economy" means work which exists in significant numbers either in the region where such individual lives or in several regions of the country.
(B) In determining whether an individual's physical or mental impairment or impairments are of a sufficient medical severity that such impairment or impairments could be the basis of eligibility under this section, the Commissioner of Social Security shall consider the combined effect of all of the individual's impairments without regard to whether any such impairment, if considered separately, would be of such severity. If the Commissioner of Social Security does find a medically severe combination of impairments, the combined impact of the impairments shall be considered throughout the disability determination process.
(C) An individual shall not be considered to be disabled for purposes of this subchapter if alcoholism or drug addiction would (but for this subparagraph) be a contributing factor material to the Commissioner's determination that the individual is disabled.

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