If your question is not answered here, please use the form below with your specific question and we can get you a tailored answer. 
Q
Why Establish a Special Needs Trust?
A

A special needs trust preserves eligibility for Medicaid and Social Security, as well as other public benefits.  It also provides for financial management if the disabled person lacks the capacity to handle finances such as bill paying, etc.

Q
Why is it bad for a special needs beneficiary to inherit assets?
A

If the person inherits more than the current resources allowed under Social Security, the disabled beneficiary risks losing their benefits.  In most instances, the court would then need to be petitioned to create a Special Needs Trust.  Because the person inherited funds, Medicaid would need to be paid back for ALL benefits paid on behalf of the beneficiary.   Therefore, if the Special Needs beneficiary does not use all of the funds, then they are reverted to the State of New Mexico and not other heirs. 

Q
Why not leave the estate to someone else to care for disabled beneficiary?
AThis is one of the most difficult things for families to manage.  You trust your other children to care for their Special Needs sibling; however, there is nothing under the law that would require them to actually care for the individual.  Family dynamics in the future cannot be secured without this type of trust. 
Q
What is a Special Needs Memorandum of Intent or Memorandum of Understanding?
A

As a lawyer with a child with special needs, there are many things that I know about my child that others cannot figure out.  My child is hearing impaired but can communicate (in her own way) with me.  I also know things like, she won’t take her medicine with water, she only will eat eggs scrambled.  If all else fails when she is throwing a fit, then there are techniques to distract her.  Finally, she has a myriad of medical needs that her substitute caregiver would need to know.  This Memorandum is a place where you can complete these specifics so that the next caregiver has a head start on the transition. 

Q
We will fight to protect your legal rights under the law?
AAs a lawyer with a child with special needs, there are many things that I know about my child that others cannot figure out.  My child is hearing impaired but can communicate (in her own way) with me.  I also know things like, she won’t take her medicine with water, she only will eat eggs scrambled.  If all else fails when she is throwing a fit, then there are techniques to distract her.  Finally, she has a myriad of medical needs that her substitute caregiver would need to know.  This Memorandum is a place where you can complete these specifics so that the next caregiver has a head start on the transition. 
Q
How can you avoid court and the Medicaid payback provisions?
A It’s simple.  Engage in estate planning and transition planning before you need it.
Q
What is the difference between a Third Party Special Needs Trust and First Party Special Needs Trust?
A

The difference between the First Party (payback) Special Needs Trust and the Third Party Special Needs Trust, and the decision as to which trust the legal practitioner will draft or use, is based upon the source of property that funds. Specifically, the pay back Special Needs Trust is designed to hold property which belongs to the disabled person. For example, a medical malpractice award, personal injury or other financial legal settlement or judgment; child support (under certain circumstances; accumulated resources of an individual who becomes disabled as a result of the onset of a permanently disabling condition (for example, Parkinson’s disease, traumatic head injury, Multiple Sclerosis, etc.); and receipt of an inheritance  – all of which would otherwise make an individual ineligible Medicaid.  If the funds are those of the parents that they wish to leave for the special needs child, then that would be a third party Special Needs Trust. 

Q
What is the definition of disabled for Trust purposes?
A

The definition of ‘disabled’ and the statutory cite therein means the individual either has medically qualified under Social Security law for SSI (a cash benefit program for poor disabled persons without sufficient work quarters) or SSDI (social security disability, a cash benefit program for persons who have been employed and collected enough work quarters or history proximate to the onset of the permanent disability). Disabled does not mean a judicial determination of incompetence or incapacity. 

Q
Do you need a court to approve a Special Needs Trust?
AIf the parents create the Special Needs Trust.  You do not need a court to approve your Special Needs Trust. 
Q
Can a guardian establish a trust for the beneficiary?
AA legal guardian may also establish the Special Needs Trust but that guardian must be appointed by a court order. In some courts, a guardian is empowered or commissioned to establish, settle and fund the payback trust. 
Q
What are the benefits of a Pooled Special Needs Trust?
AA pooled trust can be a cost-effective alternative to the payback trust with its attorney and accountant fees, court oversight, expenses for accounting.  You also do not need as many assets to fund a pooled trust. 
Q
How can you fund a Special Needs Trust without many assets?
ALife insurance is a great way to fund a Special Needs Trust.  You can buy a policy based on your budget.  You will then have cash assets to fund the trust and will have the peace of mind that your special needs beneficiary will be taken care of upon your passing.  If you do not have a good financial advisory and fiduciary, we can direct you to some trusted options.
Q
What is SSDI?
A

Social Security Disability Income (“SSDI”) provides a monthly cash benefit for persons who have sufficient work quarters or work history and medically prove they are disabled. The Social Security definition of disabled means that the individual is unable to engage in substantial, gainful employment and under age 65 (persons age 65 and older with a work history have SSA retirement income). In addition, a derivative benefit of SSDI from a parent work history may be paid to disabled persons for whom the onset of their disability occurred before age 22.  This type of benefit is paid when that parent has either died or become disabled himself or herself.  The benefit, called Disabled Adult Child (DAC) benefit, paid is 50% of the parent’s social security or SSDI while the parent is living,and 75% of the parent’s benefit after the parent has died. 

Q
What is SSI?
ADisabled persons under the age of 65 (or, poor persons who are over the age of 65 years), without sufficient work quarters or history to qualify for SSDI, may be eligible for the cash benefit program is called Supplemental Security Income (SSl). The basic federal cash benefit varies by region and depends upon living arrangement. Each state has the option of supplementing the federal benefit. Living arrangement categories are generally classified as Living Alone, Living in the Household of Another, Congregate Living (for example,a group home), and Institutional Living (for example, a nursing home or state facility). 
Q
Who should be the Trustee of a Special Needs Trust?
AThe goal of a Special Needs Trust is to provide for a disabled person while maintaining their benefits.  As the government programs are constantly changing, we always recommend a corporate trustee.  These entities are bonded, licensed and insured and more importantly, they understand the rules. 
Q
How do you pick a corporate trustee?
AThe best way to know if a corporate trustee is right for you is to interview them.  You call and set an appointment with a trust officer.  If they will not meet with you, move on. 
Q
What questions should I ask a corporate trustee?
A A good trustee will give you sufficient time to ask a question.  Some common questions are below. How many Special Needs Trusts are you currently managing? How do you work with the guardian?  What is your turn around time when the guardian has a request?  What is your philosophy in funding requests?  How will you make sure that my beneficiary’s needs are met?  How will you spend my funds to make my beneficiary’s life the best it can be?  How often will you visit the home of my beneficiary?  What are your fees? 
Q
What is involved in managing a Special Needs Trust?
A

This is the short answer. Management of a  Special Needs Trust can be divided into two categories, financial management and ‘day to day’ administrative management. Financial management is guided by state law. Most states have enacted laws which require ‘prudent investment’ and define that either by statute, judicial decision, or both. If the trust is monitored by a court, there may be restrictions established by the court. For example, your court may require deposit into FDIC insured banking institutions (and within FDIC insured levels) and court approval authorizing deposit of the trust portfolio with an investment company.   Other courts may require a financial plan be submitted -in writing or by testimony- by an investment adviser establishing the financial management plan for the trust, particularly when larger sums are involved. The most important thing to do in planning is work with a qualified financial adviser and fiduciary.  Administrative management is the job of the trustee to make sure that the funds are being spent according to the law and for the benefit of the disabled person.

Q
What is a Trust Protector?
AA trust protector advises the trustee and can oversee the financial management of the trust.  For my daughter with Down Syndrome, my brother is a physician and highly qualified to take care of her.  However, he is not going to have the time to learn about Special Needs Trust and administer the ins and outs.  As a Trust Protector, the trustee can do the heavy lifting and he can oversee everything.  A Trust Protector may be authorized to remove a trustee for misdeeds or misconduct . The Trust Protector’s duties must be delineated in the document. 
Q
I need a Special Needs Trust and cannot afford the planning, what are my options?
AAt Roybal-Mack & Cordova, we are realistic about financial constraints when caring for a disabled family member.  If you need the planning, you can apply for our Pro Bono Special Needs Trust day held in October.  This is handled on a first come/first serve basis and is for disabled beneficiaries with Down Syndrome.  If your child has autism, we work with the Holman’s Autism Foundation and have a similar benefit.  You will need to call the Holman’s Autism Foundation and request a referral for its planning day. 

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