Planning for Life

Why You Might Want a SECURE SNT

Posted by Harry S. Margolis on August 15, 2020

By Harry S. Margolis

SNT-Special-Needs-Planning-attorney-Wellesley-MA-02481

As we've discussed before (here), the SECURE Act, passed at the end of 2019, changed a number of rules regarding inherited IRAs, making it more difficult to "stretch" them for most beneficiaries. However, an exception to the new rules could upend the advice we've often given clients doing special needs planning.

Read More

Topics: special needs planning, Retirement Planning, Special Needs Trust

What is Settlement Planning?

Posted by Harry S. Margolis on April 1, 2020

 
settlement-planning-special-needs-attorney-Wellesley-MA
 
A settlement or award of damages in a personal injury case means the end of litigation. It’s the biggest step – but only the first step – in assuring your financial future. You need to make sure that the award is maximized, that the funds are safeguarded, and that you preserve your eligibility for public benefits. This involves a number of issues, including:
 

Resolving Liens – Personal injury settlements and awards to minor or disabled plaintiffs are often subject to claims by Medicare, Medicaid (MassHealth), or private insurers. These must be resolved prior to any distribution of funds. It's often best that this be done as part of settlement negotiations, because a lien holder—the state, federal government, or insurance company—has an incentive to help the case settle. Your personal injury attorney will resolve any of these liens as part of the litigation.

Read More

Topics: Medicare, special needs planning, MassHealth, personal injury settlement

What You Need to Know about Special Needs Trusts and Taxes

Posted by Harry S. Margolis on January 22, 2020

By Harry S. Margolis

special-needs-trust-Wellesley-tax

Trusts created for individuals with special needs generally fall into two broad categories: those created with the beneficiary's own funds, often from the proceeds of a personal injury settlement, and those funded by third parties, often by parents and grandparents. The tax treatment of the two trusts is somewhat different.

Read More

Topics: special needs planning, income taxes, Special Needs Trust

SNT vs. ABLE Account: Which Makes More Sense for You

Posted by Harry S. Margolis on October 15, 2019

By Harry S. Margolis

ABLE-accounts-special-needs-trusts-Wellesley-MA

We have prepared a handout to assist beneficiaries of Supplemental Security Income and other public benefits programs to determine whether they're better off using ABLE accounts or special needs trusts, or both.

Both ABLE accounts and SNTs permit the beneficiary to maintain eligibility for public benefits programs will being the beneficiary of funds held in reserve, but both also have their advantages and drawbacks. Here are a few of them:

Read More

Topics: special needs planning, supplemental needs trusts, Special Needs Trust, ABLE Accounts, Attainable Savings Plan, Supplemental Security Income

Trustee Beware—Fee Petition Turned Down

Posted by Harry S. Margolis on April 9, 2019

Photo by Sam Mathews on UnsplashBy Harry S. Margolis

Unlike a conservatorship, most trusts don't require court approval for a trustee to be paid. But that can be different where the trustee is court-appointed. In a California case, Thomas Thorpe v. Audelith Jenivee Reed, Trustee, et al. (Ct. of App, 6th App., CA H037330, Dec. 13, 2012), the court denied the petition of a court-appointed trustee of a special needs trust for compensation.

Danny, the beneficiary of the trust, received compensation for injuries he suffered while attending the Burning Man festival in 1996 when he was 21 years old and a drunken driver drove through his tent.  Danny's mother was named as trustee of the trust.

Read More

Topics: trusts, special needs planning

When to Use an ABLE Account

Posted by Harry S. Margolis on January 29, 2019

By Harry S. Margolis

ABLE-account-special-needs-planning-attorney-Wellesley-MA

ABLE accounts were created by the Achieving a Better Life Experience Act of 2014 as an alternative to special needs trusts and to share the benefits of 529 plans for people who are unlikely to pursue higher education. They only go part way towards those goals but nevertheless can be very useful in providing flexibility around very strict public benefit rules, especially those of the Supplemental Security Income (SSI) program.

Read More

Topics: special needs planning, Special Needs Trust, ABLE Accounts, Attainable Savings Plan

Divorce-Created SNT Deemed Self-Settled for Creditor Purposes

Posted by Harry S. Margolis on January 22, 2019

By Harry S. Margolis

SNT-creditor-special-needs-trust-estate-planning-attorney-Wellesley-MA

In determining eligibility for MassHealth and Supplemental Security Income (SSI), the state and federal agencies treat self-settled trusts—those created by the applicant for benefit—and third-party trusts—those created by someone else—entirely differently. The assets held in a self-settled trust are considered available to the applicant for benefits to the extent the trustee has discretion to distribute them to the applicant or to use them for her benefit. The assets of a third-party trust are only considered available to the extent the trustee actually distributes them to or uses them for the applicant for benefits.

These rules track the rules for creditors. With some exceptions, creditors can gain access to assets in trusts created by the debtor and cannot gain access to trusts created by someone else for the benefit of the debtor. The issue in the case of Calhoun, et al. v. Rawlins (93 Mass. App. Ct. 458, June 27, 2018) is whether a trust created by one divorcing spouse for the benefit of the other spouse is protected from the creditors of the beneficiary spouse. This has significance for special needs planning because it's not unusual for a special needs trust to be created in the context of divorce.

Read More

Topics: special needs planning, divorce, Special Needs Trust, creditor protection

Congress Passes Special Needs Fairness Act

Posted by Harry S. Margolis on December 9, 2016

By Harry S. Margolis

special-needs-trust-estate-planning-Wellesley-MA

As part of the 21st Century Cures Act which passed in 2016, Congress has finally corrected a glitch in the law dating back to 1993. Back then, Congress authorized the creation of so-called (d)(4)(A) trusts which permit people with disabilities under age 65 to shelter funds and still qualify for Medicaid (MassHealth in Massachusetts) and Supplemental Security Income. A quirk in the law has required these trusts to be created by a parent, grandparent, guardian or court, even if the beneficiary is competent to create the trust herself. This has limited the availability of these trusts and required expensive proceedings in court which have often delayed eligibility for vital public benefits.

Read More

Topics: trusts, special needs planning

What's a Trust and Why are There So Many Different Kinds?

Posted by Harry S. Margolis on October 18, 2016

By Harry S. Margolis

revocable-trust-irrevocable-living-special-needs-QTIP-QDOT-attorney-Wellesley-MA

A trust is a legal entity that permits one or more people (the "trustee" or "trustees") to manage property for the benefit of other people (the "beneficiaries"). The third actor in a trust is the person who creates it—the "grantor" or "donor." To confuse things a bit further, the same person can be a grantor, trustee, and beneficiary, but he can't be the only one in all three roles. And the property in the trust can be just about anything you can own—real estate, bank accounts, investments, or artwork.

Read More

Topics: special needs planning, Estate Planning

Get On It! The Centralized Section 8 Waiting List

Posted by Harry S. Margolis on June 14, 2016

On the day your intellectually disabled child turns 18, give yourself a birthday present – put him or her on the Section 8 waiting list.  The Section 8 housing choice voucher program is the federal government's major program for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market. In the Boston area, it usually takes eight to ten years to get a voucher, starting from the day you first submit the pre-application. 

Once a person obtains a voucher, the federal government will pay part of his or her rent for life. So the sooner your child is on the list, the better.

Read More

Topics: special needs planning, housing policy ,, special needs

Subscribe to New Blog Posts

Recent Posts

Most Popular Posts

Posts by Topic

see all

Want to Book a Consultation?