Midwest Special Needs Trust - Safeguarding Public Benefits for People with Disabilities

1. Midwest Special Needs Trust - Safeguarding Public Benefits for People with Disabilities St. Louis Special School District November 10, 2014

2. Presentation Overview • MSNT background • MSNT as trustee • Using a Trust • Eligibility for Public Benefits • Opening a Trust • Fees • Questions & Discussion

3. Midwest Special Needs Trust (MSNT) • Is a state entity created by Missouri Statute in 1989 as Missouri Family Trust • Incorporated in 1990 • First Trust opened in 1991 • Major revisions to MFT statute effective 8/28/11 • Values-driven board appointed by Governor • Not for profit 501 c 3 • Qualifies as a pooled trust under federal policy • MSNT receives NO state or federal appropriations

4. About MSNT • Currently administers 1100 active accounts, mostly in Missouri with trust account assets exceeding $32 million • Contracts with a banking partner for account custodial services and investment management • In FY 14, the average size at opening was $16,005 • Steady growth in number of accounts and total trust assets over the last decade

6. MSNT administers both - • First Party or Self-Settled Trusts • Typical sources of funds • Back payment from Social Security • Inheritance • Personal Injury Settlement • Irrevocable • Medicaid payback required • Third Party Trusts • Family donors • Typically revocable until donor’s death • Does not require Medicaid payback

7. Decisions to be made - • Co-trustees and successor co-trustees • Authorization of fees for co-trustee(s) • Remainder beneficiaries after all expenses are paid, including Charitable Trust remainder & Medicaid payback, if applicable • Investment directive & mutual fund portfolio selection, if donor-directed • If third party, decision regarding waiver of revocability (has tax implications)

8. Inactive Trust Option • Option when trust will be funded later • inheritance • life insurance • Does require $200 up-front to set up • Enrollment fees assessed when funded so no additional costs until funded • Can be a helpful option when integrated into your will • Consult handout as a resource or call MSNT

9. Using a Special Needs Trust • Co-trustee identifies needs of the person with disability and assists to request funds from the trust with estimates/receipts • MSNT reviews each request • Must conform decision-making to fiduciary duties • Must protect eligibility for benefits • Must comply with Social Security Requirements • Processed daily • Authorize bank to prepare check for next business day • Checks are sent by MSNT to vendor or to co-trustee • $5 check fee • Committee Review for large requests

10. Examples of Trust Distributions that will reduce SSI benefits • Basic shelter-related expenses • Rent/mortgage • Basic utilities (electric, gas, water, sewer & trash) • Groceries/food, alcohol • Cash for any purpose

11. Why is all this necessary? • Annual SSA Trust Review Process • Audit/review potential • Protection of public benefits • Fiduciary duties • Preservation of assets • Sole benefit • POMS changes; NPRM expected • Potential for abuse, neglect or exploitation of vulnerable parties

12. MSNT can help with Eligibility Reviews! • MFT trusts are specifically exempted as a countable asset in MO Family Service Division policy manual • Standardized letters for new applicants & re-investigations • MO Family Support Division (FSD) • Social Security Administration (SSA) • MSNT has policy liaisons with – • MO Dept of Mental Health • MoHealthNet Recovery Unit • FSD in process • SSA KC regional office

13. Exceptions for Counting Trust Resources for Persons with Disabilities • Federal Medicaid Regulations • Title 42 US Code Section 1396p(d)(4)(A) • Title 42 US Code Section 1396p(d)(4)(C) • State Eligibility Manual for Permanent and Total Disability (PTD) Medicaid • Link @ http://www.dss.mo.gov/fsd/iman/medasst/0805-015-10.html • Supplemental Security Income • Section 1917(d)(4)(A) of the Social Security Act • Section 1917(d)(4)(C) of the Social Security Act • www.ssa.gov Fed’l & State Authority to Exempt SNTs

14. MSNT Administrative Fees

15. What does MSNT offer? • An affordable trust option • An accessible option for smaller accounts • Option for individuals with disabilities to open their own trust, if necessary • Process requests to use trust funds daily • Phone consultation with staff who are familiar with public benefits • Statutory responsibility to protect public benefits • Capability to modify trust agreement if federal rules change • More than 20 years of experience & recognition

16. Opening A Trust with MSNT • All Necessary Documents available at http://midwestspecialneedstrust.org/trustDocs/default.htm • Declaration of Trust (often called trust agreement) • Waiver of Right to Revoke for 3rd party trusts • Enrollment Fee on Sliding Scale up to $500 based on donor’s income for trusts under $10,000 • Minimum Trust Deposit of $500 • Additional deposits can be made at any time • All MSNT Trust documents were revised substantially in May, 2012 • First party trust documents revised again in November, 2012 for SSA

17. MSNT does not require consultation with an attorney but strongly encourages - • Attorneys Specializing in Special Needs & Estate Planning • National Association of Elder Law Attorneys • http://www.naela.org/public/home and click on red box at top right that says Find an Attorney • Special Needs Alliance, LLC • http://www.specialneedsalliance.org/home/ and click on Find An Attorney; or • directly to http://www.specialneedsalliance.com/locate-an-attorney

18. Handouts • Special Needs Trust Fact Sheet • ABA article on pooled trusts • Article on use of a professional trustee for SNTs • Inactive & Active Trust Comparison • Business Cards

19. “Experience is generally worth the price no matter how dearly bought.” -Unknown

20. MSNT Contact Information Midwest Special Needs Trust PO Box 7629 Columbia, MO 65205 Phone: 573-256-5055 Toll free: 1 877-239-8055 Fax: 1 573-303-5866 Email:mftbt@midwestspecialneedstrust.org Web:www.midwestspecialneedstrust.org MSNT business hours are 8:00 am to 4:30 pm

21. Questions & Discussion