How to set up a Special Needs Trust (SNT)

1. Choose which type of Special Needs Trust is best for your loved one.

Types of Special Needs Trusts offered by PLAN of MA & RI:

A First Party Special Needs Trust, or self-settled Special Needs Trust, is created with assets that belong to an individual with disabilities. Examples of funds in a First Party Special Needs Trust include:

A personal injury settlement.
An unplanned inheritance.

Key facts and requirements of a First Party Special Needs Trust include:

A person creating a First Party (d)(4)(A) Standalone Special Needs Trust must be under age 65 at the time that the trust is established. (A person age 65 and over can set up a First Party Pooled Special Needs Trust).
Funds remaining in a First Party Trust are subject to a Medicaid payback. Upon the death of the beneficiary, funds remaining in the trust must first be used to reimburse Medicaid for services to that individual, paid by Medicaid, before any remaining funds can be distributed to anyone else.

A Third-Party Special Needs Trust is created with assets from a donor. Examples of a Third-Party Special Needs Trust donor include:

Parents
Grandparents
Other Relatives of Beneficiary
Friends of the beneficiary

Key facts and requirements of a Third-Party Special Needs Trust include:

A Third-Party Special Needs Trust is often used to hold an inheritance or gift.
A Third-Party Special Needs Trust does not have a Medicaid payback.

Upon the death of the beneficiary, there is no requirement to use residual funds to reimburse Medicaid for services provided to the individual.

The donor of the funds may designate how remainder funds are to be allocated.

A Pooled Special Needs Trust (SNT) is a good option for small estates or in instances where it is difficult to identify a trustee. Unlike PLAN of MA & RI, many financial institutions do not handle small Special Needs Trusts and charge fees that are not cost-effective for small trusts. A Pooled SNT is an option to give families access to highly skilled trustees. Under OBRA-93 regulations, Pooled Trusts or (d)(4)(c) were established and are required to be administered by a non-profit 501(c)3. The non-profit develops a Master Trust which serves as an “umbrella” trust document for every beneficiary who enrolls by signing and executing a Joinder Agreement or Instrument of Trust Assignment.

Key facts and requirements of a Pooled Special Needs Trust include:

PLAN of MA & RI operates an all-inclusive model, taking a holistic approach, that includes trust administration and payments for the beneficiary, professional fund investment, annual accounting, and tax preparation.
PLAN of MA & RI has no minimums to establish a Special Needs Trust.
Every beneficiary in a Pooled SNT has their own sub account.
Funds are “pooled” for investment purposes only.
Pooled SNT’s can be either First-Party or Third-Party.

A Future Funded Special Needs Trust is usually funded by a donor’s Estate meaning that funds won’t be available in the trust until the individual establishing the trust (on behalf of a beneficiary) passes away.

2. Choose the Trustee of your Special Needs Trust.

Q: What is a Special Needs Trustee?

A Trustee is the person who manages trust assets and carries out the provisions of the trust.
A Trustee has many responsibilities, including legal, tax and government benefits issues, ensuring that your beneficiary is receiving all the benefits that they are entitled to, and are well cared for and in a safe environment.

Q: Who can serve as a Special Needs Trustee and How Do I Choose One?

A Trustee can be a Professional Trustee or a Family Trustee.
Choosing a Professional Trustee, such as PLAN of MA & RI, will ensure effective, knowledgeable, and accountable trust management and eliminate strained family relationships that often occur when choosing a Family Trustee.

3. Complete your Trust Application.

PLAN of MA & RI First Party and Third-Party trust applications can be completed online or submitted on paper.

4. Have an Attorney Review Your Trust Documents.

While it is not required to have your Trust Documents reviewed by an attorney, PLAN of MA & RI does recommend that your Trust Documents are reviewed by an attorney. If you do not have an attorney, PLAN of MA & RI is happy to recommend a few attorneys in your area.

5. Open and Fund your Special Needs Trust.

PLAN can establish and fund a Special Needs Trust (SNT) in as little as 2-3 days if we receive a completed application and initial SNT deposit.

6. Meet with your PLAN Service Coordinator.

PLAN of MA & RI is a UNIQUE Special Needs Trustee in that we offer social services support through our knowledgeable, experienced, and compassionate social workers who follow the complicated and ever-changing rules of Special Needs Trusts and public benefits.
Every beneficiary of a PLAN of MA & RI Special Needs Trust is assigned to a social worker for the life of the trust.
Social workers serve as the primary liaison for the beneficiary and their family.