can't seem to understand how to proceed to qualify using the countable & non countable purchases, bills, etc, just too complex for it to sink in & causing much frustration & fear as to should I or shouldn't I go ahead to create this trust.
Sounds very restricting & complicated for me even though an Atty tried to explain.
The 5 yr. look back is much too confusing for me to comprehend.
I am selling my home worth $150,000. to put into trust , moving into over 55 apartment.
My tot. yr. income now is $28, 000.
My deceased husband was a veteran, I am 79 y. o.
Many thanks !
In my experience a special needs trust is a very good thing to have for a disabled child because the parent will not always be there for them. I have a cousin who got polio in the 1950's and my aunt & uncle did a SNT for him - he is the beneficiary of the trust and he directs the trust. He is totally mentally capable but not physically capable as he has had secondary or latent polio issues. His brother and I are both on the paperwork as directors but have never needed to do anything
What a SNT should do is to place $ in the trust - the trust is it's own separate entity (kinda like it is it's own person) - that the beneficiary (your disabled daughter) can use for her care or her needs over her lifetime. It's important that it was done by an attorney in that it needs to be OK for your state law (which is complex no matter what) so that she can continue to get benefits and that the $ in the trust does not count as an asset so that she can continue to get other benefits, like Medicaid, if she qualifies.
A trust has to have a source of income to fund the trust and pay for the management of the trust (this is true whether it is a special needs trust or any other kind of trust). Your house $ - $ 150K - is probably what is funding the trust. Is that correct? The attorney may have put some of your other $ into the trust. Like if you have a CD, he could have changed the ownership of the CD to the trusts name. This is all pretty commonly done.
For me, what makes a big difference in trusts is:
- how it is managed and
- what happens if the trust runs out of funding and
- what is the disposition of the $ in the trust if your daughter should pass away -
this final part is especially important for those who are approaching the age of needing a NH. I'm not trying to be callous but here's an example....say Marie is profoundly disabled and her aunt, your sister Debbie, has done a trust for Marie for 500K. Aunt Debbie is very generous and has no kids. You are Marie's mom and you personally have a very modest income so Marie has been able to get Medicaid for her health care. Aunt Debbie's lawyer does the trust so that $500K in the trust is legally it's own entity so Marie doesn't own it but is able to get benefits from the trust, which is managed by the law firm, and Marie still qualifies for Medicaid or other state services that look at income to qualify. Aunt Debbie passes away but the trust she did for Marie still is there and now has an additional 100K from Aunt Debbie's estate. A decade goes by and the trust now has 200K as Marie has needed special care or things and the trust has lost some value over time. Marie passes away suddenly and the 200K goes to whomever is the next beneficiary of the trust. Here is why it's important how the trust is done...say you are now in a NH and you have had a modest income and you qualify for Medicaid. But you were named as the next beneficiary decades ago, then you all of a sudden have the 200K as an asset. And there is no way you can deal with this as you have dementia. What a good estate or elder care attorney can do is set the SNT so that it remains a SNT so you can benefit also or the trust could be set up so that upon Marie's death, whatever funds are left in the trust go to a charity or research foundation for Marie's disease.
79 is pretty young and it's good you are doing all this now and simplifying your life.
Call the firm and get a time set up with a paralegal. Good luck.