"A different way to help your loved ones"
Evergreen Presbyterian Ministries Inc. (EPMI) has developed two Pooled Special Needs Trusts so that the assets of a person with a disability contributed to a trust, either by himself or a family member, will not disqualify him from receiving certain government benefits. These trusts follow the government’s rules allowing assets to be held in trust for a recipient of SSI and Medicaid, as long as certain parameters are met.
Usually called “Special Needs,” or “Supplemental Needs” Trusts (SNT), these trusts are designed specifically to supplement, not supplant, government benefits. Money from the trust cannot be distributed directly to the person with a disability. Instead, it must be distributed to third parties to pay for extra goods and services (ones not covered by government benefits) to be used by the person with a disability.
Parents may consider setting up a special needs trust when they begin their estate planning activities such as drawing up their wills. Leaving assets to another family member or other person for the care of their disabled child runs the risk that the assets might be lost or tied up due to divorce, bankruptcy, lawsuits and financial mismanagement. There is too much at stake for the individual with a disability to lose if proper planning is not in place. An individual with a disability does not have to be left out of a will, but can have his inheritance directed to his special needs trust.
A designated trustee of a special needs trust will manage the trust. The trustee will use trust income and principal to provide for the needs of the individual with the disability. The trustee must use trust resources within the guidelines of the special needs trust agreement. Trustees should be chosen with longevity in mind and the trust itself should be drafted to adjust to changing circumstances, such as to allow trustees to be changed or removed. Evergreen Foundation is the designated trustee of Evergreen’s Two Master Pooled Trusts.
Evergreen Master Pooled Trust I is designed to receive gifts, bequests, life insurance proceeds, retirement account proceeds and the like from disabled persons’families.Master Pooled Trust II is designed to receive the beneficiaries’ own funds, such as personal injury settlements, SSI back payments, outright inheritances or saving accounts. Both trusts will limit distributions to “special needs” instead of basic support so that the beneficiaries’ Medicaid and SSI are not jeopardized during lifetimes. Also, Evergreen’s staff will keep current on Medicaid and Social Security law to be sure the trusts remain in compliance. The trust agreements may be amended from time to time to take changes in the law into account. Each of the two master trusts’ funds will include sub-accounts for each of the beneficiaries. The family members, court or beneficiary who set up a sub-account will sign a separate joinder agreement.
The funds remaining in each Trust I sub-account at a beneficiary’s death must be left partly to EPMI, and the balance can be left to whomever the grantor chooses.Funds remaining in each Trust II sub-account at a beneficiary’s death must be designated by the grantor to remain in the trust for the benefit of other beneficiaries, or will be liable for reimbursement of state Medicaid claims.
The trust agreements are being established under Louisiana law, but enrollment will be offered to Evergreen clients in all five states served. Enrollment also will be offered to all disabled persons in Louisiana who meet the government definition that qualifies for SSI, Medicaid and certain other benefits. Under Louisiana law, a non-profit entity such as Evergreen Foundation can serve as trustee of a trust for mixed private or charitable uses if it is designated as an income or principal beneficiary.
You can open a Master Pooled Trust account with a minimum funding level of $1,000 in Trust I or $500 in Trust II. The money you place in trust can come from a variety of sources—some that you have access to now and others that may not become available until the time of your retirement or death. These sources can include a will, a life insurance policy, your estate, a court settlement, a gift, a retirement account or even cash from your savings.
A funded trust is a trust that becomes active on receipt of the necessary funds. This trust can supplement your loved one’s needs immediately and the balance earns interest. A non-funded trust allows the trust to be established for future use when the funds become available. Many families choose this as a tool in estate planning.
The availability of funds for your family member’s trust will determine whether the account you open will be "funded" or "non-funded." Assets placed in funded accounts will be invested so they will have an opportunity to grow. Even if your family member begins using his/her trust immediately, the balance will still earn interest and/or dividends. If your assets will not become available until sometime in the future, you can open a non-funded account. Many families choose this option so they can make sure the trust is properly established while they are still living. When the trust is established, families can put in writing—through the legally binding "joinder agreement" — their wishes for how the trust disbursements will be used.
There is an enrollment fee of $500 for Trust I to cover the cost of opening a sub-account for the beneficiary. For Trust II, there is no enrollment fee for funded enrollments of $1,000 or less. Trust II enrollments greater than $1,000 incur an enrollment fee of 5 percent of funding up to a maximum fee of $500. Annual fees, as listed in the joinder agreement, are charged only after a trust is funded. A non-funded trust has no annual fees.
Evergreen Presbyterian Ministries, Inc. encourages anyone interested in Evergreen’s special needs trusts to discuss the trusts with his attorney and advisors. The Evergreen staff and its attorney are available to answer any questions.
Funds contributed to the special needs trusts are not tax deductible.
For recipients of SSI and Medicaid, the trust cannot pay for food, clothing and shelter (room, rent, mortgage payments, real estate property taxes, heating fuel, gas, electricity, water, sewage and garbage collection services). The reason that the trust cannot pay for food, clothing or shelter is that those payments would count in determining SSI and Medicaid income and might disqualify the beneficiary from receiving these needed benefits.
The trust can pay expenses that are incurred for a variety of items or services. The following are some of the expenses that the trust can pay without jeopardizing government benefits:
Medicines and Devices. The trust can provide funds for experimental therapies, prescription and nonprescription medicines, eyeglasses, hearing aids, prosthetic devices and expenses for maintenance of those devices.
Medical Services. The trust can provide funds for a private room, private nurses, home health care, physical therapy, rehabilitation, hospice care, medical transportation, wheelchairs, modified scooters, supplemental dietary needs, eyeglasses, psychological counseling, respite care and room and board during a medical confinement.
Dental Care. The trust can provide for dental check-ups and all related needs.
Education. The trust can provide funds for vocational, athletic training and educational expenses such as tuition, books, supplies, computer and software and training in their use.
Recreation. The trust can provide funds for the beneficiary’s hobbies, attendance at cultural and athletic events and vacation travel (including the cost of a companion if needed) for visits with relatives and friends.
Transportation. Funds for purchase of a car, including insurance, gasoline and maintenance, are provided if a car is necessary for the beneficiary to perform essential daily activities, or for a specially equipped vehicle such as a van.
Insurance. The trust can pay the premiums for term life insurance. Such insurance may be a vehicle for providing future security for beneficiaries. Also, supplemental health insurance may be paid for from the trust.
Certain Housing Items. The trust can provide funds for payment of goods and services that add pleasure and quality to life: audio and video equipment, videos, CD’s, DVD’s, furniture, gardening expenses, home insulation, home improvements such as ramps and rails to accommodate the beneficiary's physical condition and similar items.
Contact Information
For more information, contact the following:
Kent Craft, Vice-President of Finance
(318) 949-5515 or kcraft@epmi.org
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