[WSBAPT] Special Needs Trust

[Margaret Delp]

Hello all:  

 

I am helping a client on a “low bono” basis.  

 

Client is a low income disabled adult with a  certified professional
guardian who was appointed in Island County a few years ago.  The guardian
has approached me with the following scenario:

 

Client currently receives SSI benefits and Medicaid and other public
benefits.  Client is a beneficiary of a testamentary trust  which was
created in California upon the death of her parent.  The trust requires
distribution of funds when youngest beneficiary attains a certain age.
Thus, distributions to the beneficiaries (including the disabled client)
from the CA trust are scheduled to take place in August.  The distribution
will be about $20,000.  Client is 50 years of age. The Guardian is
exploring two options – have the attorney and trustee in CA amend the
existing trust to create a SNT so that the distribution scheduled for
August will not occur with respect to the disabled client.  OR, have me
draft a special needs trust in Washington.  

 

My questions:

(1)    Under (d)(4)(a), a special needs trust to supplement public
benefits can be created by the legal guardian of a disabled individual,
provided that any funds remaining in the trust go to medicaid recovery, if
any.  So, can the guardian in this case create a SNT  for the benefit of
the ward with court approval, then fund the trust with the money
distributed from the CA testamentary trust?  Would this still be a third
party (d)(4)(a) trust,?  

(2)    Are there any risks to public benefits with approach outlined in
item 1?

(3)    Would there be any benefit to amending the CA trust instead?

(4)    Would it be preferable to have the court in the guardianship case
order creation of the trust?  

(5)    For the sake of financial economy, the guardian would like to be
appointed as trustee of the SNT.  Any problems with this?

(6)    Is anyone willing to share a petition and/or a trust document from
a similar scenario?  

(7)    Does anyone want to guide me through this?  I have spent a lot of
time studying SNTs by taking CLEs, reading laws and regulations, law
review articles, treatises, the POMS, and sample documents – but am a
relative newcomer to this area of law. 

 

Thank you,

Margaret

--

Law Office of Margaret Delp

2815 Howard Road, Second Floor

P.O. Box 292

Langley, WA 98260

(360) 579-4530 (telephone)

(360) 512-3114 (facsimile)

 

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