What is a Pooled Special Needs Trust?
ATTORNEY QUESTIONS
What are special needs trusts, and how can they help my clients?
Special needs trusts (SNTs) are a type of trust available for beneficiaries with disabilities who do or may receive means-tested government benefits. Means-tested benefits have stringent financial criteria: in many cases, recipients may have only $2,000 of countable resources. Money held in a SNT is not considered a countable resource by benefits programs. By putting money in a SNT, a trust beneficiary can maintain benefits eligibility while funds in trust are available to be used for their benefit.
How do I know if my client has government benefits that require the protection of a special needs trust?
Clients receiving needs-based benefits such as SSI (Supplemental Security Income) or most Medicaid programs require an SNT to protect their benefits. Using an SNT preserves benefits eligibility and allows your client to use their money for items in addition to those provided by SSI or Medicaid. Absent an SNT, your client could lose benefits eligibility and be forced to pay privately to replace supports previously provided through benefits.
How can SNTs help in estate planning?
SNTs are used in estate planning for the benefit of loved ones with disabilities, to ensure that the recipient’s means-tested benefits are not affected by the gift.
What kinds of special needs trusts are there?
First-party SNTs are trusts funded with money belonging to the disabled beneficiary, such as settlement proceeds, awards, or inheritances. These are statutory trusts which are required to include specific terms, including the requirements that: 1) trust funds be used for the “sole benefit” of the beneficiary; and 2) at the beneficiary’s death, before payments to remainder beneficiaries, trust funds are subject to claims by state Medicaid agencies for benefits paid for the beneficiary.
Third-party SNTs are trusts funded with money belonging to parties other than the disabled beneficiary. These trusts are not statutory. They are counted as resources only to the extent the trust beneficiary can demand trust distributions.
Pooled SNTs (PSNTs) are trusts established by a trust provider under a master trust agreement created by the provider. A pooled SNT may be either first- or third- party. Contributions to the trust are pooled for purposes of investment and administration, but each beneficiary’s funds are accounted for separately and are used for that beneficiary’s benefit. PSNTs often are used by trustees to facilitate trust administration (because the master trust agreement provides uniform trust terms), to quickly establish an SNT with a trust instrument pre-approved by benefits agencies, or to establish an SNT without incurring the expense of drafting an individual trust instrument.
What does Anchor for Special Needs do?
Anchor for Special Needs is a 501(c)(3) charitable organization that operates and administers SNTs nationwide. Anchor offers both first- and third-party PSNT options. Alongside its PSNTs, Anchor also accepts appointment as trustee for individually-drafted first- and third-party SNTs.
Are Anchor’s PSNTs approved?
Anchor’s PSNTs comply with SSA and Medicaid program rules and have been previously approved by SSA and many states’ Medicaid agencies. Anchor reports the creation of each pooled trust subaccount to interested benefits agencies and, if contacted by the agency or the trust beneficiary, responds to all agency questions regarding the trust. On the rare occasion SSA or Medicaid raise a concern that cannot be resolved by explanation, Anchor works with the agency to amend the trust as requested, free of charge to the trust beneficiary, in order to ensure the trust continues to be accepted as a valid PSNT.
BENEFICIARY QUESTIONS
Why is a special needs trust (SNT) necessary?
If you receive needs-based government benefits such as SSI or Medicaid, receiving money can cause you to be above your program’s resource limit and make you lose eligibility. Funds in an SNT are not counted for purposes of SSI or Medicaid. Depositing excess resources in an SNT can allow you to maintain eligibility for benefits.
What can the money in my SNT be used for?
Money in your SNT must be used to purchase goods and services that primarily benefit you (as opposed to others). Common distributions include:
- Adaptive equipment and home modifications;
- Medications, therapies, treatments, and equipment not paid for by other sources;
- Companion or respite care;
- Case management;
- A vehicle for transportation, and maintenance, repair, and gasoline;
- Furniture, appliances, or household items;
- Gardening or lawn care;
- Electronics, such as a cell phone or computer;
- Insurance (homeowner’s, vehicle, or renter’s);
- Phone, internet, or cable services;
- Travel;
- Entertainment and recreation;
- Legal fees; and
- Prepaid funeral.
The above list is not complete. Anchor welcomes your questions about specific distributions important to you.
How do I access money in my SNT?
As trustee, Anchor will make distributions to provide you with goods and services that supplement your benefits and do not affect your benefits eligibility. Anchor follows SSA and Medicaid policies about allowable distributions and will keep records for each distribution. You will work with your trustee to request distributions and make a plan for trust spending; however, trust distribution decisions ultimately are made by the trustee. Distribution decisions are reviewed by beneficiaries, benefits agencies, and sometimes courts.
How do I set up an SNT?
You can establish an account in a pooled SNT that already has been established by Anchor. Your funds will be pooled with those of other beneficiaries for purposes of investment and administration, but will be accounted for separately and used for your benefit. The process is not complicated, the turnaround time is quick, and you will have help with the process.
Anchor also accepts appointment as trustee for individual trusts drafted by attorneys. If you are interested in having Anchor serve as trustee for a trust drafted by your attorney, let us know.
What happens to funds in my trust when I die?
Anchor’s SNTs allow you to name a remainder beneficiary when you set up your trust account. If the trust was funded with your money, at your death, Medicaid is required to be paid back first, if there is a claim. Remaining funds will be paid to the remainder beneficiary you name. Unlike some pooled trust providers, Anchor does not retain funds of its beneficiaries who die.
DONOR INFORMATION
Every donation we receive helps us to provide life-changing programs and resources for individuals with special needs. Our mission is to act with diligence and respect as we operate a pooled special needs trust and act as trustee and administrator for individual special needs trusts. We need your support to fulfill our vision of creating a program that empowers individuals with special needs to have agency over their lives.
Currently, we are focusing on developing our “Be Your Own Anchor” financial literacy program, which is aimed at teaching individuals with special needs the financial skills necessary for greater independence and agency over their lives. The “Be Your Own Anchor” financial literacy program will be offered to Anchor for Special Needs, Inc. beneficiaries and the disabled community at large through online and in-person sessions. With your donation, we can provide the necessary resources, materials, and trainings to make positive impacts on our participants lives.
Just imagine the impact your donation could make in the lives of individuals with special needs. Your contribution could provide them with the financial knowledge and tools necessary to make informed decisions, gain confidence, and lead a more active role in the financial decisions of their lives.
Giving to Anchor for Special Needs, Inc. you are not just making a donation – you are impacting lives through agency building and educating a community of individuals with financial literacy. Our work would not be possible without the generosity of our supporters, and we are grateful for every gift we receive, no matter the size. Thank you for your support and for making an impact in the lives of those that we serve.
Donate through PayPal – For every $30 donated, a student can be given our financial literacy program.
