SPECIAL NEEDS SPECIAL NEEDS U.S.C. U.S.C. 1396p(d)(4)(A) - PDF document

TRUSTS FOR THE BENEFIT OF TRUSTS FOR THE BENEFIT OF A DISABLED BENEFICIARY A DISABLED BENEFICIARY � Special Needs Special Needs “ “Payback Payback” ” Trust Trust � SPECIAL NEEDS SPECIAL NEEDS � U.S.C. U.S.C. § §1396p(d)(4)(A) 1396p(d)(4)(A) � TRUSTS TRUSTS � Third Party Special Needs Trust Third Party Special Needs Trust � Presented by Presented by Special Needs Alliance Special Needs Alliance � Also known as Supplemental Benefits Trust Also known as Supplemental Benefits Trust � for for The National Big Sky Visioning Sessions The National Big Sky Visioning Sessions and the and the 2007 United Cerebral Palsy Annual Conference 2007 United Cerebral Palsy Annual Conference Buena Vista Palace and Resort Buena Vista Palace and Resort Orlando, Florida Orlando, Florida April 12 April 12 – – 14, 2007 14, 2007 Special Needs Alliance GENERAL TRUST GENERAL TRUST Finding a Special Needs Attorney Finding a Special Needs Attorney REQUIREMENTS REQUIREMENTS � Special Needs Alliance Special Needs Alliance � Supplement, not supplant, government Supplement, not supplant, government � � benefits benefits � Network of disability and public benefits Network of disability and public benefits � attorneys. attorneys. � www.specialneedsalliance.com www.specialneedsalliance.com � � Definition of Definition of “ “special need special need” ” or or � � 1.877.572.8472 1.877.572.8472 � “ “supplemental benefit supplemental benefit” ” � No definitive explanation No definitive explanation � Special Needs Alliance Special Needs Alliance What is NOT a Special Need What is NOT a Special Need Special Needs “ Special Needs “Payback Payback” ” Trust Trust � Established with assets of disabled Established with assets of disabled � Basic necessities of life Basic necessities of life � � individual individual � i.e., food, clothing, shelter, utilities i.e., food, clothing, shelter, utilities � � Incidental spending money (unearned Incidental spending money (unearned � � Individual must be under 65 at time of the Individual must be under 65 at time of the � income) income) establishment and funding establishment and funding � Gifts Gifts � � Insurance on life of disabled beneficiary Insurance on life of disabled beneficiary � � Individual must be disabled as defined in Individual must be disabled as defined in � Social Security Act Social Security Act Special Needs Alliance Special Needs Alliance 1

SOCIAL SECURITY ACT DEFINITION OF DISABLED FOR SOCIAL SECURITY ACT DEFINITION OF DISABLED FOR DEFINITION OF “ “DISABLED DISABLED” ” CHILD UNDER 18 DEFINITION OF CHILD UNDER 18 � “ “unable to engage in any substantial, unable to engage in any substantial, � Child Child “ “suffers from any medically suffers from any medically � � gainful activity by reason of any medically determinable physical or mental gainful activity by reason of any medically determinable physical or mental determinable physical or mental impairment of comparable severity” ” to to determinable physical or mental impairment of comparable severity impairment which can be expected to impairment which can be expected to adult adult result in death or which has lasted or can result in death or which has lasted or can be expected to last for a continuous be expected to last for a continuous period of not less than twelve months” ” period of not less than twelve months Special Needs Alliance Special Needs Alliance ADDITIONAL REQUIREMENTS ADDITIONAL REQUIREMENTS PAYBACK REQUIREMENTS PAYBACK REQUIREMENTS OF PAYBACK TRUSTS OF PAYBACK TRUSTS � Trust may be established by Trust may be established by � Medicaid agency entitled to Medicaid agency entitled to � � reimbursement from any assets remaining reimbursement from any assets remaining in trust upon death of beneficiary or trust � Parent or Parent or in trust upon death of beneficiary or trust � termination for other reasons termination for other reasons � Grandparent or Grandparent or � � Legal Guardian or Legal Guardian or � � Court Court � Special Needs Alliance Special Needs Alliance Court- Court -created Special Needs created Special Needs PAYBACK REQUIREMENTS PAYBACK REQUIREMENTS Trusts Trusts � Reimbursement Reimbursement “ “dollar for dollar dollar for dollar” ” up to up to � If trust is created or authorized by court If trust is created or authorized by court � � amount paid by Medicaid on behalf of amount paid by Medicaid on behalf of may retain oversight in following areas: may retain oversight in following areas: individual individual � Accountings Accountings � � Trustee Trustee’ ’s commissions s commissions � � Investments Investments � � Limitations on Purchases of Major Assets Limitations on Purchases of Major Assets � Special Needs Alliance Special Needs Alliance 2

GOVERNMENT BENEFITS LIENS GOVERNMENT BENEFITS LIENS � SSI SSI � Medicaid Medicaid � � � Arkansas HHS v. Ahlborn, 2006 U.S. Supreme Arkansas HHS v. Ahlborn, 2006 U.S. Supreme � Medicaid Medicaid � � Court decision Court decision � SSD SSD � � Medicare Medicare � � Medicare Medicare � � State Department of Human Services State Department of Human Services � � Federally Federally- -Assisted Housing Assisted Housing � � Workers Compensation Workers Compensation � � Other Agency Supported Housing Other Agency Supported Housing � � ERISA ERISA � Special Needs Alliance Special Needs Alliance IMPORTANT! IMPORTANT! FUNDING ISSUES FUNDING ISSUES � Structured Settlements Structured Settlements � CHECK STATE REQUIREMENTS! CHECK STATE REQUIREMENTS! � � � Payments made directly to disabled Payments made directly to disabled � beneficiary may render beneficiary ineligible beneficiary may render beneficiary ineligible to receive means to receive means- -tested government benefits tested government benefits � Trust should be payee. Trust should be payee. � � Payments should Payments should “ “pour over pour over” ” into trust. into trust. � Special Needs Alliance Special Needs Alliance CHECKLIST FOR SELF CHECKLIST FOR SELF- -SETTLED SETTLED CHECKLIST FOR SELF CHECKLIST FOR SELF- -SETTLED SETTLED SPECIAL NEEDS TRUST SPECIAL NEEDS TRUST SPECIAL NEEDS TRUST SPECIAL NEEDS TRUST 1. Check for compliance with federal law. 1. Check for compliance with federal law. 2. Check for compliance with state law. 2. Check for compliance with state law. � Is the beneficiary under age 65? Is the beneficiary under age 65? 3. Verify that statutory liens have been paid Verify that statutory liens have been paid � 3. � Is the beneficiary Is the beneficiary “ “disabled? disabled?” ” prior to the funding of the trust. prior to the funding of the trust. � � Is the trust created by the beneficiary Is the trust created by the beneficiary’ ’s s � parent, grandparent, guardian or by the parent, grandparent, guardian or by the court? court? � Does the trust contain a provision requiring Does the trust contain a provision requiring � repayment of the state Medicaid program repayment of the state Medicaid program upon termination of the trust? upon termination of the trust? Special Needs Alliance Special Needs Alliance 3