[WSBAPT] Beneficiary On State Benefits - No Special Needs Trust

[Angela Macey-Cushman]

Hi Brent,

Nick is right---this would need to be a First-Party SNT with payback language.  The beneficiary (or their legal representative, or certain family members) could establish the trust, but not the estate.  If the beneficiary is incapacitated, the GAL should be involved at this point and SPR 98.16W will apply.

Sometimes the beneficiary will direct the PR to distribute their share directly to the new trust, but I don't believe a TEDRA is necessary for that.

There could be transfer penalties if the beneficiary is over 64.  So, the estate should keep this in mind if the beneficiary is nearing this age.

Sometimes a trust is not needed.  It depends on the benefits, the amount, and the spend-down options.  And also what the beneficiary wants to do, frankly.

And, if it is a small amount (which sounds like it might be the case), a pooled-asset trust is also a good option.  Lifetime Advocacy Plus and the PACT Trust are good places to start. or the DD Endowment Trust if the beneficiary has developmental or intellectual disabilities.

I'm happy to talk more, just give me a call.

-Angela

Angela Macey-Cushman
Attorney, Shareholder
Somers Tamblyn Isenhour Bleck PLLC
701 Pike Street, Suite 1510, Seattle, WA 98101    T 206.340.2200
angela at stiblaw.com<mailto:angela at stiblaw.com>   http://stiblaw.com<http://stiblaw.com/>


From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Nick Pleasants
Sent: Wednesday, July 27, 2022 6:03 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Beneficiary On State Benefits - No Special Needs Trust

[External]
You could potentially create a Special Needs Trust for the beneficiary, but then I believe it would have to be a First-Party Trust with state payback under 42 USC § 1396p(d)(4)(A).
If the estate is as modest as you say, perhaps the better route is to find ways to spend down on exempt assets, e.g. buy them a car.
One of our Medicaid gurus could advise on this. I would give Sean/Barbara/Angela at STIB a call.
Best,
Nick
Nicholas Pleasants | Shareholder

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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Brent Williams-Ruth
Sent: Wednesday, July 27, 2022 12:03 PM
To: WSBA Probate & Trust Listserv <WSBAPT at lists.wsbarppt.com<mailto:WSBAPT at lists.wsbarppt.com>>
Subject: [WSBAPT] Beneficiary On State Benefits - No Special Needs Trust

Brain Trust -

I have a beneficiary of an estate (rather modest) that is on state benefits. The Will was not written for a Special Needs Trust.

Would this be a good situation for a TEDRA where the adjustment is simply changing from the named beneficiary to a Special Needs Trust?

Appreciate any insights.

Brent Williams-Ruth (pronouns: he/him)
Attorney-At-Law

Law Offices of Brent Williams-Ruth, a division of BWR Consulting, PLLC

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