Special Needs Trust Planning for the Future

Dementia is costly, both financially and emotionally. If you or a loved one has been diagnosed with Dementia, you are probably overwhelmed with the prospect of how to financially plan for the future. A trusted partner at a time of need can be welcome help.

One option for managing finances is a pooled special needs trust (SNT). A pooled SNT is administered by a nonprofit organization. The organization makes decisions on how funds from the trust are disbursed on behalf of the trust Beneficiary, makes decisions on who invests the funds, fulfills reporting requirements to government agencies and stays abreast of changing regulations so that means-tested government benefits (like Medicaid and Supplemental Security Income (SSI)) are not jeopardized.

Each Beneficiary’s funds are placed in an individual sub account. The cash assets from all sub accounts are then “pooled” together and invested as a group. Earnings based on the Beneficiary’s share of the principal are reinvested into each sub account. A financial record is maintained for each sub account that reflects all the activity in the account. Each beneficiary or their advocate has access to the financial information either electronically or by mail.

Most pooled trusts offer both First Party and Third Party SNTs. A First Party SNT is established with the Beneficiary’s own funds. A Third Party SNT is funded by a third party for the benefit of the individual with dementia or a family member with special needs.
A pooled special needs trust makes sense for multiple reasons. It allows one the opportunity to set aside funds that will enrich the quality of life for the Beneficiary. The Beneficiary can benefit from trust administration services including investment and management. All disbursements are for the sole benefit of the Beneficiary. 

Pooling the funds reduces administrative fees and increases the principal for investment purposes. A pooled SNT will also protect eligibility for Medicaid and Supplemental Security Income in many instances; however, special planning is required for Beneficiaries over the age of 64 for whom Medicaid Long-term Care benefits may be needed.

It is strongly recommended that you consult with a Trust and Estates Attorney or Elder Law Attorney who can advise you on how a pooled special needs trust can benefit your situation. When appropriate, a SNT can give you a sense of well-being regarding your own, or your loved one’s, financial future while continuing to live life with quality and dignity.

Authored by Joanne Marcus, MSW, Executive Director, Commonwealth Community Trust (CCT). CCT is a 501(c)(3) national nonprofit organization that administers affordable and efficient pooled special needs trusts. CCT was founded in 1990 and is managed by a Board of Directors who serve with a caring heart and without compensation. With years of experience, CCT has a proven reputation as a prudent steward and administrator. For more information about CCT, contact Joanne Marcus, MSW, Executive Director at jmarcus@trustcct.org or 804-740-6930. Visit our website at www.trustCCT.org for access to information and additional resources.

The opinions expressed by contributing authors are not necessarily the opinions of the Dementia Society, Inc. We do not endorse nor guarantee products, comments, suggestions, links, or other forms of content contained within blog posts that have been provided to us with permission, or otherwise. Dementia Society does not provide medical advice. Please consult your doctor. www.DementiaSociety.org.

#helpinghand #lifeisspecial #specialneedstrust #dementiasociety

It's Not Bad Luck

Believing it may bring bad luck, many people resist getting their legal and financial affairs in order for as long as possible. However, it’s not having taken care of these matters that will bring bad luck to you and your immediate family. And, as with all complicated family transactions, communication is the key to success (hopefully) without stress.

The power of attorney (POA) is a legal document where you designate a person - family member, friend, or another individual such as a lawyer, the right to act in your behalf. As is true for many legal procedures, the details vary from state to state. However, granting a POA to a designated individual involves a lawyer, a witness, and a notary.

While your doctor appreciates hearing your concerns, he cannot respond to comments or discuss a loved-one’s condition without having a copy of the health POA on file. This document assures the doctor, as well as other healthcare providers, that the named individual has the authorization to receive confidential information and to make medical decisions on your behalf.

A second POA document gives a designated person permission to sign checks, deposit or withdraw money from your bank accounts, or interact with businesses on your behalf. Similar to the medical POA, the banks and businesses must have a copy of the POA on file before there can be an exchange of information or documents. It is best to designate the same person on both POA documents.

Only people who are demonstrably competent to make well-founded decisions may sign POA papers. If this is not the case, a family member, may feel it is necessary to file a request with the courts to become your guardian and conservator – a lengthy, expensive, and emotionally exhausting process. People who have early-stage dementia usually have the capacity to make decisions and therefore are capable to sign power of attorney papers.

With regard to personal finances, it is important to develop a comprehensive plan that both conforms to applicable state and federal regulations as well as parallels the stipulations of your POA documents. The comprehensive plan makes it possible for a family, or another designated person, to manage your finances in the case of infirmity. Upon death, your designee has immediate access to your accounts and thereby makes it possible for him to pay bills as well as to meet other expenses.

A similar plan should be applied to the management of any stocks, bonds, and certificates of deposit you may have. Trusts and annuities are other areas for exploration as are life and long-term care insurance policies.

Most people do not have the time, inclination, or the skills to develop a comprehensive plan to protect their savings and other assets

You can accomplish some of these tasks, such as opening joint bank and checking accounts with the help of a bank associate. However, it’s imperative that you confer with the professionals who specialize in developing an individualized, comprehensive, and long term plan to create income should you become infirm as well as to supplement your social security or disability benefits. Other facets of your individualized financial plan include strategies to protect your assets, and eventually, your estate. Some of the professionals you may need to see include an estate lawyer, an accountant, a financial advisor, and an insurance underwriter.

Yes, it is true. Neglecting to care of these legal and financial matters long before needed guarantees a future of insurmountable difficulties for you and your loved-ones.

Source: Janet Yagoda Shagam, PhD, is a freelance medical and science writer and the author of “An Unintended Journey: A Caregiver's Guide to Dementia.” Available through Amazon.

The opinions expressed by contributing authors are not necessarily the opinions of the Dementia Society, Inc. We do not endorse nor guarantee products, comments, suggestions, links, or other forms of content contained within blog posts- that have been provided to us with permission, or otherwise. Dementia Society does not provide medical advice, please consult your doctor. www.DementiaSociety.org