Self-Funded Trusts D4
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Transcript Self-Funded Trusts D4
Personal Support Trust
Sponsored by
The Arc of Northern Virginia
and
SunTrust Bank
What Is A Special Needs Trust?
It is a trust designed to:
provide benefit to and
protect the assets of
a person with a disability
and still allow the individual to
be qualified for and
receive government benefits
such as
Medicaid and Supplemental Security Income.
It can also be used to help individuals with
disabilities who cannot manage their money.
Why Do I Need A
Special Needs Trust?
In the Commonwealth of Virginia, many public services
you or your loved one receive or one day will need are
tied to Medicaid and Social Security Eligibility.
Medicaid and Social Security have limits on what the
individual with disabilities can earn each month and
save in a savings or checking account.
If you go over these limits, services can stop.
What’s the Purpose of a
Special Needs Trust?
Provides a manager to meet the needs of the
Beneficiary which may arise and cannot
otherwise be met by the beneficiary's
personal resources or benefits.
Promote the dignity, comfort and happiness
by providing supplemental care, treatment
not otherwise covered.
Who is Eligible For A
Special Needs Trust?
Anyone with a physical, mental or
intellectual disability as defined by the
Social Security Act;
Elderly;
Receiving Medicaid or Disability Income.
What is the difference between a
revocable and irrevocable trust?
A revocable trust is one that you can change during
your lifetime. In other words, you can regain control of
the trust assets or request other changes in the trust
agreement.
An irrevocable trust, once established, transfers all
control of the trust assets to the trustee and cannot
be changed. An irrevocable trust may be more
advantageous from a tax standpoint.
What Can I Use
The Trust For?
Dental Care Costs
Trips – visiting siblings; going to the beach
Renting a tux for a cousin’s wedding
Pre-need Burial Expenses
Anything not covered by Medicaid or SSI
The Trust cannot be used
for the Following:
Recipients of SSI cannot use the trust to pay for food and
shelter; including electricity, gas and water bills, property
taxes, homeowners insurance and condo association fees.
For Self-funded account holders, the trust cannot pay for
burial or funeral expenses for the beneficiary once they pass
away.
The Trust cannot hold loans.
The Trust cannot pay cash to the beneficiary.
The trust cannot make gifts or use funds for anyone other than
the beneficiary.
Types of Special Needs Trusts
Self-Funded Trusts
D4 (a) - Private
D4(c) - Pooled
Third Party Trusts
funded
unfunded
Self-Funded Trusts – d 4 (a) Private
1. Established by the parent, guardian
2. Funded by the individual
3. For the sole benefit of the individual
4. Created by a private attorney or
institution
Self-Funded Trusts – d 4 (c) Pooled
1. Established by the parent, guardian or
the individual;
2. Funded by the individual
3. For the sole benefit of the individual
4. Established with a Pooled Trust
Program by utilizing a Master Trust
Document and Joinder Agreement
Self-Funded Trusts
Most Self-funded accounts are established due to:
A personal injury settlement
An inheritance
Any other money that threatens benefits
Self-Funded Trusts
Upon the beneficiary’s death; remaining funds in the
account are subject to a Medicaid Payback Provision.
Third Party Trusts – Unfunded or Funded
May be setup by parents, grandparents, siblings, aunts
and uncles or friends.
Used frequently by parents to plan for the Future:
Set up as part of your estate planning process to
protect assets and services that your loved one is
receiving.
Avoid probate to have funds available immediately.
Ensure your loved one has a way to obtain the items,
services or the extra’s you want to make sure they
have.
These can be funded during your lifetime or left
unfunded until your passing.
Third Party Trusts –
Unfunded or Funded
May be established by a private attorney or
institution.
May be established as part of a pooled trust
program
What Is A Pooled Special Needs Trust
(a.k.a. d4c)
Managed by a Non – Profit organization
Funds from individual participants are pooled for fee
and investment purposes
Fees are calculated based on the total amount of
pooled funds
Why Choose A Pooled Trust?
Pooled trusts are administered by non-profit
agencies - professional staff, greater sensitivity
and individualized services.
Pooled trusts offer professional investment
management by a bank.
There are no minimum or maximum funding
requirements
They are more affordable for families or
individuals
How Does a Pooled Trust Work?
Beneficiary
Grantor
Primary Representatives
The Arc of Northern Virginia -
Trust Manager
SunTrust Bank - Trustee
Why Choose SunTrust and
The Arc of Northern Virginia?
The Arc of Northern Virginia:
a leading advocate for individuals and families with
disabilities for over 50 years;
knowledge, expertise, and sensitivity to meet your needs.
Pooled Trust Program has been in existence for over 10 years;
Pooled Assets currently managed: ca. $5.6 million with $3
million in future dollars;
Experts available with whom we consult about changes in
regulations;
Our service is in partnership with SunTrust Bank, a leader in the
financial services industry.
The Arc of Northern Virginia
and SunTrust Partnership
Program Design
Two levels of management
Flexible Funding Alternatives (stocks, property,
living wills, life insurance)
Ability to work directly with SunTrust Private Wealth
Management Team
Efficiency in transactions
Reduced fees
SunTrust’s Team Approach to
Managing the Trust Program
Private Wealth Management Team –
Team of specialists dedicated to serve each individual relationship
Specialists include:
Personal Asset Management Advisor
Fiduciary Specialist
Client Advisor
Insurance Specialist
Credit Advisory
Estate Administration
Team Approach to Money Management
Investment Committee
What Are The Trustee’s Roles?
Account Reporting
Asset Management
Tax Reporting
Account Administration
Check Disbursements
Asset Allocation Models
Preservation of Capital
Maximum Taxable Income with Growth
Primary Taxable Income with Growth
Primary Growth with Taxable Income
Balanced Growth with Taxable Income
Balanced Growth with Tax Exempt Income
Maximum Growth
Management of Individual’s
Accounts
Each account is assigned a separate Tax Id
number
Individual Account and Tax Reporting
Each subaccount has an individualized
portfolio allocation
Individual monthly review meetings
available
Assist clients with estate planning issues
How Do I Access the Funds Once
they are in the Trust?
Easily. You complete a simple disbursement request form
stating the purpose of the request, amount of the request and
to whom to send the check.
In many cases, supporting documentation is needed, such as
a receipt or bill.
Then send the request form to The Arc. The Arc then
forwards info to SunTrust.
We understand that everyone is different and we can be
creative in accessing funds in other ways as well; such as
direct bills.
How Much Does it Cost?
The establishment fee for the Special Needs Trust with
The Arc of Northern Virginia is $1050.00.
The annual fee for an unfunded account is $65.00 until
the account becomes funded.
The Foundation of The Arc of Northern Virginia bills 75
basis points annually of the individuals account. (. 75%)
(subject to change)
SunTrust Bank bills 90 basis points annually. (. 90%)
(subject to change)
How Do I Get Started?
Call Tia Marsili at
The Arc of Northern Virginia
703-532-3214 ext 115
[email protected]
To read more, visit our website at
www.thearcofnova.org Trust
Why Do I Need To Plan?
Creating a plan for your loved one’s future will
provide you with peace of mind.