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Special Needs Trusts Special Needs Trusts The Arc of Northern Virginia.

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Presentation on theme: "Special Needs Trusts Special Needs Trusts The Arc of Northern Virginia."— Presentation transcript:

1 Special Needs Trusts Special Needs Trusts The Arc of Northern Virginia

2 What Is A Special Needs Trust? This is a trust designed to provide benefit to and protect the assets of a person with a disability and still allow the individual to be qualified for and receive government benefits; especially Medicaid and SSI. This is a trust designed to provide benefit to and protect the assets of a person with a disability and still allow the individual to be qualified for and receive government benefits; especially Medicaid and SSI.

3 Why Do I Need A Special Needs Trust? In the commonwealth of Virginia, many public services you or your loved one receive or one day will need are tied to Medicaid and Social Security Eligibility. In the commonwealth of Virginia, many public services you or your loved one receive or one day will need are tied to Medicaid and Social Security Eligibility. Medicaid and Social Security have limits on what you can earn each month and save in a savings or checking account. Medicaid and Social Security have limits on what you can earn each month and save in a savings or checking account. If you go over these limits, services can stop. If you go over these limits, services can stop.

4 Why the purpose of a Special Needs Trust? Provides a management to meet the needs of the Beneficiary which may arise and cannot otherwise be met by the beneficiary's personal resources or benefits. Provides a management to meet the needs of the Beneficiary which may arise and cannot otherwise be met by the beneficiary's personal resources or benefits. Promote the dignity, comfort and happiness by providing supplemental care, treatment not otherwise covered. Promote the dignity, comfort and happiness by providing supplemental care, treatment not otherwise covered.

5 Who is Eligible For A Special Needs Trust? Anyone with a physical, mental or intellectual disability; as defined by the Social Security Act Anyone with a physical, mental or intellectual disability; as defined by the Social Security Act Elderly; Elderly; Receiving Medicaid or Disability Income Receiving Medicaid or Disability Income

6 Types of Special Needs Trusts Self-Funded Trusts D4 (a) - Private D4(c) - Pooled Third Party Trusts fundedunfunded

7 Self-Funded Trusts – d 4 (a) 1. Established by the parent, guardian 2. Funded by the individual 3. For the sole benefit of the individual 4. Created by a private attorney or institution

8 Self-Funded Trusts – d 4 (c) 1. Established by the parent, guardian or the individual; 2. Funded by the individual 3. For the sole benefit of the individual 4. Established with a Pooled Trust Program by utilizing a Master Trust Document and Joinder Agreement

9 What Is A Pooled Special Needs Trust (a.k.a. d4c) Managed by a Non – Profit organization Managed by a Non – Profit organization Funds from individual participants are pooled for fee and investment purposes Funds from individual participants are pooled for fee and investment purposes Fees are calculated based on the total amount of pooled funds Fees are calculated based on the total amount of pooled funds

10 Self-Funded Trusts Most Self-funded accounts are established due to: Most Self-funded accounts are established due to: A personal injury settlement A personal injury settlement An inheritance An inheritance Any other money that threatens benefits Any other money that threatens benefits

11 Self-Funded Trusts Upon the beneficiary’s death; remaining funds in the account are subject to a Medicaid Payback Provision. Upon the beneficiary’s death; remaining funds in the account are subject to a Medicaid Payback Provision.

12 Third Party Trusts – Unfunded or Funded May be setup by parents, grandparents, siblings, aunts and uncles or friends. May be setup by parents, grandparents, siblings, aunts and uncles or friends. Used frequently to by parents to plan for the Future: Used frequently to by parents to plan for the Future: Set up as part of your estate planning process to protect assets and services that your loved one is receiving. Set up as part of your estate planning process to protect assets and services that your loved one is receiving. Avoid probate to have funds available immediately. Avoid probate to have funds available immediately. Ensure your loved one has a way to obtain the items, services or the extra’s you want to make sure they have. Ensure your loved one has a way to obtain the items, services or the extra’s you want to make sure they have. These can be funded during your lifetime or left unfunded until your passing. These can be funded during your lifetime or left unfunded until your passing.

13 Third Party Trusts – Unfunded or Funded May be established by a private attorney or institution. May be established by a private attorney or institution. May be established as part of a pooled trust program May be established as part of a pooled trust program

14 Why Choose A Pooled Trust? Pooled trusts are administered by non-profit agencies - professional staff, greater sensitivity and individualized services. Pooled trusts are administered by non-profit agencies - professional staff, greater sensitivity and individualized services. Pooled trusts offer professional investment management by a bank. Pooled trusts offer professional investment management by a bank. There are no minimum or maximum funding requirements There are no minimum or maximum funding requirements They are more affordable for families or individuals They are more affordable for families or individuals

15 What Can I Use The Trust For? Dental Care Costs Dental Care Costs Trips – visiting siblings; going to the beach Trips – visiting siblings; going to the beach Renting a tux for a cousin’s wedding Renting a tux for a cousin’s wedding Pre-need Expenses Pre-need Expenses Anything not covered by Medicaid or SSI Anything not covered by Medicaid or SSI

16 What Can The Trust Not Be Used For? Recipients of SSI cannot use the trust to pay for food and shelter; including electricity, gas and water bills, property taxes, homeowners insurance and condo association fees. Recipients of SSI cannot use the trust to pay for food and shelter; including electricity, gas and water bills, property taxes, homeowners insurance and condo association fees. For self Funded account holders, the trust cannot pay for burial or funeral expenses for the beneficiary once they pass away. For self Funded account holders, the trust cannot pay for burial or funeral expenses for the beneficiary once they pass away. The Trust can not hold loans The Trust can not hold loans The Trust can not pay cash to the beneficiary. The Trust can not pay cash to the beneficiary. The trust cannot make gifts or use funds for anyone other than the beneficiary The trust cannot make gifts or use funds for anyone other than the beneficiary

17 How Do I Access the Funds Once they are in the Trust? Easily. You complete a simple disbursement request form stating the purpose of the request, amount of the request and to whom to send the check. Easily. You complete a simple disbursement request form stating the purpose of the request, amount of the request and to whom to send the check. In many cases, supporting documentation is needed, such as a receipt or bill. In many cases, supporting documentation is needed, such as a receipt or bill. Then send the request form to The Arc. Then send the request form to The Arc. We understand that everyone is different and we can be creative in accessing funds in other ways as well; such as direct bills. We understand that everyone is different and we can be creative in accessing funds in other ways as well; such as direct bills.

18 How Much Does it Cost? The establishment fee for the Special Needs Trust with The Arc of Northern Virginia is $ The establishment fee for the Special Needs Trust with The Arc of Northern Virginia is $ The annual fee for an unfunded account in $65.00 until the account becomes funded. The annual fee for an unfunded account in $65.00 until the account becomes funded. The Foundation of The Arc of Northern Virginia bills 75 basis points annually of the individuals account. (.0075%) (subject to change) The Foundation of The Arc of Northern Virginia bills 75 basis points annually of the individuals account. (.0075%) (subject to change) SunTrust Bank bills 90 basis points annually. (.0090%) (subject to change) SunTrust Bank bills 90 basis points annually. (.0090%) (subject to change)

19 Why Choose The Arc of Northern Virginia? The Arc of Northern Virginia has been a leading advocate for individuals and families with disabilities for 45 years. The Arc of Northern Virginia has been a leading advocate for individuals and families with disabilities for 45 years. We have the knowledge, expertise, and sensitivity to meet your needs. We have the knowledge, expertise, and sensitivity to meet your needs. Our pooled trust has been in existence for over 8 years. Our pooled trust has been in existence for over 8 years. To date, our trust currently manage over $3.2 million dollars with $2 million in future dollars To date, our trust currently manage over $3.2 million dollars with $2 million in future dollars We have experts available with whom we consult about changes in regulations. We have experts available with whom we consult about changes in regulations. We bring you this service in partnership with SunTrust Bank, a leader in the financial services industry. We bring you this service in partnership with SunTrust Bank, a leader in the financial services industry.

20 Why Do I Need To Plan? We are all fortunate to be here today… But what about tomorrow…


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