Special Needs Trusts for Legal Services Attorneys...TYPES OF SPECIAL NEEDS TRUST Self-Settled...

SPECIAL NEEDS TRUSTS FOR

LEGAL SERVICES ATTORNEYS

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.

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).

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


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)


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

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

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

RELEVANT SSA REGULATIONS

Income—Definitions and How We Count Income

General 20 CFR 416.1100-1104

Earned Income 20 CFR 416.1110-1112

Unearned Income 20 CFR 416.1120-1124

In-Kind Support and Maintenance 20 CFR 416.1130-1148

Deeming of Income 20 CFR 416.1160-1169


Resources—Definitions and How We Count Resources

General 20 CFR 416.1201

Deeming of resources 20 CFR 416.1202

Deeming of resources of an

essential person 20 CFR 416.1203

Deeming of resources where Medicaid

eligibility is affected 20 CFR 416.1204a

Limitation on resources 20 CFR 416.1205

Resources determinations 20 CFR 416.1207

How funds held in financial institution

accounts are counted 20 CFR 416.1208


Resources—Continued

Exclusion from resources; general 20 CFR 416.1210

Exclusion of the home 20 CFR 416.1212

Exclusion of household goods

and personal effects 20 CFR 416.1216

Exclusion of the automobile 20 CFR 416.1218

Exclusion of life insurance 20 CFR 416.1230

Burial spaces and certain funds

set aside for burial expenses 20 CFR 416.1231

RELEVANT SSA POMS

SI 00810.000 General - Income Rules for the

Supplemental Security Income

Program

SI 00815.000 What Is Not Income

SI 00820.000 Earned Income

SI 00830.000 Unearned Income

SI 00832.000 Unearned Income Anderson Case

SI 00835.000 Living Arrangements and In-Kind

Support and Maintenance

RELEVANT MEDICAL ASSISTANCE REGULATIONS

89 IL ADMIN CODE SECT. 120

Subpart C: Financial Eligibility Determination

Section 120.60 Community Cases

Section 120.61 Long Term Care

Section 120.64 MANG(P) Cases

Subpart H: Medical Assistance No Grant (MANG) Eligibility Factors

Section 120.330 Unearned Income

Section 120.332 Budgeting Unearned Income

Section 120.335 Exempt Unearned Income

Section 120.336 Education Benefits

Section 120.338 Incentive Allowance

Section 120.340 Unearned Income In-Kind

Section 120.342 Child Support and Spousal Maintenance Payments

Section 120.345 Earmarked Income

Section 120.346 Medicaid Qualifying Trusts

Section 120.347 Treatment of Trusts and Annuities (EMERGENCY - 36 Ill.Reg. 10253)

Section 120.350 Lump Sum Payments and Income Tax Refunds

Section 120.355 Protected Income

Section 120.360 Earned Income

Section 120.361 Budgeting Earned Income

Section 120.362 Exempt Earned Income

Section 120.363 Earned Income Disregard - MANG(C)

Section 120.364 Earned Income Exemption

Section 120.366 Exclusion from Earned Income Exemption

RELEVANT MEDICAL ASSISTANCE REGULATIONS


Section 120.370 Recognized

Employment Expenses

Section 120.371 Income From

Work/Study/Training Programs

Section 120.372 Earned Income From

Self-Employment

Section 120.373 Earned Income From

Roomer and Boarder

Section 120.374 Earned Income from

Temporary Employment with the

Census Bureau

Section 120.375 Earned Income In-

Kind

Section 120.376 Payments from the

Illinois Department of Children and

Family Services

Section 120.379 Provisions for the

Prevention of Spousal Impoverishment

(EMERGENCY - 36 Ill.Reg. 10253)

Section 120.380 Resources (EMERGENCY - 36 Ill.Reg. 10253)

Section 120.381 Exempt Resources (EMERGENCY - 36 Ill.Reg. 10253)

Section 120.382 Resource Disregard

Section 120.383 Deferral of Consideration of Assets

Section 120.384 Spenddown of Resources

Section 120.385 Factors Affecting Eligibility for Long Term Care Services (EMERGENCY - 36 Ill.Reg. 10253)

Section 120.386 Property Transfers Occurring On or Before August 10, 1993

Section 120.387 Property Transfers Occurring On or After August 11, 1993 and Before January 1, 2007

Section 120.388 Property Transfers Occurring On or After January 1, 2007

RELEVANT AABD REGULATIONS

89 IL ADMIN CODE SECT. 113, SUBPART C


Section 113.101 Budgeting Unearned Income

Section 113.102 Budgeting Unearned Income of Applicants Receiving Income on Date of Application And/Or Date of Decision

Section 113.103 Initial Receipt of Unearned Income

Section 113.104 Termination of Unearned Income



Section 113.107 Lump-Sum Payments and Income Tax Refunds

Section 113.111 Protected Income


Section 113.113 Exempt Unearned

Income

Section 113.114 Budgeting Earned

Income of Applicants

Section 113.115 Initial Employment


Income For Contractual Employees


Income For Non-contractual School

Employees

Section 113.118 Termination of

Employment

Section 113.120 Exempt Earned

Income

Section 113.125 Recognized

Employment Expenses

RELEVANT AABD REGULATIONS

89 IL ADMIN CODE SECT. 113, SUBPART C

Section 113.130 Income From Work/Study/Training Programs

Section 113.131 Earned Income From Self-Employment

Section 113.132 Earned Income From Roomer and Boarder

Section 113.133 Earned Income From Rental Property

Section 113.134 Earned Income In-Kind

Section 113.139 Payments from the Illinois Department of Children and Family Services

Section 113.140 Assets

Section 113.141 Exempt Assets

Section 113.142 Asset Disregard

Section 113.143 Deferral of Consideration of Assets

Section 113.154 Property Transfers For Applications Filed Prior To October 1, 1989 (Repealed)

Section 113.155 Property Transfers For Applications Filed On Or After October 1, 1989 (Repealed)

Section 113.156 Court Ordered Child Support Payments of Parent/Step-Parent

Section 113.157 Responsibility of Sponsors of Non-citizens Entering the Country Prior to 8/22/96

Section 113.158 Responsibility of Sponsors of Non-citizens Entering the Country On or After 8/22/96

Section 113.160 Assignment of Medical Support Rights

RELEVANT SNAP REGULATIONS


Subpart C: Financial Factors Of Eligibility


Section 121.31 Exempt Unearned Income


Section 121.34 Lump Sum Payments and Income Tax Refunds


Section 121.41 Budgeting Earned Income


Section 121.51 Income From Work/Study/Training Programs

Section 121.52 Earned Income from Roomers or Boarders

Section 121.53 Income From Rental Property

Section 121.54 Earned Income In-Kind

Section 121.55 Sponsors of Aliens



Section 121.59 Asset Disregards

Subpart D: Eligibility Standards

Section 121.60 Net Monthly Income Eligibility Standards

Section 121.61 Gross Monthly Income Eligibility Standards

Section 121.62 Income Which Must Be Annualized

Section 121.63 Deductions from Monthly Income

Section 121.64 Food Stamp Benefit Amount

Subpart E: Household Concept

Section 121.76 Categorically Eligible Households

RELEVANT HOME SERVICES REGULATIONS


SUBPART C: FINANCIAL ELIGIBILITY CRITERIA

Section 682.200 Assets Limitation

Section 682.210 Transfer of Assets


Section 682.230 Assets Held in Joint Ownership

RELEVANT TANF REGULATIONS

89 IL ADMIN CODE SECT. 112, SUBPART G


Section 112.101 Unearned Income of

Parent,

Section 112.105 Budgeting

Unearned Income

Section 112.106 Budgeting

Unearned Income of Applicants

Section 112.107 Initial Receipt of

Unearned Income

Section 112.108 Termination of

Unearned Income

Section 112.110 Exempt Unearned

Income

Section 112.120 Incentive

Allowances


In-Kind


Section 112.127 Lump-Sum

Payments


Section 112.131 Earned Income Tax

Credit


Income


Income of Employed Applicants

Section 112.134 Initial Employment


Income For Contractual Employees

RELEVANT TANF REGULATIONS

89 IL ADMIN CODE SECT. 112, SUBPART G

Section 112.136 Budgeting Earned Income for Non-contractual School Employees

Section 112.137 Termination of Employment


Section 112.141 Earned Income Exemption

Section 112.142 Exclusion from Earned Income Exemption

Section 112.143 Recognized Employment Expenses

Section 112.144 Income from Work-Study and Training Programs

Section 112.145 Earned Income From Self-Employment

Section 112.146 Earned Income From Roomer and Boarder

Section 112.147 Income From Rental

Property

Section 112.148 Payments from the

Illinois Department of Children and

Family Services

Section 112.149 Earned Income In-

Kind



Section 112.152 Asset Disregards

Section 112.153 Deferral of

Consideration of Assets

Section 112.155 Income Limit

Section 112.156 Assets for

Independence Program

RELEVANT PM AND WAG PROVISIONS

TANF Assets

PM 07-01-00 to PM 07-01-18

WAG 07-01-00 to WAG 07-01-18

TANF Income

PM 08-01-00 to PM 08-01-08-c

WAG 08-01-00 to WAG 08-01-08-c

AABD Cash Assets

PM 07-02-00 to PM 07-02-23-b

WAG 07-02-00 to WAG 07-02-23-b

AABD Cash Income

PM 08-02-00 to PM 08-02-07-c

WAG 08-02-00 to WAG 08-02-07-c

RELEVANT PM AND WAG PROVISIONS

AABD Medical Income and Assets

PM 15-04-00 to PM 15-05-04-a

WAG 15-04-00 to WAG 15-05-04-a

AABD Medical Spenddown

PM 15-08-00 to PM 15-08-15-c

WAG 15-08-00 to WAG 15-08-15-c

SNAP Assets

PM 07-04-00 to PM 07-04-20

WAG 07-04-00 to WAG 07-04-20

SNAP Income

PM 08-04-00 to PM 08-04-05

WAG 08-04-00 to WAG 08-04-05

OTHER BENEFIT PROGRAMS

Illinois Cares Rx

89 IL Admin Code Sect 119.20: Eligibility

Section 8 Subsidy

24 CFR 982.201 - Eligibility and targeting

PHA Administrative Plans available upon request to

the PHA

THE END

Any Questions?

Jennifer A. Johnson

Vice President and Trust Officer

American Bank and Trust Company

2580 Foxfield Road

St. Charles, IL 60174

Tel. 630-444-2944

Fax 630-584-9896

[email protected]

mailto:[email protected]

Special Needs Trusts for Legal Services Attorneys...TYPES OF SPECIAL NEEDS TRUST Self-Settled...

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