Special Needs Financial Planning
My goal in this newsletter is to:  
  • Share with you how I work with and provide services to my clients who have a loved one with special needs.
  • Provide education and information to you if you have a child with special needs or provide services to the special needs community. 

Please forward this newsletter to anyone you think may find the content of interest. 

Last month I asked for feedback on what information would be of interest to you in this 2nd monthly newsletter, and the topic below was most requested

I have the Trust Document, now what should I do?

As you can see, I am not starting at the basics here, if I was the first article should really be, What is a Special Needs Trust?   I promise to circle back on this topic in future newsletters.  

For the purposes of this article, I will be addressing a 3rd Party Special Needs Trust.  This is a trust funded with assets that never belonged to the beneficiary.  For example, an inheritance from parents/relatives, or proceeds from a Life Insurance policy which would name the Trust as the beneficiary vs. the individual with special needs.

In my practice, I would say that 50% of my clients have a Special Needs Trust set up when they begin working with me. Those who do have one, aren’t always sure what they should do with it once they have completed the process of obtaining the legal documents through an estate planning attorney.

*Important note - I am not an attorney; therefore,
I am not able to create any legal documents.

However, I do review all of my clients' trust documents and store them in their Cloud Storage Folder called a Vault which is accessible through the Crescendo Financial Planning Program.
Trust Self Review -  3 Questions to ask yourself?
1. Did I properly title my assets?

Most attorneys provide a SUMMARY LETTER with trust documents that provide specific direction for naming beneficiaries and titling assets to ensure all assets are flowing properly through your estate plan.
  • Find this SUMMARY LETTER and confirm you have implemented it.
  • Contact the Attorney who created your documents if you can't find.
  • Review your ASSETS at least annually if there were any assets or policies added after your documents were put in place.  

This is where I, as the Financial Advisor, can play an important role. 

  • Check your assets including real estate, retirement savings, checking, money market accounts, etc., to insure the proper owner or correct beneficiary designation are listed.

An error in title or beneficiary designation could cause unnecessary taxes, a lengthy probate and, in the worst of circumstances, the loss of governmental benefits and unnecessary, ongoing court supervision.

For example, if an insurance policy lists as one of the beneficiaries your loved one with the disability, his or her share of the proceeds will be received directly instead of being protected in the Special Needs Trust.  

2. Are my named successor trustees

Attorneys have shared with me that in their practices, one of the most common changes to a special needs trust concerns changing the trustee, trust protectors or advisory committee members.

As time passes and your loved one with special needs ages, so do the Trustees and advisory committee members you may have initially assigned.

You should look at your trust at least annually to be sure it names people who best are able to perform the duties necessary to provide for and protect your loved one.

3. Is my Trust updated based on recent changes to Social Security Guidelines regarding the “Sole Benefit Rule”?

*** This element is most important for a Special Needs Trust where a Trustee 
is currently providing distributions to the beneficiary of the Trust. ***  

On May 15, 2013, the Social Security Administration (SSA) issued a revision to POMS addressing and limiting allowable third party expenses. Payments to third parties for travel and for goods and services are allowed only in the following situations: 
  • Third party travel expenses which are necessary in order for the trust beneficiary to obtain medical treatment; and
  • Third party travel expenses to visit a trust beneficiary who resides in an institution, nursing home, or other long-term care facility (e.g., group homes and assisted living facilities) or other supported living arrangement in which a non-family member or entity is being paid to provide or oversee the individual’s living arrangement. The travel must be for the purpose of ensuring the safety and/or medical well-being of the individual; and
  • Payments to a third party that result in the receipt of goods or services by the trust beneficiary.

If your Trust was established prior to May 2013, and you will begin making distributions for the beneficiary, it would be beneficial if you reached out to the attorney who established the Trust, and/or another attorney to review the Trust document to ensure that it follows all Social Security Regulations. 

My Upcoming Speaking Events

March 1: Special Needs Planning and Understanding ABLE 

  • Project Search - Family Engagement Committee
  • Location: Goodwill Industries, Inc. (Milwaukee, WI)

March 13: ABLE Accounts and Special Needs Trust - What can ABLE Accomplish?

  • Mequon-Thiensville School District
  • VOICES Parent Committee Meeting 
  • Location - Homestead High School - Mequon

To the left are pictures from my Collaborative Learning Event on January 26th titled: What to do when your client has a special needs child? 

  • Over 40 professionals attended
  • Case Study Review 
  • CPA's, Attorneys, Financial & Insurance Professionals

All entities are separate and not affiliated with LPL Financial 

 Understanding Legal Terminology:
Testamentary Special Needs Trust
--- a Special Needs Trust that goes into effect when the trust maker dies ---

2 ways to put a Special Needs Trust into effect:

  1. You can set it up and put it in effect when you are alive 
    (an inter vivos trust)
  2. You can set it up and have it go into effect when you die 
    (a testamentary trust)

*** In both cases, after the trust goes into effect, to protect the beneficiary's 
for government benefits, it must be irrevocable. ***

Advantage of making a Testamentary Special Needs Trust:

  • You can modify the trust while you're still alive, because it hasn't yet gone into effect
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