Self-Funded Trusts D4

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Transcript Self-Funded Trusts D4

Personal Support Trust
Sponsored by
The Arc of Northern Virginia
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
 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
 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
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
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
 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
 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
 May be established as part of a pooled trust
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
 They are more affordable for families or
How Does a Pooled Trust Work?
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
 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
 Each account is assigned a separate Tax Id
 Individual Account and Tax Reporting
 Each subaccount has an individualized
portfolio allocation
 Individual monthly review meetings
 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 Trust
Why Do I Need To Plan?
Creating a plan for your loved one’s future will
provide you with peace of mind.