» Special Needs Planning

Changing a Trust for the Benefit of Disabled Beneficiaries

An increasingly common estate planning practice is the establishment of a revocable living trust in which the creator (settlor) is also both the trustee and the beneficiary during his or her lifetime. After the settlor’s death the trust, which was revocable during the settlor’s life, becomes irrevocable, and a successor trustee takes over, distributing or managing the trust for the benefit of one or more beneficiaries. What happens when one of those beneficiaries is disabled? More and more, we are receiving questions about changing a trust for the benefit of disabled beneficiaries.

The potential problem is that the trust may include language dictating that the disabled beneficiary’s share of the trust be held in trust for his or her lifetime, and that distributions be made according to a particular standard, such as for “health, maintenance, education, and support.” If, like many disabled individuals in Ohio, the beneficiary needs Medicaid benefits, will the trust interfere with his or her ability to qualify for benefits?

Medicaid in Ohio is administered by county offices of the Ohio Department of Jobs and Family Services (ODJFS). ODJFS is likely to find… Read More

Avoiding Medicaid Estate Recovery by Planning for Special Needs Family Members

You are probably aware of how expensive nursing home costs are in this country, and that they will likely only continue to increase. You may also know that in order to meet those rising costs, more and more nursing home residents need Medicaid to help pay for care.

Unless you've had a family member pass away after receiving Medicaid benefits to help pay for their nursing home care, you may be less aware of the Medicaid estate recovery program. Essentially, this program, instituted in Ohio a few decades ago, allows the state to recoup funds it paid out in Medicaid benefits from the estate of a deceased recipient. Even more recently, the state expanded the notion of what assets qualified as recoverable under the Medicaid estate recovery program. Whereas the Medicaid estate recovery originally could recover only probate assets, the state later implemented an "augmented estate" approach that allowed the Medicaid estate recovery program to claim against assets in which the Medicaid recipient had a legal interest in the moment before his or her death. These include living trusts, jointly held bank accounts, and jointly held real estate.

The expanded reach of the Medicaid… Read More

What is a Pooled Trust?

If you are planning for the benefit of a child with special needs, you may have heard the expression "pooled trust." What is a pooled trust, and when is it in your loved one's best interests to use it?

A pooled trust is a trust that has been set up and is administered by a non-profit organization. While each beneficiary of a pooled trust has a separate account for their benefit, all funds in the trust are pooled for purposes of management and investment.

In the event of the beneficiary's death, if funds remain in their individual subaccount, the trust is required to reimburse the state for any Medicaid support provided to the trust beneficiary. The amount of reimbursement may be any amount up to the total amount of Medicaid assistance provided, to the extent that the funds are not retained by the pooled trust.

When Should a Pooled Trust Be Used?

Pooled trusts can… Read More