Where to Start
Proper planning requires that the attorney look at the unique aspects of each disabled person’s case to determine how and if the trust serves his/her current and future goals. A special needs trust is not, on its own, a care plan. It is one component, one tool, of a well-crafted care plan that is designed to maximize the benefits available to the disabled person, as well as maximize his or her independence.
For self-settled trusts, there are generally three situations when it is appropriate to create an SNT:
- Receipt of a personal injury or medical malpractice settlement;
- Receipt of inheritance;
- To preserve existing assets at the onset of disability
Third-party settled trusts can be created from the funds of another individual either during their lifetime or as part of an estate plan, such as a testamentary trust.
Step 1: Intake
We want to make sure a special needs trust is the right fit for your client. Please feel free to call our office to discuss the case. In addition, it is helpful if we have some information about your client via this questionnaire.
Step 2: Account Opening Checklist
We will need to following documents to open a new account:
- Completed joinder pages including:
• Completed Schedule C (Source of Funding) – must include employment history of person with disabilities
• Executed Schedule D – sign in fiduciary capacity
• Completed Schedule E (for beneficiaries over 65)
- Trust Beneficiary Investment Profile form
- Check made payable to “(name of client) Special Needs Trust”
- Copies of a court order to create trust and court order approving trust budget (see court checklist below)
- Completed IRS Form W-9 for disabled person (signed by the representative in their fiduciary capacity) and for primary representative. Form can be found at http://www.irs.gov/pub/irs-pdf/fw9.pdf
Step 3: Court Checklist
If the person with disabilities is under guardianship, we will provide model documents for court, including a petition/order to create a trust and petition/order to approve a trust budget. The following checklist is designed for the County of Cook. Judges in other counties may only require a Petition, Joinder Agreement and Order. Also, many counties do not require that the court maintain jurisdiction over the trust.
The following documents are needed for court:
- Notice of Motion (notice must be given to the respective government agencies)
- Joinder Agreement
- Petition and Order for Leave to Create a Trust Sub-Account in the Pooled Trust
- Petition and Order for Approval of Trust budget
Other Important Information
- • Funding of the trust should occur at the time of the approval of the budget order
- • The guardian must provide the trustee with the cost basis of securities
- • We request that the primary representative provide the trustees with the previous two years’ tax returns
- • It is the primary representative’s responsibility to apply for all governmental benefits, i.e Medicaid, SSI, DORS, DOA
- • Funding of a prepaid funeral and burial arrangements is required a the time of creation of the trust sub-account (NOTE: the trust is not allowed to pay for funeral/burial costs post death.)
- • Prior to the funding of the trust sub-account, Grantor is responsible for setting aside the Medicaid cash asset limit of $2,000.00 in a segregated account.
- discharge the guardian’s bond or replace it with a minimum bond, may be done Nunc Pro Tunc to date of funding, and;
- substitute the plenary guardianship of the estate with a limited guardianship or close-out the estate guardianship altogether and augment the guardian of the person’s authority