SPECIAL NEEDS TRUSTS FOR LEGAL SERVICES ATTORNEYS

Transcription

1 SPECIAL NEEDS TRUSTS FOR LEGAL SERVICES ATTORNEYS

2 DEFINITIONS Grantor (also sometimes called a Settlor or Trustor): The person who establishes the trust. This person often, though not always, is also the person putting assets into the trust. Trustee: The person who manages the trust assets and administers the trust provisions. Beneficiary: The person for whose benefit the trust is established. Revocable Trust: A trust that can be altered or terminated. Irrevocable Trust: A trust that cannot be altered or terminated.

3 SPECIAL NEEDS TRUSTS Special Needs Trusts are designed for beneficiaries with some type of limitation. Beneficiaries of Special Needs Trusts often receive some type of disability related public benefit (e.g., SSI or Medicaid). Sometimes trusts are established for individuals who have limitations that do not qualify for public benefits (e.g., addiction or developmental disability that does not rise to level of an SSA listing).

4 TYPES OF SPECIAL NEEDS TRUST Self-Settled Special Needs Trust Established by someone on the beneficiary s behalf Funded with the beneficiary s funds Often called a d4a trust after 42 USC 1396p(d)(4)(A) Must contain pay-back provision to State Medicaid program upon beneficiary s death for any benefits paid on beneficiary s behalf Settlor can determine remainder beneficiaries if any assets remain after state is paid Should contain restrictive distribution language so that trustee cannot make distributions that would negatively impact beneficiary s public benefits

5 TYPES OF SPECIAL NEEDS TRUST Pooled Special Needs Trust Established by the beneficiary or someone on his or her behalf Funded with the beneficiary s funds Assets are pooled for investment purposes with other beneficiary s assets Trust is established and managed by a non-profit association Upon beneficiary s death, non-profit can retain assets to benefit other individuals with disabilities If not retained by non-profit, remainder distributed to State Medicaid program to repay any benefits paid on beneficiary s behalf Often called a d4c trust after 42 USC 1396p(d)(4)(C)

6 TYPES OF SPECIAL NEEDS TRUST Third-Party Special Needs Trust Established by someone other then the beneficiary Funded with assets than never belonged to the beneficiary No Medicaid pay-back provisions are necessary May contain restrictive distribution language so that trustee cannot make distributions that would negatively impact beneficiary s public benefits, depending upon the beneficiary s impairments Usually used to hold inheritance or gifts, but requires prior planning

7 WHEN WILL YOU ENCOUNTER SNTS? Client s SSI has been reduced or terminated Client has been assessed an overpayment for SSI Client s has been assessed a spenddown for assets held in a d4a or d4c trust

8 AVENUES FOR ADVOCACY Appeal reduction, termination or overpayment Obtain a review of d4a trust from DHS attorney to verify compliance with relevant statutes and regulations Obtain the approval letter for a d4c master trust from trustee and copy of subscription statement for client Review distributions made from the trust to client Educate trustee of distribution restrictions and consequences on client s public benefits

9 RELEVANT SSA REGULATIONS Income Definitions and How We Count Income General 20 CFR Earned Income 20 CFR Unearned Income 20 CFR In-Kind Support and Maintenance 20 CFR Deeming of Income 20 CFR

10 RELEVANT SSA REGULATIONS Resources Definitions and How We Count Resources General 20 CFR Deeming of resources 20 CFR Deeming of resources of an essential person 20 CFR Deeming of resources where Medicaid eligibility is affected 20 CFR a Limitation on resources 20 CFR Resources determinations 20 CFR How funds held in financial institution accounts are counted 20 CFR

11 RELEVANT SSA REGULATIONS Resources Continued Exclusion from resources; general 20 CFR Exclusion of the home 20 CFR Exclusion of household goods and personal effects 20 CFR Exclusion of the automobile 20 CFR Exclusion of life insurance 20 CFR Burial spaces and certain funds set aside for burial expenses 20 CFR

12 RELEVANT SSA POMS SI General - Income Rules for the Supplemental Security Income Program SI What Is Not Income SI Earned Income SI Unearned Income SI Unearned Income Anderson Case SI Living Arrangements and In-Kind Support and Maintenance

13 RELEVANT MEDICAL ASSISTANCE REGULATIONS 89 IL ADMIN CODE SECT. 120 Subpart C: Financial Eligibility Determination Section Community Cases Section Long Term Care Section MANG(P) Cases Subpart H: Medical Assistance No Grant (MANG) Eligibility Factors Section Unearned Income Section Budgeting Unearned Income Section Exempt Unearned Income Section Education Benefits Section Incentive Allowance Section Unearned Income In-Kind Section Child Support and Spousal Maintenance Payments Section Earmarked Income Section Medicaid Qualifying Trusts Section Treatment of Trusts and Annuities (EMERGENCY - 36 Ill.Reg ) Section Lump Sum Payments and Income Tax Refunds Section Protected Income Section Earned Income Section Budgeting Earned Income Section Exempt Earned Income Section Earned Income Disregard - MANG(C) Section Earned Income Exemption Section Exclusion from Earned Income Exemption

14 RELEVANT MEDICAL ASSISTANCE REGULATIONS 89 IL ADMIN CODE SECT. 120 Section Recognized Employment Expenses Section Income From Work/Study/Training Programs Section Earned Income From Self-Employment Section Earned Income From Roomer and Boarder Section Earned Income from Temporary Employment with the Census Bureau Section Earned Income In- Kind Section Payments from the Illinois Department of Children and Family Services Section Provisions for the Prevention of Spousal Impoverishment (EMERGENCY - 36 Ill.Reg ) Section Resources (EMERGENCY - 36 Ill.Reg ) Section Exempt Resources (EMERGENCY - 36 Ill.Reg ) Section Resource Disregard Section Deferral of Consideration of Assets Section Spenddown of Resources Section Factors Affecting Eligibility for Long Term Care Services (EMERGENCY - 36 Ill.Reg ) Section Property Transfers Occurring On or Before August 10, 1993 Section Property Transfers Occurring On or After August 11, 1993 and Before January 1, 2007 Section Property Transfers Occurring On or After January 1, 2007

15 RELEVANT AABD REGULATIONS 89 IL ADMIN CODE SECT. 113, SUBPART C Section Unearned Income Section Budgeting Unearned Income Section Budgeting Unearned Income of Applicants Receiving Income on Date of Application And/Or Date of Decision Section Initial Receipt of Unearned Income Section Termination of Unearned Income Section Unearned Income In-Kind Section Earmarked Income Section Lump-Sum Payments and Income Tax Refunds Section Protected Income Section Earned Income Section Exempt Unearned Income Section Budgeting Earned Income of Applicants Section Initial Employment Section Budgeting Earned Income For Contractual Employees Section Budgeting Earned Income For Non-contractual School Employees Section Termination of Employment Section Exempt Earned Income Section Recognized Employment Expenses

16 RELEVANT AABD REGULATIONS 89 IL ADMIN CODE SECT. 113, SUBPART C Section Income From Work/Study/Training Programs Section Earned Income From Self-Employment Section Earned Income From Roomer and Boarder Section Earned Income From Rental Property Section Earned Income In- Kind Section Payments from the Illinois Department of Children and Family Services Section Assets Section Exempt Assets Section Asset Disregard Section Deferral of Consideration of Assets Section Property Transfers For Applications Filed Prior To October 1, 1989 (Repealed) Section Property Transfers For Applications Filed On Or After October 1, 1989 (Repealed) Section Court Ordered Child Support Payments of Parent/Step-Parent Section Responsibility of Sponsors of Non-citizens Entering the Country Prior to 8/22/96 Section Responsibility of Sponsors of Non-citizens Entering the Country On or After 8/22/96 Section Assignment of Medical Support Rights

17 RELEVANT SNAP REGULATIONS 89 IL ADMIN CODE SECT. 121 Subpart C: Financial Factors Of Eligibility Section Unearned Income Section Exempt Unearned Income Section Unearned Income In- Kind Section Lump Sum Payments and Income Tax Refunds Section Earned Income Section Budgeting Earned Income Section Exempt Earned Income Section Income From Work/Study/Training Programs Section Earned Income from Roomers or Boarders Section Income From Rental Property Section Earned Income In-Kind Section Sponsors of Aliens Section Assets Section Exempt Assets Section Asset Disregards Subpart D: Eligibility Standards Section Net Monthly Income Eligibility Standards Section Gross Monthly Income Eligibility Standards Section Income Which Must Be Annualized Section Deductions from Monthly Income Section Food Stamp Benefit Amount Subpart E: Household Concept Section Categorically Eligible Households

18 RELEVANT HOME SERVICES REGULATIONS 89 IL ADMIN CODE SECT. 682 SUBPART C: FINANCIAL ELIGIBILITY CRITERIA Section Assets Limitation Section Transfer of Assets Section Exempt Assets Section Assets Held in Joint Ownership

19 RELEVANT TANF REGULATIONS 89 IL ADMIN CODE SECT. 112, SUBPART G Section Unearned Income Section Unearned Income of Parent, Section Budgeting Unearned Income Section Budgeting Unearned Income of Applicants Section Initial Receipt of Unearned Income Section Termination of Unearned Income Section Exempt Unearned Income Section Incentive Allowances Section Unearned Income In-Kind Section Earmarked Income Section Lump-Sum Payments Section Earned Income Section Earned Income Tax Credit Section Budgeting Earned Income Section Budgeting Earned Income of Employed Applicants Section Initial Employment Section Budgeting Earned Income For Contractual Employees

20 RELEVANT TANF REGULATIONS 89 IL ADMIN CODE SECT. 112, SUBPART G Section Budgeting Earned Income for Non-contractual School Employees Section Termination of Employment Section Exempt Earned Income Section Earned Income Exemption Section Exclusion from Earned Income Exemption Section Recognized Employment Expenses Section Income from Work- Study and Training Programs Section Earned Income From Self-Employment Section Earned Income From Roomer and Boarder Section Income From Rental Property Section Payments from the Illinois Department of Children and Family Services Section Earned Income In- Kind Section Assets Section Exempt Assets Section Asset Disregards Section Deferral of Consideration of Assets Section Income Limit Section Assets for Independence Program

21 RELEVANT PM AND WAG PROVISIONS TANF Assets PM to PM WAG to WAG TANF Income PM to PM c WAG to WAG c AABD Cash Assets PM to PM b WAG to WAG b AABD Cash Income PM to PM c WAG to WAG c

22 RELEVANT PM AND WAG PROVISIONS AABD Medical Income and Assets PM to PM a WAG to WAG a AABD Medical Spenddown PM to PM c WAG to WAG c SNAP Assets PM to PM WAG to WAG SNAP Income PM to PM WAG to WAG

23 OTHER BENEFIT PROGRAMS Illinois Cares Rx 89 IL Admin Code Sect : Eligibility Section 8 Subsidy 24 CFR Eligibility and targeting PHA Administrative Plans available upon request to the PHA

24 THE END Any Questions? Jennifer A. Johnson Vice President and Trust Officer American Bank and Trust Company 2580 Foxfield Road St. Charles, IL Tel Fax