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

Fri Jul 29 11:23:11 PDT 2022

 I'm glad you reposted, Jim. That was a head-scratcher ;)

    On Thursday, July 28, 2022 at 10:34:30 AM PDT, <jbdolan at jbdolan.com> wrote:  

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Sorry for the repost – I botched the first attempt.  Now that I have had my second cup of coffee, I will try again:

Brent:

I have relied on In re Riddell a few times to do exactly what you are trying to accomplish – convert an outright testamentary distribution into a distribution to a testamentary SNT, supported by a court order.

Jim Dolan

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Angela Macey-Cushman
Sent: Wednesday, July 27, 2022 6:44 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Beneficiary On State Benefits - No Special Needs Trust

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   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 

11225 SE 6th Street | Suite 100 | Bellevue, WA 98004
Main: (425) 455-3900 | Fax: (425) 455-9201 | E-mail: npleasants at ohswlaw.com 

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From: wsbapt-bounces at lists.wsbarppt.com <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>
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

Physical Address: 500 S 336th Street, Suite 214; Federal Way, WA 98003

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