To account for this dynamic, you could make a loved one with a disability the beneficiary of a special needs trust. Under program rules, the trustee could use the assets in the trust to improve the beneficiary's quality of life. Learn more about special needs trust in North Dakota in this presentation.

1. WHAT IS A
SPECIAL NEEDS
TRUST IN
NORTH DAKOTA?

2. What is a Special Needs Trust in North Dakota? www.germanlawgroup.com
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There is no
universally
applicable
estate plan.
The correct
course of
action is
going to vary
on a case-by-
case basis.
This is why
you should discuss everything in detail with a licensed estate planning attorney
before you make any assumptions.
People who make decisions without knowledge of all of the facts often leave
behind messy situations for their loved ones. With this in mind, we will look at
special needs trusts in this paper.
MEDICAID AND SUPPLEMENTAL SECURITY INCOME
You may have a person with special needs in your family, and you may want to
provide for this loved one in your estate plan. This is great, but you should be
aware of the rules and regulations that govern need-based benefit programs.

3. What is a Special Needs Trust in North Dakota? www.germanlawgroup.com
3
Many people with disabilities require care and treatment that can cost millions of
dollars over the course of a lifetime. Health insurance is important for everyone,
but for these individuals, coverage is an absolute must.
Medicaid is a government health insurance program that is jointly administered
by the federal government along with each respective state government. To
qualify, you must be able to prove that you have very limited financial resources.
People with disabilities who are incapable of earning much income typically
qualify for Medicaid coverage.

4. What is a Special Needs Trust in North Dakota? www.germanlawgroup.com
4
Supplemental Security Income is also relied upon by a significant percentage of
people with special needs. As the name would imply, this program provides an
ongoing source of income. You must meet the eligibility requirements with
regard to limited assets if you want to qualify for SSI.
Someone who is qualified for Medicaid and SSI is not necessarily going to retain
eligibility forever. A change in financial status can render a benefit recipient
ineligible.
This is something to keep in mind when you are planning your estate.

5. What is a Special Needs Trust in North Dakota? www.germanlawgroup.com
5
SPECIAL NEEDS TRUSTS
Now that we have provided the necessary background information about
government benefit programs, we can look at the value of special needs trusts.
When you fund a special needs trust for the benefit of a loved one with a
disability, it is considered to be a third party special needs trust. This is because
the assets that are
being used to fund the
trust are coming from
a third party. They are
not coming from the
beneficiary.
You name a trustee
when you create the
trust agreement. The
trustee administers the
trust, and the beneficiary cannot direct the actions of the trust or directly utilize
funds that have been conveyed into the trust.
However, the trustee can use assets in the trust to satisfy the supplemental
needs of the beneficiary without impacting government benefit eligibility. These
would be needs that are not being paid for by government benefits.
When a third party special needs trust is in place, the Medicaid program would
not seek reimbursement for monies spent from the beneficiary's estate after his
or her death.

6. What is a Special Needs Trust in North Dakota? www.germanlawgroup.com
6
There is another type of special needs trust called a self-settled or first party
special needs trust. This type of trust is funded with the beneficiary's own
money.
The trustee could use assets in the trust to meet the supplemental needs of the
beneficiary without impacting government benefit eligibility throughout the
beneficiary's life. However, after the death of the beneficiary, Medicaid would
seek recovery from the beneficiary's estate.

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7
SUMMARY
People with special needs are often enrolled in the Medicaid program and the
Supplemental Security Income program. These programs are only available to
people who can prove that they have significant financial need.
A direct inheritance could render a benefit recipient ineligible for ongoing
coverage.
To account for this dynamic, you could make a loved one with a disability the
beneficiary of a special needs trust. Under program rules, the trustee could use
the assets in the trust to improve the beneficiary's quality of life. These
expenditures would not jeopardize benefit eligibility.
If you would like to discuss special needs planning with a professional, schedule
a consultation with a licensed estate planning attorney. Your attorney will
become apprised of your situation, answer all of your questions, and help you
put a plan in place if you decide to go forward.

8. What is a Special Needs Trust in North Dakota? www.germanlawgroup.com
8
REFERENCES
American Bar Association
http://www.americanbar.org/newsletter/publications/law_trends_news_practice_
area_e_newsletter_home/0501_estate_financialplanning.html
National Alliance on Mental Health
http://www.nami.org/Content/NavigationMenu/Find_Support/Legal_Support/Spe
cial_Needs_Estate_Planning/Special_Needs_Trust_Primer.htm
Nolo
http://www.nolo.com/legal-encyclopedia/using-special-needs-trust-when-you-
have-too-many-assets-medicaid.html

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About the Author
Raymond J. German
As an attorney in Minnesota and North Dakota, Raymond
J. German provides a wide range of estate planning
services to his clients, with a primary focus on helping
them provide for the security of their loved ones, reduce
estate taxes and avoid or at least minimize the costs and
delays of probate, all with a well-crafted estate plan. Mr.
German defines the mission statement for German Law
Group, PC, as "Helping one family at a time pass on
values, beliefs and finances, which can be shared for
generations to come." Mr. German is well aware of the
growing importance of estate planning and dedicates himself to informing the
public of the need for careful attention to their specific situations. He is a
frequent speaker on a variety of estate planning topics, regularly presenting
educational seminars for the public as well as private groups.
Raymond J. German approaches each challenge with not just solid expertise, but
also remarkable enthusiasm and vigor. By constantly seeking simpler, better, and
more effective ways of doing things, he continues to make a real difference in
the lives of families and on the way estate planning is practiced by attorneys
around the country.
German Law Group, PC
www.GermanLawGroup.com
GRAND FORKS
2650 32nd Avenue South, Suite O
Grand Forks, ND 58201
Phone: (701) 738-0060
Toll Free: (800) 774-7576
Fax: (701) 738-0064