Ballard v. Saul

Background

Shaun Marie Ballard appealed the Social Security Administration’s determination that she was no longer eligible for supplemental security income (SSI) because her resources exceeded the $2,000 limit. The agency counted Ballard’s interest in two Colorado properties held by the Buck B. Ballard Trust: farmland with several mobile homes and a parcel with a single-family home.

Ballard and her sister, Kimberly, were beneficiaries and co-trustees of the trust. Although the trust instrument provided that each sister would receive one-half of the trust property after their father’s death, no distribution had occurred, and the properties remained titled in the trust. Ballard’s counsel twice asked Kimberly to agree to liquidate the properties and distribute the proceeds. Kimberly’s attorney responded that liquidation would not be considered until the estate was closed and assets were distributed equally.

An administrative law judge (ALJ) concluded that Ballard’s inherited interest counted as a resource. The ALJ reasoned that Ballard had no legal restriction preventing her from accessing, spending, or converting the property to cash.

Court’s Analysis

The court reviewed the agency’s decision under 42 U.S.C. § 405(g), which permits review of final Social Security decisions. The court explained that property counts as an SSI resource under the agency’s guidance only if the claimant has an ownership interest, has the legal ability to access or convert it to cash, and can use it for personal support and maintenance.

The court held that Ballard satisfied the first requirement because her beneficial interest in the trust was an ownership interest. But the court concluded that she did not satisfy the second requirement. The trust’s distribution to the beneficiaries was not automatic or self-executing, and the property remained held by the trust. Because Ballard and Kimberly were both trustees, trust decisions required unanimous action. Ballard’s requests to sell the property and Kimberly’s refusal showed that unanimous action was not possible. The court therefore found that litigation would be required before Ballard could obtain a distribution or convert the property to cash.

Because the second requirement was dispositive, the court did not analyze the third requirement concerning the property’s use for Ballard’s support and maintenance.

Ruling

The court held that the ALJ’s decision was not supported by substantial evidence and that the trust-held properties were not available resources for SSI purposes. The court granted Ballard’s motion for summary judgment and denied the Commissioner’s cross-motion. It reversed the ALJ’s decision, ordered Ballard’s SSI benefits restored as of January 1, 2013, and eliminated the alleged overpayment from January 1, 2013, through January 1, 2015. The court stated that a later distribution from the trust or other changed circumstances could support a future determination that Ballard’s countable resources exceeded the SSI limit. Judge Richard Seeborg ordered that a separate judgment enter.