|
Effective: December 1, 2006 |
|
|
19.25.35.15ar1 - Supplemental Needs Trust (Archive) |
Archived: February 1, 2010 |
A supplemental needs trust is established for the benefit of a disabled person. The trust’s general purpose is to cover reasonable living expenses and other basic needs for a client when public assistance does not provide enough for those needs. The trust may allow distributions to cover these expenses.
Not all supplemental needs trusts meet the requirements for exclusion. This section details the requirements.
A special needs trust is a type of supplemental needs trust. For more information on that type of trust see Special Needs Trusts.
Requirements to be a Supplemental Needs Trust.
Exceptions to Limitations on Funds to Create Corpus.
Determining Counted and Excluded Values.
Requirements to be a Supplemental Needs Trust
To be considered a Supplemental Needs Trust, and have the value excluded from the asset total, a trust must meet all of the following conditions:
l The trust must have been established on or after July 1, 1992.
l The trust must be established to benefit a person who was certified disabled before the trust was created.
Note: If the person was certified disabled after creation of the trust, the trust does not meet the criteria for a Supplemental Needs Trust.
The disability must be based on Social Security Administration (SSA) criteria through:
n SSA.
n State Medical Review Team (SMRT).
n A licensed professional qualified to diagnose the illness or condition.
m The licensed professional must determine that the person has a physical or mental illness that substantially impairs the person's ability to care for him or herself.
m The condition must be expected to last for a continuous period of 12 months or more.
m A second licensed professional of the same qualification must confirm the diagnosis in writing.
l The trust must be funded by someone other than:
n The beneficiary.
n The beneficiary's spouse.
n Anyone who is required to pay an amount to or for the trust beneficiary under the terms of a settlement.
n See Exceptions to Limitations on Funds to Create Corpus.
A Supplemental Needs Trusts may be established by others such as parents, grandparents, or legal guardians.
l The general purpose of the trust must be to cover reasonable living expenses and other basic needs of a person with a disability when public assistance does not provide enough for those needs.
Note: The trust may allow distributions to cover all or part of the reasonable living expenses of the beneficiary.
l The trust may allow or require distributions only to supplement benefits from public assistance programs. It must prohibit disbursements to replace or reduce public assistance otherwise available.
Exceptions to Limitations on Funds to Create Corpus
The requirements for a supplemental needs trust indicates the trust must be funded by someone other than the beneficiary, the beneficiary’s spouse or anyone who is required to pay an amount to or for the trust beneficiary under the terms of a settlement.
There are several exceptions to this requirement:
l A Zebley Trust.
l A Special Needs Trust.
l A pooled trust created on or after August 11, 1993.
Determining Counted and Excluded Values
Count the trust corpus of the following:
l A Miller Trust/Qualifying Income Trust.
l Supplemental Needs Trusts that do not meet the criteria to be excluded as Special Needs Trusts may be considered available assets.
l Supplemental Needs Trusts established on or after July 1, 1993 to benefit a client who meets all conditions of the following conditions:
n Is over age 64.
n Becomes a patient or resident in a state institution or nursing facility for six months or more.
Note: Do not consider a group residential housing (GRH) facility to be a state institution or nursing facility for this purpose.
n Has no reasonable expectation of discharge from the institution because of medical need for institutional care. Accept a physician's statement that there is a reasonable expectation of discharge.
Exclude the trust principal, interest and/or gain from investing the principal from the asset total and count payments to the beneficiary as unearned income of the following types of trusts:
l Zebley Trusts.
l Special Needs Trusts.
l Supplemental Needs Trusts that meets the requirements.