Opening provisions for a First-Party Special Needs Trust Declare how the trust came to be established whether by court, parent, grandparent or guardian. Describe the nature of the trust and that it is established in accordance with state law and 42 U.S.C. § 13969(d)(4)(A). Declare that the trust is irrevocable 32
Distribution Provisions The trust should not direct that distributions be made for the support, health, or maintenance of the beneficiary. Avoid any language that could interpret the trust as a support trust. Instead distributions are to be made for the beneficiary’s special needs. 33
Give examples of special needs: Purchase of dental, rehabilitative or educational services. Items that will enrich and make the beneficiary’s life more enjoyable. Recreational opportunities. Maintenance of contact with family members. Advocacy, including personal care consultant. 34
Termination Provisions • Fees and administrative expenses may be paid during the life of the beneficiary as permitted by the trust document. • Some expenses may be paid at the individual’s death before reimbursement of medical assistance to the state. • Payment to residual beneficiaries, debts due third parties and funeral expenses may not be permitted before reimbursement of the state for medical assistance. 35
Trustee Selection Often family members become trustees, but consider whether the family member has financial experience and understands public benefits. Consider having an experienced and independent professional or corporate fiduciary serve as trustee or co-trustee. 36
Prohibition of Contributions After Age 65 • If assets are added to the trust after the beneficiary with disabilities reaches age 65, the amount added will be treated as a countable resource for SSI and Medicaid. Therefore, the trust should be drafted to expressly authorize the trustee to refuse to accept additional contributions to the trust after the beneficiary attains age 65. 37
Other common provisions Spendthrift Provisions. Qualification & Public Accountings. Grantor Trust Status. Because of the compressed tax rates for trusts and the beneficiary’s normally low marginal income tax rate, consider drafting the trust as an ‘intentionally defective’ grantor trust. 38
Drafting Third-party Special Needs Trusts • Attorneys often draft third-party SNTs for parents or grandparents who have children with disabilities. They want the child to be eligible for needs-based benefits but they want to assure that resources are available to provide and protect the child upon their death. A person may also wish to establish a trust for a surviving spouse with disabilities who may be receiving needs-based benefits. 39
In General The trust should explicitly state that the grantors (parents or grandparents) intend that the trust assets are set aside for the beneficiary’s special or supplemental needs. Avoid any language that enables someone to interpret the trust as a support trust or a discretionary trust with a support standard. 40
Purposes Clause Use it to state that trust assets are set aside for the beneficiary’s special, supplemental, or emergency needs. Provide Information about the Beneficiary – date of birth; specific disability; public benefits received. Declare that the trust is fully discretionary. 41
Non-Reduction Clause A non-reduction clause states that the trustee should only use trust funds to provide for the beneficiary without reducing or eliminating services or financial assistance for basic maintenance, support, residential, medical or dental care that the beneficiary may receive in his or her own right from any local, state or federal government agency. 42
Emergency Clause An emergency clause permits the trustee to contravene the ‘non-reduction’ principle that trust assets should not be used if they would cause loss of public benefits. The trustee is given discretion to determine the existence of an ‘emergency’ which loosely defined would arise when available public resources were so inadequate the primary needs of the beneficiary could but be met without the intervention of the trustee. 43
Day-to-Day Care Specific authority can be given in the trust for the Trustee to engage the services of a care manager. A care manager is a licensed clinical social worker, geriatric care manger or similar professional who can be hired to prepare a care- plan and monitor the plan throughout the life of the beneficiary. 44
Housing Authority should specifically be given in the trust to allow the trustee to purchase a residence. If the beneficiary resides in the home and receives SSI he or she may face a 1/3 reduction in SSI benefits based on receipt of in-kind support and maintenance. If the beneficiary receives SSDI the 1/3 reduction does not apply. 45
Trustee compensation and administrative fees • The trust should authorize the trustee to pay himself or herself reasonable compensation in accordance with express provisions in the trust or an applicable statute. The trust should contain express authority for the trustee to pay reasonable legal fees, care management fees, taxes and administrative expenses form the trust. 46
Retirement Plan Distributions • Because retirement plan accounts are frequently a significant portion of the savings of parents with children having special needs, the parents will frequently designate the third-party SNT as the beneficiary of these accounts after both parents are ceased. The drafting attorney must take caution when dealing with this issue. 47
Conduit versus Accumulation Trusts • A conduit trust, which simply passes the minimum distribution from the trust to the beneficiary, is not suitable if the beneficiary is on SSI or Medicaid because distribution from the trust will be income for eligibility determination. • If the third-party SNT is the beneficiary of the retirement plan benefits, it should be drafted as an ‘accumulation trust’. An accumulation trust permits the trustee to accumulate minimum required distribution in the trust principal and make distribution for the benefit of the disabled beneficiary in the trustee’s discretion. 48
Planning to Obtain an Annual Exclusion for Contributions to the SNT • Unlike conventional Crummey Power planning, the SNT beneficiary cannot be a recipient of the Crummey Power. The drafting attorney should instead name a person other than the SNT beneficiary such as a remainder beneficiary of the trust in order to qualify for the gift tax exclusion. 49
Remainder Beneficiaries Because there is no pay-back requirement include remainder provisions if trust assets remain after the death of the primary beneficiary. Even in the first-party trust remainder beneficiaries should be included. 50
Termination Clause • If the law changes that would make SNT assets available resources, the trustee has the power to end the trust and distribute to the remainder beneficiaries. This power should be only in the trustee. The disabled beneficiary should not have the power. 51
Bibliography Hook, Andrew H.& Smith, Sandra L., Special Needs • Trusts, Chap. 6, Elder Law In Virginia, A Handbook for Lawyers (Virginia CLE Publications, 2011). Zimring, Stuart D., Morgan, Rebecca C., Frigon, Bradley • J., Fundamentals of Special Needs Trusts (LexisNexis, 2011). Frolik, Lawrence A. & Brown, Melissa C., Advising the • Elderly or Disabled Client (RIA, 2d ed. 2006 & Supps.). Kruse, Clifton B. Jr., Third-Party and Self-Created Trusts, • Planning for the Elderly or Disabled Client (ABA 3d ed. 2002). 52
Contact Information Edward Zetlin Law Edward Zetlin 2921 A S. Woodstock Street Arlington, Virginia 22206 Tel 703-379-0442/Fax 703-379-7864 www.zetlinlaw.com 53
P ATRICIA E. K EFALAS D UDEK & A SSOCIATES 30445 Northwestern Highway, Suite 250, Farmington Hills, Michigan 48334 (248) 254-3462 , www.pekdadvocacy.com http://pattidudek.typepad.com/pattis_blog/welcome.html SPECIAL NEEDS TRUSTS BY PA TRIC IA E. KEFA LA S D UD EK
SPECIAL NEEDS TRUST • Mo re tha n 54 millio n Ame ric a ns ha ve a me nta l o r physic a l disa b ility.* • Pub lic b e ne fit pro g ra ms a re usua lly limite d to the fina nc ia lly ne e dy. • T he ke y c o mpo ne nt o f a n SNT is tha t the funds in the trust do no t disq ua lify the b e ne fic ia ry fro m pub lic b e ne fit pro g ra ms b e c a use the funds a re no t c o nside re d to b e “a va ila b le ” to the individua l. *Organization on Disability, available at www.nod.org . 55
SPECIAL NEEDS TRUST Child with a Disability (either minor or adult) • Pre se rve s Me dic a id a nd SSI e lig ib ility • Pro vide s fo r q ua lity o f life • Pro vide s fo r truste e to a c t a s a dvo c a te 56
WHY CREATE THE SPECIAL NEEDS TRUST NOW? • Po te ntia l pro te c tio n fo r a sse ts fro m lo ng -te rm c a re e xpe nse s via ne w c la rifie d e xe mpt tra nsfe r rule (PE M 405 a nd PE M 260). Ava ila b le to re c e ive a ny g ifts, pe rso na l injury • se ttle me nt, e tc . whic h ma y c o me to pe rso n with disa b ility. 57
TRUSTEE SELECTION 58
TRUSTEE REQUIREMENTS • F amily vs. Pr ofe ssional vs. Counse l • Co mple xity - SSI rule s, ta x re po rting , inve stme nt • Amo unt unde r ma na g e me nt • Co urt o ve rsig ht? Bo nd? • F a mily re la tio nship • F e e s • Co nflic t o f inte re sts • K no wle dg e a nd e xpe rie nc e • T e mpe ra me nt 59
TRUSTEE’S BALANCING ACT • Ma king distrib utio ns tha t do no t vio la te the “inc o me ” o r re so urc e rule s o f SSI , Me dic a id a nd o the r ne e ds b a se d b e ne fits; a nd • Pro viding g o o ds a nd se rvic e s to e nha nc e the b e ne fic ia ry’ s q ua lity o f life • Ac ting in the b e st inte re st o f the b e ne fic ia ry is not a lwa ys wha t the b e ne fic ia ry wa nts!! 60
QUESTIONS TO ASK OF A PROFESSIONAL TRUSTEE Bac kground • Ho w did yo u g e t invo lve d in se rving a s a pro fe ssio na l o r priva te truste e ? • Wha t is yo ur e duc a tio na l b a c kg ro und? • Wo rk e xpe rie nc e b e fo re b e c o ming pro fe ssio na l truste e ? Ho w ma ny ye a rs a s a truste e ? • Wha t kind o f trusts do yo u ma na g e ? • • Wha t kind o f insura nc e do yo u ha ve if yo ur e mplo ye e s ste a l fro m the trust? Mate r ials pr o vide d with pe r missio n fr o m Ke vin Ur batsc h, Mye r s Ur batsc h, P.C., with Patr ic ia Ke falas Dude k adding he r two c e nts wo r th. 61
QUESTIONS TO ASK OF A PROFESSIONAL TRUSTEE • Cur r e nt Administr ative Pr ac tic e s • Ho w is c o mpa ny a rra ng e d? Sta ffing ? • Who a re o the r c o nta c t pe o ple a t yo ur c o mpa ny? • Ho w ma ny trusts do yo u c urre ntly ma na g e ? • Are a ny o f the se c o urt mo nito re d? • Ha ve yo u file d a c c o unting s with the pro b a te c o urt b e fo re ? • I s the b e ne fic ia ry a b le to re vie w the re c o rds? • Ho w ma ny SNT ’ s do yo u ha ve ? • Do yo u ha ve a ny spe c ia l tra ining a s a n SNT truste e ? • Wha t se rvic e s do yo u pro vide a s truste e ? • Ho w fa milia r a re yo u with the se rvic e de live ry pro vide rs? • Do yo u o b je c t to a trust pro te c to r? 62
QUESTIONS TO ASK OF A PROFESSIONAL TRUSTEE • Inve stme nt De c isions • Ho w do yo u de te rmine inve stme nts? • Ca n the b e ne fic ia ry a ssist in the se de c isio ns? • Who pro vide s the fina nc ia l se rvic e s? Yo u o r a n o utside firm? • Wha t a re the fina nc ia l pe rso n’ s q ua lific a tio ns? • Ho w o fte n a re inve stme nt de c isio ns re vie we d? • Ca n the b e ne fic ia ry re vie w the re c o rds? • Will the trust b e a b le to ho ld re a l e sta te o r a ve hic le ? 63
QUESTIONS TO ASK OF A PROFESSIONAL TRUSTEE • Proc e dure • As truste e , ho w wo uld yo u b e g in this pro c e ss? • I s the re a b udg e t fo r distrib utio n? • Ho w o fte n is the b udg e t re vie we d? • Re que sting Distributions • Ho w wo uld the b e ne fic ia ry c o nta c t yo u fo r distrib utio n? • Wha t is the pro c e dure to de te rmine if re q ue st is wa rra nte d? • I s the re a wa y to c o nta c t yo u a fte r ho urs fo r a n e me rg e nc y? • Who ha ndle s the ma na g e me nt dutie s whe n yo u a re una va ila b le ? 64
QUESTIONS TO ASK OF A PROFESSIONAL TRUSTEE ibutions (Co nt.) • Re que sting Distr • Do e s yo ur b usine ss ha ve a suc c e ssio n pla n? • Ho w do yo u ma na g e re a l e sta te o wne d b y the trust? • F e e s • Wha t do yo u c ha rg e fo r se rvic e s? Wha t is the fe e ? • Wha t is inc lude d in the fe e ? • Are the re a dditio na l c ha rg e s fo r inve stme nts? Ho w muc h? • Are the re a dditio na l c ha rg e s fo r ta x pre pa ra tio n? • Are the re a ny o the r a dditio na l c ha rg e s (i.e ., le g a l fe e s)? 65
FUNDING THE TRUST 66
HOW TO FUND A SNT • Will • L iving trust • Gifts fro m g ra ndpa re nts a nd o the r fa mily me mb e rs • Othe r • Be ne fic ia ry de sig na tio n • 529 Pla ns • Surprise s • Se ttle me nts 67
HOW IT WORKS Housing Special Needs Trust Family Community Support Services CMH (MEDICAID WAIVER) Support Services Dept. of Community Health - formerly FIA (MEDICAID STATE PLAN) Roommate Adult Home Help Services Beneficiary 68
TRUSTEE DUTIES 69
TRUSTEE DUTIES • Duty to c a rry o ut the te rms o f the T rust Ag re e me nt. • Duty o f lo ya lty to the b e ne fic ia ry. • Duty to a c t a nd inve st prude ntly. • Duty to no t de le g a te T ruste e re spo nsib ilitie s. • Duty to ma inta in the b o o ks a nd re c o rds a nd ke e p the b e ne fic ia rie s re a so na b ly info rme d o f the T rust a dministra tio n. 70
TRUSTEE DUTIES • T stand : r uste e must unde r • T ype o f distrib utio n sta nda rd • T ype o f spe c ia l ne e ds trust a nd whe n “so le b e ne fit” rule a pplie s • T ype o f pub lic b e ne fits SNT Be ne fic ia ry re c e ive s • Be ne fic ia ry’ s c urre nt a nd future ne e ds a nd b a la nc ing the se ne e ds • Amo unt o f a sse ts he ld in the trust a nd inve stme nt a llo c a tio n • Wha t the future will ho ld a s fa r a s inve stme nt pe rfo rma nc e , b e ne fic ia ry’ s c o nditio n, pub lic b e ne fits funding , a nd ta x la w c ha ng e s 71
TRUSTEE DUTIES • T ruste e ha s to ma ke distrib utio ns tha t do no t vio la te rule s o f the a pplic a b le b e ne fit pro g ra m (typic a lly SSI a nd Me dic a id) while pro viding the b e ne fic ia ry with g o o ds a nd se rvic e s so the b e ne fic ia ry is no t living a t the po ve rty le ve l • Pa yme nt o f fo o d o r she lte r is c o unte d a nd will re duc e SSI • http:/ / www.pe kda dvoc a c y.c om/ doc ume nts/ e sta te pla nning / Dutie s_a s_T ru ste e _to_SNT .pdf • http:/ / www.pe kda dvoc a c y.c om/ wp- c onte nt/ uploa ds/ 2012/ 03/ Be ne fits_Che c klist_3- 21- 12.pdf 72
TRUSTEE REQUIREMENTS • Mic higan T r ust Code § 700.1212 • Be lo ya l • I mpa rtia l • Use b e st judg me nt a t a ll time s • No c o mming ling • Prude nt inve sto r rule ; a nd • K e e p the b e ne fic ia ry’ s se c re ts 73
TRUSTEE REQUIREMENTS • Ge ne r al Guide line s § 700.7814 • K e e p b e ne fic ia ry info rme d • Re spo nd pro mptly to b e ne fic ia ry’ s re q ue st fo r info rma tio n • Se nd c o pie s o f re le va nt te rms o f instrume nt • No tify b e ne fic ia ry a c ting a s truste e a nd pro vide c o nta c t info rma tio n (63 da ys) • No tify b e ne fic ia ry o f rig hts • No tify b e ne fic ia ry o f fe e s a nd if the y c ha ng e • Annua l a c c o unting , inve nto ry, re c e ipts, de po sits a nd distrib utio ns 74
TRUSTEE REQUIREMENTS • Judge d by the F ollowing Standar ds • Ca pa b ility a nd time to pe rfo rm • Pro pe r o ng o ing g uida nc e (le g a l, a c c o unting & fina nc ia l) • Ca re ful pre pa ra tio n a nd imple me nta tio n o f le g a l do c ume nts • Ma inta in q ua lity re c o rds a nd re po rting • Re a dy a c c e ss a nd disc lo sure o f info rma tio n • Pre pa ra tio n a nd filing o f re po rts 75
TRUST DISBURSEMENTS 76
SNT DISTRIBUTION STANDARDS T he r e ar e two c ommon SNT distr ibution standar ds: • Disc re tio na ry: T his sta nda rd g ive s the truste e a b so lute disc re tio n to ma ke (o r no t to ma ke ) distrib utio ns, e ve n tho se tha t ma y re duc e o r e limina te b e ne fic ia ry’ s pub lic b e ne fits • Supple me nta l: T his sta nda rd g ive s the truste e a b so lute disc re tio n to ma ke distrib utio ns, e xc e pt it do e s no t a llo w distrib utio ns tha t c a use a lo ss o r re duc tio n in pub lic b e ne fits 77
BEWARE THE “SUPPLEMENTAL” STANDARD Supple me ntal standar d is c ommon in olde r SNT s • No distrib utio ns a llo we d tha t ma y re duc e o r e limina te pub lic b e ne fits • T hus, pa yme nts fo r fo o d, she lte r o r me dic a l e xpe nse s c o ve re d b y g o ve rnme nt b e ne fits e xpo se truste e to po te ntia l b re a c h o f fiduc ia ry duty c la ims • So lutio n is to mo dify the e xisting trust sta nda rd to a disc re tio na ry distrib utio n sta nda rd 78
TYPE OF SNT ALSO AFFECTS SNT DISTRIBUTIONS F irst Pa rty SNT T hird Pa rty SNT • Must b e fo r the “so le • Do e s no t ha ve to b e fo r b e ne fit” o f SNT “so le b e ne fit” b e ne fic ia ry • Ma y inc lude two o r • No pa yme nts to spo use thre e c urre nt o r de pe nde nts b e ne fic ia rie s • E xc e ptio n: c hild o r • Ma y a llo w fo r g ifts to spo usa l suppo rt o rde r third pa rtie s 79
WHAT IS “SOLE BENEFIT” OF BENEFICIARY POMS SI 01120.201 de finition of “sole be ne fit” state s: • [I ]f the trust b e ne fits no o ne b ut tha t individua l, whe the r a t the time the trust is e sta b lishe d o r a t a ny time fo r the re ma inde r o f the individua l's life . • Ho we ve r, the trust ma y pro vide fo r re a so na b le c o mpe nsa tio n fo r a truste e (s) to ma na g e the trust, a s we ll a s re a so na b le c o sts a sso c ia te d with inve stme nt, le g a l o r o the r se rvic e s re nde re d o n b e ha lf o f the individua l with re g a rd to the trust. 80
EFFECT OF “SOLE BENEFIT” RULE • Pro b le ma tic whe n Be ne fic ia ry wishe s to ma ke pa yme nts to : • Childre n – e spe c ia lly mino r c hildre n • Spo use • Pa re nts • F rie nds • Sig nific a nt o the r • Ofte ntime s, the o nly wa y to ma ke pa yme nts o n b e ha lf o f c hildre n is thro ug h c hild suppo rt o rde r 81
BUYING AN AUTOMOBILE • Purc ha se o f a n a uto mo b ile (a nd e ve n distrib utio n o f the a uto mo b ile to the SNT b e ne fic ia ry) will no t a ffe c t pub lic b e ne fits e lig ib ility a s lo ng a s it is the b e ne fic ia ry's o nly a uto mo b ile , b e c a use o ne a uto mo b ile o f a ny va lue is a n e xe mpt re so urc e 82
HOLDING TITLE TO AUTOMOBILE • T itle sho uld b e he ld b y so me o ne o the r tha n SNT truste e , typic a lly a pa re nt/ c a re g ive r, a ltho ug h SNT b e ne fic ia ry c a n a lso b e title ho lde r o f o ne c a r • T ruste e o f the SNT sho uld still b e na me d a s a lie n ho lde r o n the a uto mo b ile so tha t the individua l with o wne rship c a nno t se ll o r b o rro w a g a inst the ve hic le • I f first pa rty SNT , it ma y b e prude nt to g e t a c o urt o rde r a utho rizing tha t title b e he ld in the na me o f the individua l prima rily re spo nsib le fo r using the a uto mo b ile , b e c a use the purc ha se ma y o the rwise b e c o nside re d a g ift to the individua l • Ha ve truste e o r trust na me d a s se c o nda ry insure r so truste e is no tifie d if insura nc e la pse s o r is c a nc e le d 83
PAYING FOR VACATIONS • Va c a tio ns c a n b e pa id fo r fro m a n SNT • Pa yme nt fo r ho te l a nd re sta ura nts is no t c o nside re d I SM if pe rso n is te mpo ra rily a b se nt fro m prima ry re side nc e fo r up to 30 da ys • L o g istic s c a n b e diffic ult; pre -pa id, a ll-inc lusive va c a tio ns a re e a sie st to ma na g e , o the rwise po ssib le to re imb urse c o mpa nio ns, pa y c re dit c a rd e xpe nse s b ut c a nno t re imb urse SNT b e ne fic ia ry dire c tly • I f SNT b e ne fic ia ry re q uire s a ssista nc e to tra ve l, SNT c a n pa y fo r c a re g ive r’ s time a nd e xpe nse s 84
HOW ABOUT A TREADMILL? • E xe rc ise e q uipme nt is g o o d, no t so g o o d if SNT b e ne fic ia ry c a nno t use it • One mo m re q ue ste d the purc ha se o f a tre a dmill fo r he r so n, the SNT b e ne fic ia ry. He r so n use d a whe e lc ha ir fo r mo b ility; she wa nte d re imb urse me nt fo r he r purc ha se o f the tre a dmill b e c a use she sa id he r so n wa s like Christo phe r Re e ve a nd it wa s pa rt o f his the ra py. SNT truste e a ske d fo r a pre sc riptio n, mo the r re fuse d. SNT truste e re fuse d. Co -truste e re sig ne d whe n o the r c o -truste e (Mo m) b o ug ht it a nywa y. • Re me mb e r “So le Be ne fit Rule ” 85
PURCHASING VIDEO GAMES AND CDS • Ce rta inly o k, b ut in o ne c a se : • SNT b e ne fic ia ry ke pt a sking to spe nd T ONS o f mo ne y o n b lu- ra y CDs a nd g a me s • SNT truste e wa s re a lly sta rting to think he wa s se lling the m o n the stre e t to use the mo ne y fo r o the r ite ms. T ruste e hire d a c a re ma na g e r to c he c k into it. He c o nfirme d tha t the b e ne fic ia ry ha d q uite a n e xte nsive c o lle c tio n o f g a me s a nd mo vie s in his ho me . • Be c a use o f the o ve ra ll va lue , SNT T ruste e inc re a se d the c o ve ra g e o n re nte rs’ insura nc e po lic y to c o ve r e xpe nse o f c o lle c tio n re pla c e me nt 86
PAYING FOR THE SNT BENEFICIARY’S FUNERAL • T he re is po te ntia l diffic ulty in pa ying fo r fune ra ls in a first pa rty SNT whe n the b e ne fic ia ry re c e ive s SSI • SNT truste e s ma y wish to e xplo re b e ne fic ia ry’ s tho ug hts o n b uria l a nd e nd o f life issue s • SNT truste e ma y pre -pa y fo r fune ra l (b uria l plo ts o r b uria l insura nc e o f a ny a mo unt), b ut if se ts a side mo ne y fo r b uria l, c a n o nly a dd up to $1,500 (if in b e ne fic ia ry’ s na me ) • Use irre vo c a b le pre pa id fune ra l trusts to g e t a ro und this, b ut b e c a re ful; so me fune ra l dire c to rs a re g o ing o ut o f b usine ss, so ma ke sure it is tra nsfe ra b le • Se e k c o urt o rde r 87
CAN I PURCHASE ALCOHOL OR CIGARETTES? • A c o mmo n re q ue st b y ma ny SNT b e ne fic ia rie s is fo r purc ha se o f a lc o ho l o r c ig a re tte s • T he o nly issue is whe the r suc h distrib utio ns a re c o nside re d fo o d. Do ub tful. But, e ve n if c o nside re d fo o d, it o nly a pplie s fo r SNT b e ne fic ia ry who is SSI re c ipie nt a nd the n wo uld b e I SM • Che c k the trust do c ume nt; so me T hird Pa rty SNT s spe c ific a lly pro hib it the purc ha se o f suc h ite ms • T ypic a lly, a dvise to use SSI o r SSDI mo ne y fo r the se . T ry to ha ve SNT pa y fo r ite ms tha t b e ne fic ia ry use d to ha ve to purc ha se fo r him o r he rse lf, e .g . pho ne , c le a ning ite ms, e tc . 88
LIST OF PERMISSIBLE DISTRIBUTIONS SPE IONS CIAL NE E DS T RUST L IST OF PE RMISSIBL E DIST RIBUT T he T ruste e (s) o f a Po o le d Ac c o unt T rust ma y utilize a ny o f the fo re g o ing listing fo r e xpe nditure s fro m the T rust. T he fo llo wing list o f no n-suppo rt ite ms is pro vide d fo r purpo se s o f de sc riptio n a nd sha ll no t limit the T ruste e (s) in ma king o the r distrib utio ns fo r o the r ite ms o f a me nitie s tha t the truste e ma y b e lie ve a re in the b e st inte re st o f the b e ne fic ia ry. T ho se ite ms ma y inc lude , b ut a re no t limite d to : 1. Auto mo b ile / Va n 2. Ac c o unting se rvic e s 3. Ac upunc ture / Ac upre ssure 4. Alte ra tio ns o r me nding to c lo thing – sho e re pa irs 5. Applia nc e s (T V, VCR, ste re o . Mic ro wa ve , sto ve , re frig e ra to r, wa she r/ drye r a nd ma inte na nc e / re pa irs) 6. Bo ttle d Wa te r o r wa te r se rvic e 7. Bus pa ss/ pub lic tra nspo rta tio n c o sts 8. Ca me ra , film, re c o rde r a nd ta pe s, de ve lo pme nt o f film, pho to a lb ums, sc ra pb o o ks a nd supplie s 9. Clo thing 10. Club s a nd c lub due s (re c o rd c lub s, b o o k c lub s, he a lth c lub s, se rvic e c lub s, zo o , Ad vo c a c y Gro ups, muse ums) 11. Co mpute r ha rdwa re , so ftwa re , pro g ra m, ma inte na nc e / se rvic e a . Inte rne t se rvic e 12. Co nfe re nc e s a nd tra ve l re la te d to sa me 13. Co urse s o r c la sse s (a c a de mic o r re c re a tio na l) inc luding supplie s 14. Curta ins, b linds, dra pe s a nd the like 15. De nta l wo rk no t c o ve re d b y Me dic a id, inc luding a ne sthe sia . 16. Do wn pa yme nt o n ho me o r se c urity de po sit o n a pa rtme nt. 17. Dry c le a ning a nd/ o r la undry se rvic e s a nd/ o r supplie s 18. E le c tive surg e ry 19. F itne ss e q uipme nt 20. F une ra l e xpe nse s 21. F urniture , ho me furnishing s a nd insura nc e 22. Ga so line a nd/ o r Ma inte na nc e fo r a uto mo b ile 23. Ha irc uts / Sa lo n se rvic e s 89
LIST OF PERMISSIBLE DISTRIBUTIONS 24. Ho lida y De c o ra tio ns, pa rtie s, dinne r da nc e s, ho lida y c a rds 25. Ho me a la rm a nd/ o r mo nito ring / re spo nse syste m 26. Ho me impro ve me nts, re pa irs a nd ma inte na nc e (no t c o ve re d b y Me dic a id), inc luding to o ls to pe rfo rm ho me impro ve me nts, re pa irs a nd ma inte na nc e b y ho me o wne r 27. Ho me Purc ha se (to the e xte nt no t c o ve re d b y b e ne fits) 28. Ho use c le a ning / ma id se rvic e s/ la wn se rvic e s/ sno w re mo va l 29. Inde pe nde nt Ca re Ma na g e rs/ Ca se Ma na g e rs 30. Insura nc e (a uto mo b ile , ho me a nd/ o r po sse ssio ns) 31. Insura nc e Co -Pa yme nts no t c o ve re d b y a ny o the r so urc e 32. L e g a l F e e s/ Ad vo c a c y 33. L ine ns, to we ls, b e dding a nd o the r ho use ho ld furnishing s 34. Ma ssa g e , fa c ia ls a nd o the r simila r se rvic e s/ tre a tme nts 35. Music a l instrume nts (inc luding le sso ns a nd music ) 36. No n-fo o d g ro c e ry ite ms (la undry so a p, b le a c h, fa b ric so fte ne r, de o do ra nt, dish so a p, ha nd a nd b o dy so a p, pe rso na l hyg ie ne pro duc ts, pa pe r to we ls, na pkins, kle e ne x, to ile t pa pe r, a ny ho use ho ld c le a ning pro duc ts) 37. Ove r the c o unte r me dic a tio ns (inc luding vita mins a nd he rb s, e tc .) 38. Pe rso na l Assista nc e Se rvic e s no t c o ve re d b y Me dic a id 39. Pe t a nd pe t’ s supplie s, ve te rina ry se rvic e s 40. Physic ia n spe c ia lists if no t c o ve re d b y Me dic a id 41. Priva te c o unse ling if no t c o ve re d b y Me dic a id 42. Re pa ir se rvic e s (a pplia nc e , a uto mo b ile , b ic yc le , ho use ho ld, fitne ss e q uipme nt) 43. Sno w re mo va l/ L a ndsc a ping / L a wn Se rvic e 44. Spo rting g o o ds/ e q uipme nt/ unifo rms/ te a m pic ture s/ tra ve l to g a me s/ to urna me nts 45. Sta tio na ry, sta mps, c a rds, e tc . 46. Sto ra g e Units 47. T a xi c a b 48. T e le pho ne se rvic e a nd e q uipme nt, inc luding c e ll pho ne , pa g e r, e tc . 49. T he ra py (Physic a l, Oc c upa tio na l, Spe e c h) no t c o ve re d b y Me dic a id. 50. T ic ke ts to c o nc e rts o r spo rting e ve nts (fo r b e ne fic ia ry a nd a n a c c o mpa nying c o mpa nio n) 51. T ra nspo rta tio n (a uto mo b ile , mo to rc yc le , b ic yc le , mo pe d, g a s, b us pa sse s) 52. Utility b ills (dire c t T V, c a b le T V, e le c tric , he a ting ) 53. Va c a tio n (inc luding pa ying fo r pe rso na l a ssista nc e to a c c o mpa ny the b e ne fic ia ry) 90
LIST OF PERMISSIBLE DISTRIBUTIONS 54. Sto ra g e Units 55. T a xi c a b 56. T e le pho ne se rvic e a nd e q uipme nt, inc luding c e ll pho ne , pa g e r, e tc . 57. Any the ra py (physic a l, o c c upa tio na l, spe e c h) no t c o ve re d b y Me dic a id – o r a ny o the r so urc e 58. T ic ke ts to c o nc e rts o r spo rting e ve nts (fo r b e ne fic ia ry a nd a n a c c o mpa nying c o mpa nio n, tra ve l) 59. T ra nspo rta tio n (a uto mo b ile , mo to rc yc le , b ic yc le , mo pe d, g a s, b us pa sse s a nd he lme ts) 60. Utility b ills (dire c t T V, c a b le T V, e le c tric , he a ting a s lo ng a s no t b a sic ne e ds) 61. Va c a tio n (inc luding pa ying fo r pe rso na l a ssista nc e to a c c o mpa ny the b e ne fic ia ry) http:/ / www.pe kda dvoc ac y.c om/ doc ume nts/ e sta te pla nning / Poole dAc c ountT r ustL istofPe r missible Distr ibutions.pdf 91
IMPERMISSIBLE DISTRIBUTIONS E xample s of T r ust Distr ibutions whic h will Re duc e SSI Be ne fit: • F o o d • Ba sic she lte r re la te d e xpe nse s (Bo th c o unte d a s I SM) • Ca sh fo r a ny purpo se (inc luding g a mb ling o r a dult e nte rta inme nt) om 1 st E xample s of Impe r missible Disbur se me nts fr Par ty SNT ’s: • Pa ying fo r so me thing tha t is no t fo r the so le b e ne fit o f the b e ne fic ia ry. • Pa ying fo r a se rvic e a lre a dy pa id fo r b y a no the r so urc e (duty to suppo rt is still the la w) • Distrib utio n no t in the b e st inte re st o f the b e ne fic ia ry. 92
LETTER OF INTENT 93
LETTER OF INTENT • A L of Inte nt is o ne o f the mo st impo rta nt e tte r do c ume nts a pa re nt c a n c o mple te fo r the c hild’ s future c a re -g ive rs. • T his is no t a sta nd-a lo ne do c ume nt; it sho uld b e inc o rpo ra te d into a n e sta te pla nning pro c e ss. • Ca n b e use d whe n c a ring fo r pa re nts o r g ra ndpa re nts a s we ll. 94
LETTER OF INTENT • A L e tte r o f Inte nt is a me tho d fo r the se ttlo r/ g ra nto r o f the trust to c o mmunic a te inte ntio ns re g a rding the trust b e ne fic ia ry to the truste e , suc c e sso r truste e s, o r a c o urt. It is no t a le g a lly b inding do c ume nt. Ide a lly, it sho uld inc lude pe rso na l info rma tio n a b o ut the b e ne fic ia ry tha t o nly the c re a to r kno ws. It sho uld inc lude fa c ts, ho pe s a nd dre a ms tha t the c re a to r ha s fo r the trust b e ne fic ia ry. T he re is no re q uire d fo rma t. T he L e tte r o f Inte nt sho uld pro vide the truste e with g uida nc e a s to wha t “spe c ia l ne e ds” the b e ne fic ia ry ha s o r will ha ve a nd de fine the q ua lity o f life a s q ua lity me a ns diffe re nt thing s to diffe re nt pe o ple . • T he L e tte r o f Inte nt sho uld b e fre q ue ntly upda te d a s the b e ne fic ia ry’ s ne e ds c ha ng e . An upda te d c o py sho uld a lwa ys b e ke pt with e sta te pla nning do c ume nts. 95
SAMPLES OF LETTER OF INTENT • http:/ / www.pe kda dvo c a c y.c o m/ do c ume nts/ c lie ntinta k e / L e tte ro fI nte nt.pdf • http:/ / pa ttidude k.type pa d .c o m/ pa ttis_b lo g / we lc o me .ht ml • http:/ / www.pe kda dvo c a c y.c o m/ do c ume nts/ pa ttispub li c a tio ns/ Re pre se nting / Att7.pdf • http:/ / www.pe kda dvo c a c y.c o m/ do c ume nts/ pa ttispub li c a tio ns/ Re pre se nting / Att8.pdf 96
LETTER OF INTENT • Be Specific! • E duc a tio n • Ho using with pe rso n-dire c te d suppo rts • T ra nspo rta tio n • Me dic a l c a re a nd e q uipme nt • Qua lity o f life , so c ia l, tra ve l, re c re a tio n, e tc . • Re a l e mplo yme nt 97
LETTER OF INTENT ME MORANDUM I t is my de sire tha t my disa b le d so n/ da ug hte r ______________________, re ta in re side nc e in o ur pre se nt ho me a t ____________________, Mic hig a n. He / She is c o mfo rta b le he re a nd is fa milia r with the ne ig hb o rho o d/ ne ig hb o rs a s the y a re with __________ Sinc e he / she do e s no t re a dily a da pt to c ha ng e it wo uld b e to the ir b e ne fit e spe c ia lly upo n my de a th. T he Spe c ia l Ne e ds T rust whic h I ha ve e sta b lishe d fo r _____________ is inte nde d to b e use d to ma inta in him/ he r in the fa mily ho me . Upo n my de a th it is like ly tha t ______________ will ne e d a g ua rdia n to a c t/ a dvo c a te fo r him/ he r. I re q ue st tha t pe rso n b e his/ he r b ro the r/ siste r ____________________. F o llo wing a re no te s, e c c e ntric itie s a b o ut ________________ whic h a g ua rdia n o r c a re g ive r sho uld b e a wa re o f: • Dislike s he ig hts • L ike s sho we rs a nd swimming po o ls • Dislike s unde rwe a r a nd a ny c lo thing whic h is tig ht a ro und the wa ist due to his/ he r sc o lio sis • Will “ra id” re frig e ra to r a nd c upb o a rds • Will g o o utside the ho use in nig ht c lo the s • L ike s to g o o utdo o rs in a ll type s o f we a the r with o r witho ut a ppro pria te c lo thing • Mo ve s thing s fro m pla c e to pla c e witho ut re me mb e ring whe re the y a re • Afte r fo ur ye a rs he / she sto ppe d ta king Pro za c a nd Ha ldo l in _______ • Ha s a b uria l plo t ne xt to pa re nts a t _________Ce me te ry in __________ • Ha s sa ving s a c c o unt a t _________________Ba nk a t _______________ • Dislike s c o nfine me nt o f a ny kind • Ne e ds muc h c o a xing to pa rtic ipa te in a c tivitie s – pre fe rs to b e a n o b se rve r • Re q uire s a full size b e d a nd sturdy furniture , e tc . 98
SNT DISTRIBUTION CONCLUSION • Issue s that ne e d to be c onside r e d on e ac h distr ibution • Do e s the trust do c ume nt a llo w it? • Are the re suffic ie nt funds to c o ve r it a nd to c o mply with inte nt o f trust fo r the future ne e ds o f b e ne fic ia ry? • Will it inte rfe re with pub lic b e ne fits? • I f it inte rfe re s, is it in b e ne fic ia ry’ s b e st inte re st to pa y? • Ho w will distrib utio n b e ma de ? Dire c tly/ o n- line / re imb urse me nt/ o the r 99
SNT TERMINATION ISSUES 100
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