Rep. Glenn Thompson (R-Pa.) introduced the Special Needs Trust Fairness Act of 2013 on May 23, 2013 (H.R. 2123). According to a press release from the National Academy of Elder Law Attorneys (NAELA), the bill would allow people with disabilities to create first-party special needs trusts to hold their assets without interfering with their access to Supplemental Security Income (SSI) and Medicaid. The bill addresses a quirk in the current law defining special needs trusts that prevents mentally competent people with disabilities from establishing so-called (d)(4)(A) trusts. As the law stands today, a first-party special needs trust must be created…
Parents typically face two choices when selecting a trustee to manage a special needs trust for their child when the parents have died. One choice is a professional trustee–a bank or trust company or an individual who is in the business of serving as a trustee. Of course, professional trustees charge fees, and many banks and trust companies have a minimum trust balance requirement in order to serve as trustee. The other choice is to name a family member to serve as trustee, such as a sibling of the trust beneficiary or some other trusted family member. However, in most…
Family members often experience a feeling of accomplishment when they sign their special needs trusts (SNTs), but signing trust documents is really only the first step in reaching the ultimate goal. The SNT is just a piece of paper if the clients and their team of advisers (often a lawyer, financial adviser, and accountant) have not planned how to fund the trust. Funding the Trust-Common Alternatives Some families have sufficient assets to fund their SNT by directing their assets into the trust through their estate plans. However, even these families may be concerned about future financial setbacks or long-term illnesses…
Estate planning is never easy, if only because it means thinking about protecting your loved ones when you’re no longer around. It’s bad enough making plans to protect self-sufficient heirs who take care of themselves and an inheritance. However, it can be a real challenge when planning for heirs with special needs for a variety of personal and legal reasons. Unfortunately, as The Wall Street Journal Online recently pointed out, with the economy and politics as they are, there are new concerns to bear in mind as you plan. Both the State and federal budgets are strapped for cash and…
If you are a Baby Boomer who has worked hard, accumulated significant assets, support charitable causes, and plan to continue working through “retirement,” you are not alone! And you won’t be particularly surprised by the findings of a recently released survey by US Trust: Insights on Wealth and Worth. The survey was conducted earlier this year, with 457 high net worth and ultra high net worth individuals, with $3 million or more in investable assets. The survey found a distinct generational mindset among the wealthy – many of whom are Baby Boomers, self-made, first generation wealthy who achieved financial…
The beneficiary of a SNT has been medically approved to use medical marijuana and has her medical marijuana card. The SNT trustee wants to pay for the medical marijuana. However, while medical marijuana is legal in California, it is illegal under federal law. As I understand it, the federal government is not enforcing the law against medical marijuana in California now, but it has reserved the right to do so later. The SNT trustee has asked about the appropriateness of distributing trust assets to pay for the medical marijuana. I would advise against making any distributions to pay for medical…
Planning for a special needs child, after preparing a Special Needs Trust, is the “Letter of Intent” or Personal Needs Notebook, where the parents should provide the following information to the trustees: (1) the nature of the child’s disability; (2) emotional and financial care provided by the family; (3) persons involved with the child; (4) the child’s capabilities and limitations; (5) their likes and dislikes; (6) their behavioral quirks and nuances; (7) their daily routine; and (8) how they act with other people and in other places when the parents are not around.
In the State of Maryland, and Federal Law parents of a special needs child can set up a Supplemental (or a Special Needs) trust for their children which will not disqualify them from government benefits, such as Social Security and Medicaid. Unfortunately, prior to this protection, parents would simply disinherit their disabled children rather than see their hard earned savings be squandered to the state. Now, the child receives money from the trust for their extra needs i.e. what the state does not supply, such as vacations; special equipment; medical help that the state does not provide or supply, glasses,…
These special types of trusts allow you to supplement any government benefits to which your
loved one may be entitled, without disqualifying them from receiving those benefits.
To become a more effective advocate for your loved one with special needs: v Follow through on your instincts and investigate anything that you think may not be on the up and up. v Put it in writing and save a signed copy for your records, specifically lay out what is bothering you or your family member. The more focused you are in your letter it’s easier for the caregiver or supervisor to resolve it. v Whether your loved one lives with you, in a group home, or in a long-term care facility, you must be physically present in order…
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