Midwest Special Needs Trust - Safeguarding Public Benefits for People with Disabilities

St. Louis Special School District

November 10, 2014

Presentation Overview

•MSNT background•MSNT as trustee

▫Using a Trust▫Eligibility for Public Benefits ▫Opening a Trust

•Fees•Questions & Discussion

Midwest Special Needs Trust (MSNT)

• Is a state entity created by Missouri Statute in 1989 as Missouri Family Trust ▫Incorporated in 1990▫First Trust opened in 1991▫Major revisions to MFT statute effective 8/28/11

•Values-driven board appointed by Governor•Not for profit 501 c 3•Qualifies as a pooled trust under federal

policy•MSNT receives NO state or federal

appropriations

About MSNT

•Currently administers 1100 active accounts, mostly in Missouri with trust account assets exceeding $32 million

•Contracts with a banking partner for account custodial services and investment management

• In FY 14, the average size at opening was $16,005

•Steady growth in number of accounts and total trust assets over the last decade

01 02 03 04 05 06 07 08 09 10 11 12 13 140

200

400

600

800

1000

1200

281

309345

398

411

446480

577 632

790

918

9901050

1095

117 112

195163

125 133118

Census

Additions

Closures

MSNT administers both -•First Party or Self-Settled Trusts

▫Typical sources of funds Back payment from Social Security Inheritance Personal Injury Settlement

▫Irrevocable▫Medicaid payback required

•Third Party Trusts▫Family donors▫Typically revocable until donor’s death▫Does not require Medicaid payback

Decisions to be made -•Co-trustees and successor co-trustees•Authorization of fees for co-trustee(s)•Remainder beneficiaries after all expenses are paid, including Charitable Trust remainder & Medicaid payback, if applicable

•Investment directive & mutual fund portfolio selection, if donor-directed

•If third party, decision regarding waiver of revocability (has tax implications)

Inactive Trust Option•Option when trust will be funded later

▫inheritance ▫life insurance

•Does require $200 up-front to set up•Enrollment fees assessed when funded so no additional costs until funded

•Can be a helpful option when integrated into your will

•Consult handout as a resource or call MSNT

•Co-trustee identifies needs of the person with disability and assists to request funds from the trust with estimates/receipts

•MSNT reviews each request ▫Must conform decision-making to fiduciary duties▫Must protect eligibility for benefits▫Must comply with Social Security Requirements

•Processed daily▫Authorize bank to prepare check for next

business day― Checks are sent by MSNT to vendor or to co-trustee―$5 check fee

• Committee Review for large requests

Using a Special Needs Trust

Examples of Trust Distributions that will reduce SSI benefits

•Basic shelter-related expenses▫Rent/mortgage▫Basic utilities (electric, gas, water, sewer & trash)

•Groceries/food, alcohol•Cash for any purpose

Why is all this necessary?•Annual SSA Trust Review Process•Audit/review potential•Protection of public benefits•Fiduciary duties

▫Preservation of assets▫Sole benefit

•POMS changes; NPRM expected•Potential for abuse, neglect or exploitation of vulnerable parties

MSNT can help with Eligibility Reviews!

•MFT trusts are specifically exempted as a countable asset in MO Family Service Division policy manual

•Standardized letters for new applicants & re-investigations▫MO Family Support Division (FSD)▫Social Security Administration (SSA)

•MSNT has policy liaisons with – ▫MO Dept of Mental Health▫MoHealthNet Recovery Unit▫FSD in process▫SSA KC regional office

Fed’l & State Authority to Exempt SNTs

Exceptions for Counting Trust Resources for Persons with Disabilities

•Federal Medicaid Regulations▫Title 42 US Code Section 1396p(d)(4)(A)▫Title 42 US Code Section 1396p(d)(4)(C)

•State Eligibility Manual for Permanent and Total Disability (PTD) Medicaid▫Link @

http://www.dss.mo.gov/fsd/iman/medasst/0805-015-10.html

•Supplemental Security Income▫Section 1917(d)(4)(A) of the Social Security Act▫Section 1917(d)(4)(C) of the Social Security Act ▫www.ssa.gov

Fee Type Amount

Enrollment Fee $500 (can be reduced based on income of the donor)

Annual Asset Value (AV) Fee(includes bank admin fees)

2.04% for AV ≤$9,999.99 plus 1.44% for AV ≥ $10,000

Check Processing Fee $5 per check

Annual Trustee Fee (only when MSNT is sole trustee)

$360

Extraordinary Services Fee $75 per hour, plus mileage, if applicable

Account Closure Fee $115 for low balance$185 for closure at the beneficiary’s death

Charitable Trust Provision at death of life beneficiary

None if trust never used 25% of remainder balance if distributions were made

MSNT Administrative Fees

What does MSNT offer?

•An affordable trust option•An accessible option for smaller accounts•Option for individuals with disabilities to open

their own trust, if necessary•Process requests to use trust funds daily•Phone consultation with staff who are familiar

with public benefits •Statutory responsibility to protect public

benefits•Capability to modify trust agreement if federal

rules change •More than 20 years of experience &

recognition

•All Necessary Documents available at http://midwestspecialneedstrust.org/trustDocs/default.htm ▫Declaration of Trust (often called trust agreement)▫Waiver of Right to Revoke for 3rd party trusts▫Enrollment Fee on Sliding Scale up to $500 based

on donor’s income for trusts under $10,000▫Minimum Trust Deposit of $500▫Additional deposits can be made at any time

•All MSNT Trust documents were revised substantially in May, 2012

•First party trust documents revised again in November, 2012 for SSA

Opening A Trust with MSNT

•Attorneys Specializing in Special Needs & Estate Planning▫National Association of Elder Law Attorneys

http://www.naela.org/public/home and click on red box at top right that says Find an Attorney

▫Special Needs Alliance, LLC http://www.specialneedsalliance.org/home/ and

click on Find An Attorney; or directly to

http://www.specialneedsalliance.com/locate-an-attorney

MSNT does not require consultation with an attorney but strongly encourages -

Handouts•Special Needs Trust Fact Sheet•ABA article on pooled trusts•Article on use of a professional trustee for SNTs

•Inactive & Active Trust Comparison•Business Cards

“Experience is generally worth the price no matter how dearly bought.”

-Unknown

MSNT Contact Information

Midwest Special Needs TrustPO Box 7629Columbia, MO 65205

Phone: 573-256-5055Toll free: 1 877-239-8055Fax: 1 573-303-5866Email: mftbt@midwestspecialneedstrust.orgWeb: www.midwestspecialneedstrust.org

MSNT business hours are 8:00 am to 4:30 pm

Questions & Discussion