Special needs trust seminar presentation

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Special needs trust seminar presentation

  1. 1. WHY A SPECIAL NEEDS TRUST? Katherine E. Ingrassia, Esq. October 17, 2012 Courter, Kobert & Cohen 1001 Route 517 Hackettstown, NJ 07840 (908) 852-2600
  2. 2. ADVANCED PLANNING One of the most important things parents or family members can do for a disabled child is to create a trust for his or her benefit. • A trust is created when property (i.e., money, stock) is managed by someone for another persons benefit. • The person managing the property is called the "trustee". • The person whose benefit it is for is called the "beneficiary". • The trust lasts as long as it is needed. • This usually means the trust will go on until the beneficiarys death or until the funds are spent down.Katherine E. Ingrassia, Esq.
  3. 3. ADVANCED PLANNING • A trust provides a much safer vehicle for providing funds to care for a disabled child. • The trust will protect assets from the claims of creditors and should, if properly drafted, allow the child to continue to qualify for the governmental assistance which is vital to the childs continued well-being.Katherine E. Ingrassia, Esq.
  4. 4. SPECIAL NEEDS TRUST The trust that most benefits a person with disabilities who is under 65 is a Special Needs Trust (or Supplemental Needs Trust – the term is used interchangeably). This trust is designed to provide for supplemental and extra care over and above that which the government provides while preserving the person’s eligibility for those benefits.Katherine E. Ingrassia, Esq.
  5. 5. SPECIAL NEEDS TRUST - ADVANTAGES • Government benefits • SSI, Medicad, Vocational Rehabilitation, Subsidized Housing, and Other State Social Services • Money held without penalty • Pool of funds • Family or friends can add at any time • Can receive gifts, inheritances, etc. • Available to those not currently receiving benefitsKatherine E. Ingrassia, Esq.
  6. 6. SPECIAL NEEDS TRUST - ADVANTAGES • Available to those not currently receiving benefits • SSI, Medicaid, Vocational Rehabilitation, Subsidized Housing, and Other State Social Services • Money held without penalty • Pool of funds • Family or friends can add at any time • Can receive gifts, inheritances, etc.Katherine E. Ingrassia, Esq.
  7. 7. WHAT DOES IT COVER • May not be used for basic needs • Created for the supplemental care of the disabled • Cannot be used to pay for housing, medical treatments covered by Medicaid, or clothing • Cannot be used to pay for unauthorized items covered by SSI or Medicaid • Only used for supplemental care • Supplemental care must be definedKatherine E. Ingrassia, Esq.
  8. 8. THREE TYPES OF SPECIAL NEEDS TRUSTS • Third-Party Special Needs Trusts • Most common • Usually created by parent or family member • Can be set up by anyone • Does not need to contain “payback” provision • Self-Settled or First Party Trust • Established by parent or family member • Created upon receipt of assets (settlement or inheritance) • Needs to include “payback” provision • Pooled Special Needs Trust • Managed by non-profit organizationsKatherine E. Ingrassia, Esq.
  9. 9. NAMING A TRUSTEE • Trust must be managed by person other than the disabled • Trustee may be parent, grandparent, trusted family member • Trustee has discretion over distribution of funds • Trustee has fiduciary dutiesKatherine E. Ingrassia, Esq.
  10. 10. WHEN TO SET UP A SPECIAL NEEDS TRUST • Can be created during one’s lifetime or through a person’s Will upon death • Testamentary of special needs trust • Living or inter vivo special needs trust Katherine E. Ingrassia, Esq.
  11. 11. HOW CAN IT BE FUNDED • Family savings • Stock investments and mutual funds • CDs • Military benefits • IRAs • Real property • Standard government benefitsKatherine E. Ingrassia, Esq.
  12. 12. WHAT INFORMATION IS NEEDED • Information to provide an attorney may include: • Likes, dislikes, personal habits, special needs • Medical diagnosis • Social security number • Sources for and amounts of funding • Trustee information • Distribution of remaining fundsKatherine E. Ingrassia, Esq.
  13. 13. OTHER ADVANCED PLANNING • Your own estate plan • Inheritance for the disabled child • Beneficiary designations • Protection against estate tax • Your child’s estate planKatherine E. Ingrassia, Esq.
  14. 14. WHY USE A SPECIAL NEEDS TRUST TO SUMMARIZE • The disabled beneficiary will keep his/her income (SSI or SSD) and health care benefits. • Money in the trust can be used to pay for items and services not covered by government benefits • Parents control how trust assets are utilized for the benefit of the child and determine who makes these decisions after they die.Katherine E. Ingrassia, Esq.
  15. 15. THANK YOU QuestionsKatherine E. Ingrassia, Esq.

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