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…
If you serve as a trustee, whether by choice or necessity, here is a list of suggestions that may help make your job easier, and highlight a few common mistakes that I hope you will avoid once you take the helm. With this in mind: 1.Keep Receipts You may think that it goes without saying that a trustee will keep receipts, but we are continually surprised at how frequently a trustee is unable to produce any documentation which corroborates purchases made with trust funds. Often the issue arises in the context of reimbursement of expenditures the trustee has made. Here's…
You may have heard the terms "special" needs trust and "supplemental" needs trust and wondered what the difference is. The short answer is that there's no difference. Here's the long answer. When the field of special needs planning began some two decades ago, trusts created for people with disabilities were generally called supplemental needs trusts. The thinking was that the purpose of the trusts was to supplement the assistance provided by Medicaid, Medicare, Social Security, Supplemental Security Income and other public benefits programs whose level of support is meager at best. With passage of the OBRA legislation in 1993 authorizing…
Trusts fall into two basic categories: testamentary and inter vivos. A testamentary trust is one created by your will, and it does not come into existence until you die. In contrast, an inter vivos trust starts during your lifetime. You create it now and it exists during your life. There are two kinds of inter vivos trusts: revocable and irrevocable. Revocable Trusts Revocable trusts are often referred to as "living" trusts. With a revocable trust, the donor maintains complete control over the trust and may amend, revoke or terminate the trust at any time. This means that you, the donor,…
Many people think that estate plans are for someone else, not them. They may rationalize that they are too young or don't have enough money to reap the tax benefits of a plan. But as the following list makes clear, estate planning is for everyone, regardless of age or net worth. 1. Loss of capacity. What if you become incompetent and unable to manage your own affairs? Without a plan the courts will select the person to manage your affairs. With a plan, you pick that person (through a power of attorney). 2. Minor children. Who will raise your children…
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,…
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…
Whether paid directly to a disabled person, or into an ordinary trust, most gifts and inheritances and accident, workers compensation, divorce, and other litigation recoveries jeopardize government aid and even may have to repay prior benefits.
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