6 ESTATE PLANNING
Messenger-Inquirer Friday, May 6, 2022
SPECIAL NEEDS TRUSTS: A primer BY JESSE T. MOUNTJOY, ESQ. SULLIVAN MOUNTJOY, PSC
A
Special Needs Trust (sometimes called a “SNT” or “Supplemental Needs Trust” but herein termed simply a “Trust”) is a Trust created under a testamentar y instrument (such as a person’s Last Will) or under an “Inter Vivos” (during a person’s lifetime) Trust Agreement, primarily to preser ve government (public assistance) benefits for the beneficiar y of such Trust. 1. Assets of the Trust are not counted as “countable resources” of the “disabled”
beneficiary for eligibility for means-tested public assistance benefits. The Trustee of the Trust is authorized (but not required) to makes discretionar y distributions of income and/ or principal of and from the Trust in such a manner as to not adversely af fect (i.e., disqualify) a disabled Trust beneficiar y’s eligibility for public-assistance benefits; and Assets from the Trust are then available to supplement the care and ser vices needed for the beneficiar y that are not provided by public assistance programs. 2. Public Assistance Benefits. What do we mean by public assistance benefits? Examples
to be protected by and with the Trust (and the Trustee’s discretion) include: • SSI and/or SSA; • Medicaid; • HUD/Section 8 housing allowances (in various states and sometimes local assistance programs). 3. First Party Special Needs Trust. A First Par ty (sometimes called a “Self-Settled”) Special Needs Trust is a form of a solely discretionar y, spendthrift Trust designed to preser ve a disabled person’s eligibility for public assistance benefits. The public benefits may include means tested programs where eligibility is based on financial need (such as Medicaid, Supplemental
Security Income (“SSI”) or food stamps, or even insurance programs where eligibility is based on criteria other than financial need, such as Medicare or Social Security Disability Income. The Trust must be established by a disabled beneficiar y, his or her parent, grandparent, guardian or the district cour t and can only be established for individuals under the age of 65. Any assets that remain in the Trust at the Trust beneficiar y’s death must first be used to repay Medicaid for any payments made on behalf of the beneficiar y during his or her lifetime. CONTINUED ON PAGE 8
RONALD M. SULLIVAN JESSE T. MOUNTJOY MICHAEL A. FIORELLA R. MICHAEL SULLIVAN BRYAN R. REYNOLDS MARK W. STARNES CHARLES E. MOUNTJOY L. CHRISTOPHER HUNT From the Boardroom to the Courtroom. From Personal Planning to Personal Injury.
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