Best Practices for Special Needs Trust

Administration

Law Firm Trust Departmentwith Attorney Acting as Trustee

You know special needs planning, public benefits, and distribution rules.

You are a neutral party; family members do not have to stand between the money and another family member.

You have resources available to you that most family members and financial institutions lack, e.g. variety of investment options, access to home improvement contractors and the like.

Advantages for the beneficiary

Keeps you up to date on special needs planning; you must stay current with the law.

Gives you a consistent source of revenue.

Expands the scope of your practice; it’s not just an advising practice any more.

Creates stronger connections with financial and investment advisors who may refer additional clients to your practice.

Advantages for your practice

The annoyed beneficiary: often not very happy to have someone else managing his or her money. Just give me all of the money- who cares about the benefits.

You are not practicing law; rather you are now a trustee and cannot charge attorney fees for your trustee work.

Any Disadvantages?

Will you be under the jurisdiction of any court?

Will you only accept SNT with court supervision?

Will you need to be bonded? Will the trust account be restricted? Does your malpractice and liability insurance cover this activity?

Almost always hire investment advisors unless it’s a really small trust.

Preliminary Decisions: Court Jurisdiction, Investment Advisors

Where will the trust beneficiaries come from?

Clients: parents, grandparents, individuals with disabilities

Disability organizations, settlement attorneys, i.e. personal injury, workers’ compensation

Bank trust departments - often want to shed small trusts

Networking and marketing

A Special Needs Trust DepartmentLet’s Get Started

Organizing: Develop job descriptions and be ready to add staff such as a Trust Administrator, an Assistant Trust Administrator & a Bookkeeper. Create lines of reporting.

See Assistant Trust Administrator job description example

EXH. A

SNT Department- Organizing and Developing It

2014 Job Description: Assistant Trust Administrator EXH. A

Summary: Manages and administers a portfolio of trust accounts primarily for special needs beneficiaries. Major responsibilities include developing and maintaining beneficiary relationships, administering the trust, preparing reports, making distributions including working with legal and financial documents.

Qualifications: Associate’s degree in business, with accounting courses, 2 years experience in customer service in an accounting setting such as a bank or trust company.

Duties and Responsibilities: Performs a wide variety of trust administration activities to support our special needs beneficiaries; here is a sample list:

•Client Relations – Establishes and maintains on-going relationships with beneficiaries, developing a healthy working relationship and building trust. Deals with beneficiaries daily on expenditure and other requests.

•Bill Payment - Receives and processes invoices for payment of routine and extraordinary expenses including data entry. This may also include the coordination of purchases with vendors on behalf of the beneficiary.

•Insurance Policies - Places and maintains insurance policies for the trust and trust beneficiaries including processing renewal applications.

•Payroll Processing - Oversees the payroll process for contract employees and caregivers. Approves and forwards time sheets for processing.

•Reporting – Reviews and approves trust reports prepared by the bookkeeper while supporting the probate accounting process.

•Problem Solving – Proactively anticipates and resolves issues quickly.

•Process Improvement – Makes recommendations to improve processes that will increase the service quality, efficiency and responsiveness to our beneficiaries.

•Technology – Provides technology expertise within the Trust department regarding data downloads, interfaces with financial institutions and the use of other applications.

•Client Files - Works daily within the PC Law application to reference file activity and enter information to the digital file.

•Other Duties – Performs other duties as assigned including scanning documents into an electronic system.

Create checklists – EXH. B & C

Ticklers – EXH. D

Personal care plans for different beneficiaries – EXH. E

Fee schedules – EXH. F

Budget planning spreadsheets for the beneficiary – EXH. G

The SNT Department - Development

Checklists

Benefits checklist, EXH. B. 1-5

Establish new SNT, EXH. C

Ticklers

On-going activities, EXH D

EXHIBITS

Personal Care Plans EXH. E. 1-3

Fee schedules EXH. F. 1-2

Budgeting EXH. G. 1-2

◦ Create an annual budget.

EXHIBITS

DATE:       Benefits Checklist EXH. B. 1 of 5CLIENT INFORMATIONClient:      Matter(s):      Physical Address:      Own Rent Live with Family Other      

Phone:       Cell:       Email:      

DOB:       SS#:      

Single Married Divorced Widowed

Drivers License/ID #:       State:       Expires:      

Conservator/Guardian       Phone:      

Home Health Agency/Aides/Adult DaycareName(s):      Address:      Services and hours:      Pay:      Other relevant contact/care information:      

DOCUMENTS: POA Agent(s):      

HCD: Agent(s):      

Will

DNR

INCOMEEXH B. 2 of 5

SS Retirement $      Where Deposited:      Representative Payee (if applicable):      

SSI: $      Where Deposited:      Representative Payee (if applicable):      

SSDI: $      Where Deposited:      Representative Payee (if applicable):      

State Supplement: (Cash Assistance) income under $2,022 assets under $1,600/$2,400Amount:       Client ID #      Case Worker Contact:      Representative Payee (if applicable):      

Pension: $      Employer :     Payee (if other than self):      Payor Contact Info.:      

Workers Compensation:      

Unemployment Income:      

Employment Income:      

Trust: $      per month Total trust assets: $     Name of Trust:      Type:      Trustee:      Comments: (i.e. for excess assets or income, if income, how much and how often. What are assets used for?      

Income for Benefits Calculations:Applied Income: $      Payable to:      Diverted Income: $      Where diverted (ex. PLAN)      Any Diversion to community spouse:      Comments:      

Programs: EXH. B. 3 of 5Medicare A&B Medicare #:      Premium $     

Effective date A:       Effective date B:      

Medicare Part D Medicare #:      Premium $     Effective date:       Provider:      

Medicare Extra Help (lowers co-pays for Part D to $2.60 generic and $6.50 brand name)HICN:       Effective:      

MediGap Policy Premium $     Policy Number#      Company:      

Medicare D Low-Income Subsidy (LIS): T-19, SSI, QMB, SLMB automatically get subsidy Client ID #      Case Worker:       Phone:      

ConnPACE: only eligible for ConnPACE if you are not eligible for MedicareClient ID #       Effective Date:      Case Worker:       Phone:     

ConnMap (Ct Medicare Assignment Program)Client ID #       Effective Date:      Case Worker:       Phone:     

Qualified Medicare Savings PlanQMB       SLMB       ALMB      

HospiceClient ID #      Case Worker:      

Other Health Insurance:      Employed Disabled Program:      Medicaid or State/Waiver Programs (ex. T19, PCA Waiver, LIA, Husky, Wise, Pilots, etc.) Program:      

Client ID #       Effective date:      Case Worker Contact:      

DDS Services

Program:       effective date:    EXH B. 4 of 5   Client ID #      Case Worker:      

DHMAS ServicesProgram:       effective date:      Client ID #      Case Worker:      

Any Prior State or Medicaid AssistanceSNAP (Supplemental Nutrition Assistance Program)

Amount: $     Client ID #      Case Worker:      

Contingency Heating Assistance Program (CHAP)Income Limit: Household of 1=$2,642.66 Asset Limit: $10,000 liquid owner $7,000 renterHigher Income limit for more in Household.Benefit: $100 a year

Amount: $     Client ID #      Case Worker:      

Fuel Assistance (CEAP) - must be homeowner or renterIncome Limit: Household of 1 (over 60 or disabled)=$1,805 Asset Limit: $10,000 liquid owner $7,000 renterHigher Income limit for more in Household.Benefit: vulnerable homeowner: $255 per year

Invulnerable homeowner: $220 per year Renter: $10 to $20 per year.Amount: $     Client ID #      Case Worker:      

Homeowners’ Tax Relief Program (Circuit Breaker): Income Limit: $2,692/single, $3,291.66/marriedNo Asset LimitBenefit: up to $1,000/single and $1,250/married based on incomeHouse must be in your name or own a life use

Amount: $     Client ID #      Case Worker:      

Housing choice Voucher Program (formerly Section 8) EXH. B. 5 of 5Amount State Pays: $     Amount Tenant Pays: $     Client ID #      Case Worker:      

RAP (Rental Assistance Program)Amount: $     Client ID #      Case Worker:      

Senior Nutrition Program (Meals on Wheels):      Congregate Housing:      Housing Authority:      

Veterans Tax Exemption (for homeowners):      Any Prior Benefits in Connecticut or Other States including incarceration (explain):     Veteran’s Benefits

1st Type of Benefit      Benefit Amount: $     

2nd Type of Benefit      Benefit Amount: $     

Service Number:      File Number:      Branch of Service:      

Trust ChecklistI. Establish New Trust

Pre-Funding

1. Confirm receipt of Decree to establish, fund and appoint trustee

2. Confirm court has a copy of the executed trust

3. Obtain signed trustee services agreement

4. Obtain EIN for trust

5. Select financial advisor

EXH. C 1 of 3

Post-Funding

1. Establish trust investment account.2. Establish trust bank account.3. Set up accounting file on Quicken

including download links to financial institutions

4. File Initial Inventory (PC Form 440)5. File Appearance of attorney for Trustee6. Initial meeting with beneficiary to

introduce team and discuss needs

Trust Checklist cont’d EXH. C 2 of 3

Trust Checklist cont’d EXH. C 3 of 3

7. Confirm which public benefits beneficiary is receiving (USE Benefits Checklist)

8. Schedule care evaluation with a Geriatric Care Manager

9. Establish a budget10. Prepare and execute agreements such as

caregiver, rental, conservator, etc. (if applicable)11. Review pre-paid funeral arrangements12. Establish vendor relationships & set-up billing

accounts13. Obtain insurance (umbrella, workers comp, vehicle,

homeowners)

II. Trust On-Going Activities EXH. D - Tickler

Weekly:Pay bills and coordinate disbursementsReceive mail, scan documentsCommunicate with beneficiaries to address issues, as they may arise

Monthly:Reconcile bank and investment accountsReview bank statements

Quarterly:Estimated tax payments

Semi-Annually:Prepare trust activity report

Annually:File annual Probate Court accounting (PC Form 443).Meeting with client to review benefits, budget and investment performance.

A Roadmap for the Future

Confidential Care PlanLovingly Prepared For:

 Prepared by: _____________________________

Date: ________________

 

Personal Care Plans – For Child EXH E. 1-3

A Roadmap for the Future

Confidential Personal Care Plan Lovingly Prepared For:

_______________________________ 

Prepared by: ____________ Date: ___________

For a Loved One EXH. E. 2-3

A Roadmap for the Future

Confidential Personal Care PlanPrepared For:

________________________

For self: EXH E. 3-3

CZEPIGA DALY POPE, LLCAttorney Sharon L. PopeFEE SCHEDULE FOR TRUSTEE SERVICES The services identified in this agreement are for the NAMED BENEFICIARY Special Needs Trust Agreement which was executed on ____________ and is under

Probate Court jurisdiction.  Special needs trusts are not ordinary support trusts as these trusts are only available for persons with disabilities who are also recipients of certain public

benefits. Maintaining these benefits is usually paramount; thus careful distribution planning is essential. Special knowledge is necessary to properly administer these trusts for the sole benefit of the beneficiary.

  Trust Services: The trustee agrees to provide the following basic services; here's a sample:

Perform annual accountings of the Trust’s financial activities and distribution of quarterly statements to the trust beneficiary or the beneficiary’s legal representative.

Coordination and filing of all applicable federal and state trust tax forms. Actual tax preparation is not included. Safekeeping of information and accounting records pertaining to the trust. Selection of an investment advisor to manage the trust assets including on-going communication with the investment advisor. An annual meeting with the beneficiary and the beneficiary’s legal representative, if needed, to assess the beneficiary’s needs and develop an annual

budget. Annual meetings with the investment advisor, if any, to review the investment portfolio against goals. On-going communication between the beneficiary, Conservator or other parties and the trust administrator or trustee regarding trust activities. This

may also include contacting vendors and arranging for services. Collection of assets, receipt of income, payment of expenses and taxes and making distributions based on the annual budget. Hourly Trustee Fees: Fees will be based on time charges at the following hourly rates:  a) Trustee $ b) Trust Administrator $ c) Trust Bookkeeper $  OR Annual Trustee Fees: The annual fees for trustee services are based on the periodic market value of all assets, including real estate, held in the trust as of

a specific date. On the 1st $1,000,000 ? %.Next $1,000,000 ?%Next $3,000,000 ? %Over $5,000,000 ? % 

Fee Schedules EXH .F 1-2

You can expect the Trust Administrators to provide the majority of services. Billing: Billing for trustee services will commence upon the deposit of any funds, securities or other assets into

the Trust. Trustee fees will be billed and deducted from the trust account on a quarterly basis. A copy of statements will be sent to the beneficiary or legal representative.

 Legal Services: Legal advice or expertise may be required in additional areas such as court petitions,

hearings and appearances, application(s) for public benefits or redetermination of these benefits, if requested, reporting to federal agencies, etc. Legal services will be billed at the following hourly rates which are discounted from our usual and customary fees:

(a) Attorney $ _______discounted from the firm’s usual and customary rate of $______.(b) Associate Attorney $ _______discounted from the firm’s usual and customary rate of $______.(c) Paralegal $_______ discounted from the firm’s usual and customary rate of $______.

The Firm reserves the right to increase its fee schedule and hourly rates with 30 days’ prior notice to the Client. Investment responsibility is delegated to an Investment Advisor for trusts with balances in excess of $250,000. Trusts with $250,000 or less will be held in FDIC insured accounts.

We, the Client and the Firm, have read this Fee Agreement and agree to its terms and have signed it as our free act.

 By _____________________________ _____________________________

Client Date

By _____________________________ _____________________________Attorney Sharon L. Pope DateFor: The Firm

Fee Schedules cont’d EXH. F. 2-2

Client Name:

Matter:

Budget Year:   Monthly Annual      

INCOME              

Investment Income   -          

Other Income              

Total Income - -          

EXPENSES              

Utilities              

Insurance              

Household Services              

Food / Groceries              

Property Taxes              

Care Giver Services              

Vehicle Maintenance / Gas              

Attorney Fees              

Probate Court Fees              

Trustee Fees              

Financial Advisor              

Distributions to Beneficiary              

Other Expenses              

Income Taxes              

Total Expenses - -    

Surplus / (Deficit) $ - $ -

TRUST OPERATING BUDGET

EXH. G

Thank you!

By Attorney Sharon L. Pope

15 Massirio Drive, Berlin ∞ 151 New Park Avenue, Hartford237 Hopmeadow Street, Simsbury ∞ 281 Hartford Tpke, Vernon

 (860) 236-7673