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How Can Funds Be Spent In A Supplemental/ Special Needs Trust?

The trustee would be the person managing the assets that are held in the trust, and they would have the ability to spend those funds accordingly. If an individual is disabled and they need something, or they want something, for example they need clothing, a wheelchair accessible van, or they want to go on a trip, the trustee has the ability to purchase those items for the person who has disabilities. The trust and the funds it holds are there to enhance that disabled person’s life, so that they can have those items that they would not necessarily be able to have if they did not have this trust put in place.

It is a way to be able to get the best of both worlds, meaning that the disabled person would be able to benefit from the funds that are held in the trust for them and continue to get the services and benefits provided to them by the federal government including Medicaid and or continued disability payments.

They can have Medicaid in place and they can have their health insurance covered through the Medicaid program and be able to continue to get income payments from Social Security because of their disability. They just have to make sure to get in touch with a Medicaid planning lawyer in New York to get the best legal advice. A Medicaid planning attorney knows everything that needs to be taken care of in the long-term care system. The attorney will also know the needs of the elderly as they have an understanding of elder law.

What Are The Limits Of A Trustee’s Authority In A Special Needs Trust?

Obviously a trustee is a fiduciary and they have to act in good faith, and they have to be responsible for their actions, and they have to properly manage the assets that are being held in the trust, and they have to be accountable. Meaning that they should be keeping records of what they are spending the monies on, and depending on the type of trust there might be required accounting to the HRA, Human Resources Administration, if the person is on Medicaid.

For instance, if the trust was created by a court, they may also be required to file an accounting with the court that established the trust. Obviously as a fiduciary on a trust they have obligations and would be required to keep records and potentially have to file an accounting for their actions as a trustee. Getting in touch with an NY probate lawyer can also prove beneficial. Probate lawyers are familiar with how wills and trusts work. The attorney can also help with probate litigation, Medicaid applications, wills and trusts, living trusts, as well as special needs planning.

What is A pooled income Trust?

A pooled income trust is a little bit different. A Pooled income trust is used to protect income with respect to a person that is trying to qualify for in-home community Medicaid that is over resourced on the income side meaning their monthly income is above $845 per month.

So for instance, you take an individual who is elderly and wishes to remain in the community, and they need an aide in their house. The Medicaid program allows for that person to qualify for Medicaid. However, that individual has to qualify on two sides of the equation. They are required to have assets under $14,500 approximately, and they also have to have an income level of below $845 per month.

The pooled income trusts for that person would be used to protect their excess income. Say an individual was getting an income of about $1,200 a month. We will use that as an example. Their first $845 a month would be able to be kept by that individual, they are entitled to keep that money, and then any additional monies above the $845 would then be placed into what is known as a pooled income trust. That excess income would then be put into the pooled trust, and then an individual would be able to submit to the third party pooled trust administrator all of their monthly bills and have them paid by the excess income that is placed into the pooled trust. It is a way for them to use all of their income to continue to pay their monthly bills and get an aid placed in their home and paid for through the Medicaid program

If they have cable, electric, food, utilities or rent, they would submit those bills to the pooled trust administrator and they would be paid. The pooled income trust is used to shield excess income. Whereas if an individual did not use that pooled income trust, their excess income, anything above the $845 a month, would have to be paid over to the Medicaid program and lost.

It makes all the sense in the world that if a person has excess income above $845 a month, to use a pooled income trust to shield their excess income from being taken without having them to have the ability to use it to pay for their expenses. It is something that definitely should be used if a person has income above $850 a month and wants to get community Medicaid, and qualify for community Medicaid, meaning that they need some help in the household.

For more information on Spending Funds From The Trust, a free initial consultation is your next best step. Our offices are based in Staten Island, New York, Brooklyn, Bronx, White Plains, Garden City, Melville, NY. Just give us a call at (718) 475-9639 for FREE Consultation.

New York Attorney Michael Camporeale

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