Special Needs Trust Administration

Special needs trusts cover a broad spectrum of circumstances and qualifications for individuals who are disabled or disadvantaged. Such trusts can be complex to administer, requiring compassion, empathy, and unique skills and knowledge.

Establishing a Special Needs Trust

Special Needs Trusts are used to improve the quality of life of an individual with a disability without disqualifying him or her from receiving public benefits.

Trust & Wealth Partners’ professional staff includes specialists who are trained and experienced in navigating the many challenges to provide superior solutions for the trust beneficiary.

Our Special Needs practice is led by Debbie Schultz.

Debbie has earned and holds a Chartered Special Needs Consultant (ChSNC) certification and has dedicated her 30 year career to working with families and their loved ones with disabilities. She and the TWP team  focus on building strong personal relationships with clients to ensure that their preferences are considered, and their needs are met. Debbie is known for her compassionate commitment to providing creative solutions to complicated problems, and to improving our clients’ quality of life. This is often accomplished through collaboration with a team of health care, investment and other professionals.

As a corporate trustee, we are knowledgeable and stay current with the complex eligibility rules applicable to special needs trusts and the several benefits for which a beneficiary may qualify. In addition, a corporate trustee serves as an impartial advocate for the individual with a disability, which often maintains harmony in the family.

The three types of special needs trusts where a beneficiary may receive means-tested benefits are:

Self-Settled or First Party Trusts

Self-Settled or First-Party Special Needs Trusts are most often used when the individual with a disability receives a court settlement. They are established by the individual, or for the benefit of the individual by a parent, grandparent, legal guardian of the individual, or by the court. The trust is funded with the beneficiary’s own funds, and the individual must be disabled pursuant to the Social Security definition of “disability” (42 U.S.C. § 1382c(a)(3)). The trust must contain Medicaid payback provisions and must be funded before the beneficiary turns 65 years old. Self-Settled Special Needs Trusts are authorized under 42 U.S.C. § 1396p(d)(4)(A).

Third Party Special Needs Trusts

Third-Party Special Needs Trusts are commonly used by persons planning in advance for a loved one with special needs. The parents of an individual with disabilities, a grandparent, a sibling, or any other person (other than the beneficiary) may establish the trust. There are no Medicaid payback provisions or obligation when the trust is solely funded with resources from third parties and not from the beneficiary.

Pooled Trusts

Pooled Trusts are often used for small trusts. A separate account is maintained for each beneficiary. However, the resources of many beneficiaries may be pooled together, and those resources are typically managed by a non-profit association. Pooled Special Needs Trusts are authorized under 42 U.S.C. § 1396p(d)(4)(C).

Settlement Protection Trusts

In those cases where the individual is receiving a settlement but is not or will not receive means-tested benefits, a settlement protection trust might be appropriate to carefully manage and protect the assets for the beneficiary. In the case of minors, this can avoid having to place funds in a conservatorship account or a restricted account with the Court. In the case of large settlements, the establishment of a settlement protection trust and having a corporate trustee serve as trustee is judicious so the trust funds are professionally managed in accordance with prudent fiduciary investment principles and are properly used in the best interest of the beneficiary.

Collaboration and Services

We work closely with the beneficiary’s attorney to establish the first party, third party, or settlement protection trust. Once the trust is established, as the corporate trustee we are bound under the fiduciary duty to act only in the best interest of the trust beneficiary while avoiding all conflicts of interest. Our team will provide professional services tailored to meet the needs of each beneficiary, including:

  • professional investment management, or in the case of directed or delegated trusts we work with the third party investment advisor;

  • completion and management of a comprehensive budget;

  • analysis of beneficiary expenditures and the timely and accurate processing of payments;

  • timely periodic reporting of trust assets and transactions;

  • coordination with the accountant regarding the preparation of the beneficiary’s individual tax returns and the payment of any taxes due;

  • coordination of housing, transportation, medical equipment, travel, and pre-paid burial plans; and,

  • collaboration with case managers to assist with life care plans, evaluations, recommendations for therapies, qualification of benefits, and locating skilled nursing services.

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The information provided in this website is believed to be accurate as stated. However, the laws and circumstances vary from state to state and state and federal laws and regulations may change over time. Nothing contained herein shall be deemed to be a rendering of legal or tax advice. Furthermore, neither the providing of the information contained on this website nor any subsequent communications with any employee, officer or other representative of the bank shall be deemed to create a client relationship, and specifically an attorney-client relationship which is expressly declined hereby. Any person contemplating planning or implementing any strategy described in this website or any ancillary information from the bank is encouraged to seek the advice of a qualified legal or tax advisor of their choice prior to adopting any such planning or strategy.