ESTATE AND LONG TERM CARE PLANNING for Persons Living with MS

PLANNING FOR THE FUTURE: SPECIAL NEEDS AND SUPPLEMENTAL NEEDS TRUSTS

by:Roxanne Jenkins AND Larry Piumbroeck,LSS of Minnesota and Laurie Hanson, Long, Reher & Hanson, P.A.

Long, Reher & Hanson, P.AOverview of presentationPurpose of supplemental, special needs, and pooled trusts for persons living with brain injuries.Overview of TrustsOverview of public benefits and trustsHow trusts are used to assure financial stability for a person with a brain injuryHow much money is needed to establish a trust?Is a lawyer necessary to establish or maintain a trust?How are trusts administered what are the trustees duties?What happens to funds remaining in a trust at the death of a disabled person?

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Long, Reher & Hanson, P.APurpose of special needs/supplemental needs/pooled Trusts for Persons Living with a brain injuryWith a properly drafted and administered trust:There is no period of ineligibility imposed for benefits when assets are transferred into the trust.Tools which can be used to preserve assets and income without interfering with public benefits on which the individual relies to meet daily needs.Provide parents and families with a sense of comfort that their loved one will have access to oversight, educational, therapeutic and vocational experiences to maximize safety, self-reliance, independence, and the ability to enjoy life.

Long, Reher & Hanson, P.APublic Benefits for persons with a brain injuryNon-Needs BasedNeeds -basedSocial Security Retirement (RSDI)Social Security Disability Income (SSDI) must be certified disabledMedicareSome Veterans Benefits(note right after injury before certification of disability, some MA programs do not count assets, only income)Medical Assistance for Long-term Care -must be certified disabledSupplemental Security Income -must be certified disabled or over age 64Brain Injury Waiver Public HousingFood support (SNAP)Minnesota Supplemental Aid

Long, Reher & Hanson, P.AMedical assistance eligibilityMedical Assistance for long-term care. MA-LTC provides health care coverage for long-term care services for individuals over age 64 and those living with disabilities. Eligibility is complex but as a general rule, an individual is eligible for MA-LTC and the Brain Injury waiver when:The individual has only $3,000 in available assets; The cost of long-term care is greater than the individuals income (or the individuals income is less than $719 per month); andThe individual has not transferred assets for less than fair market value while eligible for MA-LTC or in the five years preceding the application for benefits.

Long, Reher & Hanson, P.ATrustsA Trust is an arrangement in which a person or financial institution (a Trustee) owns and manages Trust Assets for the benefit of a person or persons (the Beneficiary).The person who sets up the trust is called the Grantor or the Settlor.Many times, the Grantor and Beneficiary and Trustee are the same people!A written agreement explains the duties the Trustee owes to the Beneficiary.

Long, Reher & Hanson, P.AChoose a Trustee Carefully!A trustee has as much, if not more responsibility than an attorney-in-fact.Trustee responsible for management of assets during life and must distribute assets to beneficiaries after deathMay have to be a trustee for a minor or disabled beneficiary after Grantors deathAvoid temptation to choose the oldest child.Think of the long-term in light of paperwork, tax returns, property management, etc.Sometimes a professional trustee/pooled trust is the best option let siblings be siblingsand trustee the trustee

Long, Reher & Hanson, P.ATrusts Living TrustsA living trust is a set of written instructions for the management of income and/or assets during and after Settlors life.A trust set up in a will is called a testamentary trust and a supplemental needs trust may be set up in a will.A living trust can be revocable or irrevocable.

Long, Reher & Hanson, P.ADO ASSETS IN A TRUST COUNT FOR PUBLIC BENEFIT ELIGIBLITY?Depends :1. Revocable grantor trusts ALWAYS available2. Irrevocable grantor trusts MAY be available3. Testamentary trusts are available unless they conform with Minn. Stat. 501B.89 subd. 2 or are purely discretionary.4. Special Needs Trust exempt5. Pooled Trust sub-accounts exempt6. Supplemental Needs Trust - exempt

Long, Reher & Hanson, P.ASupplemental Needs TrustCreated for a person living with a disabilityCreated and funded by someone other than the person living with a disability or spouseDistributions must be to supplement and not to supplant government benefitsAvailable if person >64 and in nursing homeNo payback requirementCan be revocable or irrevocableCan be a pooled supplemental needs trust.

Long, Reher & Hanson, P.ASpecial Needs Trust

Established for a disabled person under age 65 by a parent, grandparent, guardian, or court Funded only with the disabled persons assetsTrust states: at death of the disabled person, any remaining trust assets must be distributed first to the State as repayment for any MA received by the disabled personTrust must be for the sole benefit of the disabled person.Trust administered so that distributions supplement and do not supplant government benefits

Long, Reher & Hanson, P.APooled special needs TrustEstablished for sole benefit of disabled person of any age by the disabled person, parent, grandparent, legal guardian, or courtOnly the individuals money is usedTrust is maintained by a non-profit corporationTrust funds are in separate account for each beneficiary but the funds are pooled for management and investment

Long, Reher & Hanson, P.APooled Trust, contdTo the extent that amounts remain upon the death of the beneficiary, the non-profit may keep 10% of the assets to be used for charitable purposes or pay back to the state.The transfer of the disabled persons assets into trust may be penalized if the person is 65 years of age or older.

Long, Reher & Hanson, P.ADiscretionary TrustConcern about a supplemental needs trust for someone over age 64: will the person need nursing home care?

Funded with assets of someone other than individual with disability or spouse

Trust assets can be distributed to the beneficiary solely at the discretion of the trustee.

No payback provision required

Long, Reher & Hanson, P.ATrust AdministrationMinimum InvestmentFeesRulesTax ImplicationsPre-Paid FuneralAccessing Trust FundsWhat Goods and Services can I buy with Trust Funds?What cant I purchase with my Trust Funds?

Long, Reher & Hanson, P.ALSS Pooled Trust

LSS Examples of Pooled Trust Fund UsageReal world trust usage by TBI Individuals

Long, Reher & Hanson, P.AWhat to Look for in a Trust?

Trustworthy + Dependable + AccessibleTrustworthy Mission, Longevity, Reputation, Oversight, Expense Control, Investment KnowledgeDependableExperienced with rules, disability and programs, local people with resources in your community, modern business practices and systemsAccessibleWelcoming, Compassionate, Approachable, Committed

Long, Reher & Hanson, P.APersonal Trustee or Pooled TrustPros and ConsPositive Strategies for Aging and Living with Disabilities Long Reher & Hanson P.A.ProsFamily Knowledge (personal, investment, business)Empathetic , lovingBrightGood Common SensePersonally InvolvedConsDecision Pressure ( a mistake can be catastrophic)No track record or experienceEmotionally involvedUnskilled at businessConflicts of interestLack of Accountability

Family MembersLong, Reher & Hanson, P.APersonal Trustee or Pooled TrustPros and ConsProsGood Business PersonTough, honest, hardworkingTrained Professional

ConsHuman (may embezzle, speculate poorly, die)Not enough time, burdenMay play favoritesLack of AccountabilityConflicts of Interest

Friend, Business Associate, Professional Advisor Long, Reher & Hanson, P.APersonal Trustee or Pooled TrustPros and ConsProsProfessionalExperiencedEstablished track recordAccountableWill always be thereNot emotionally involvedObjectiveConsDispassionateIgnorant of family affairsPoor investment performanceTurnover of staffHard to reachToo conservativeSlow to actNo local staff on the ground

The Institutional TrusteeLong, Reher & Hanson, P.AQ & AThank You! Roxanne JenkinsSenior Director LSS Of MinnesotaGuardianship Options & Pooled Trust651-310-9400

Larry PiumbroeckOutreach Representative651-310-9407www.lsspooledtrust.orgwww.lsspooledtrust.org Laurie HansonShareholder, Attorney At LawLong, Reher, Hanson, P.A.952-929-0622www.mnelderlaw.com

Long, Reher & Hanson, P.A