[WSBAPT] Self-Settled SNT Question

[David Faber]

(C)lient's (D)aughter is a disabled person. D inherited ~$100k in
securities about 10-15 years ago and C worked with another attorney to
establish a self-settled special/supplemental needs trust (SNT) for the
securities at that time so that D could continue to receive public
benefits. C owns the house that D lives, all under C's revocable living
trust (that, at C's death, will fund a separate SNT created for D that is
not subject to the payback provision and has other residuary
beneficiaries). D's house now is in need of some substantial work (the roof
needs replacing). C is struggling to afford to pay for the repairs and
wants to take money out of the SNT to pay for it. My concern is that taking
money out of the SNT to provide for the upkeep of an asset owned by C would
be a disallowed use of the resources and, in the case of C's death, could
even subject some of C's assets to the payback provision in the existing
SNT.

My first question is: do I have the right of it or am I overthinking this?

My proposed course of action is to have a supplemental lease signed between
the SNT and C to charge the SNT some supplemental rent (D is currently
paying C rent from D's SSDI in the amount of about $350/month) to be
commensurate with market rent locally (probably an additional $400/month
wouldn't even begin to raise eyebrows in our current rental market), with
the rental agreement expressly finding that it is a supplemental expense
not covered by D's existing public benefits, thereby providing C with some
additional resources to pay for needed repairs on D's home.

My second question (presuming I am correct in my thinking in response to my
first question) is: does anyone with knowledge about self-settled SNTs
think this is a workable approach or do you have any other suggestions for
how to make this square?

Thank you.

Best,
David J. Faber
Faber Feinson PLLC
800 Polk Street, Suite B
Port Townsend, WA 98368
(360) 379-4110

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