An Overview of SNTspresentation.txt

File contents

Hosted by the Kentucky Autism 
Training Center:
An Overview of 
Special Needs Trusts

Richard N. Bush, 

Attorney at Law

March 22, 2011


Topic Areas

�Federal and Kentucky statutory 
framework
�The �nuts and bolts� of an SNT
�Planning Considerations
�Additional Documents
�Summary





Federal and Kentucky Statutory 
Framework
.42 USC 1396 Subsection D (4)(A)


[exempts SNT assets as a Medicaid resource]

.42 USC 1382c (a)(3) [defines disability]
.POMS [Program Operations Manual]



Kentucky

907 KAR 1:650 

[Treatment of trusts and Medicaid]

Kentucky Cabinet For Health and Family 
services:

http://chfs.ky.gov/dms/incorporated.htm


What are the requirements for 
establishing an Special Needs Trust 
(SNT)?

When is an SNT is appropriate?


First Party versus Third Party 
SNTs

.Identical in operation
.Medicaid Recovery
.Source of funding
.Sometimes both are needed



B. The �Nuts and Bolts� of an 
SNT

How does a SNT work in the real world?

Legal Document

Sole Benefit

Who can set up a SNT?


Typical SNT Provisions

Declaration of Trust; appointment 
of Trustee and Successor Trustee(s)

Definitions; Purpose and Intent 
of Trust; Assets of the Trust

Amendments

Medicaid reimbursement

Provisions tailored to beneficiary; 
Spendthrift clause

Family/Home Living 
Arrangements

Ultimate distribution

Powers and duties of Trustee; 
Removal of Trustee

Tax provisions; generation skipping

Advisory Committee/Trust 
Protector

Misc; signatures and attachments




Planning Considerations
Who�s in charge?

Frequently parents or a sibling;

Parent issues, age, divorce, sibling rivalry

Sole Benefit Trust�Other siblings?


Planning Considerations

.Medicaid Reimbursement
.Financial Planning
.Checks and balances
.Planning for the next generation



Who should be the Trustee?

Consider�

�Fiduciary Responsibility
�Control within family
�Aging
�Co-trustees
�Distinguish: guardian and/or Social 
Security Payee





Planning for the Next 
Generation

The �pool� of future Trustees

Corporate Trustees


Checks and Balances

.SNTs are Private documents
.Potential for error
.Advisory Committee
.Trust Protector
.Guardian/advocate



Financial Planning

Critically important topic!

Long term view

Financial Planner (vs CPA?)

Taxation of trust


Additional Documents

.Last Will and Testament
.Power of Attorney
.Healthcare/Medical POA
.Living Wills (Kentucky)
.Living Trusts for Parents/siblings



Summary
Consequences of doing nothing

SNT �only game in town�

Unique to each individual and family


Summary
Plan�crystal ball gazing�

Get the best advice possible in all 
areas: 

living arrangements, financial, legal, and 
others areas


Questions?

Richard N. Bush

Attorney at Law

235 South Fifth Street

Fourth Floor

Louisville KY 40202

(502)584-7255

Bushmark4@aol.com