In our office, we routinely assist families in creating third party special needs trusts (SNTs) as part of their estate plans. This article explains the background on third party SNTs, the options available, and our process.
First Party Special Needs Trusts
In our office, we routinely assist individuals with disabilities or their families in creating first party special needs trusts (SNTs). This article explains the background on first party SNTs, the options available, and our process.
Background
To understand SNTs, let’s use the example of Jane Smith. Jane is 30 years old, and is physically healthy but has never been able to work or live independently due to an autism spectrum disorder. Jane lives in a group home, and receives SSI and Medicaid (MA). Jane’s father, John Smith, is guardian of her person and estate.
Jane’s grandmother Jill, who has always been close to her, names Jane as a beneficiary on a life insurance policy. At Jill’s death, Jane now becomes entitled to $100,000 of life insurance proceeds. What options are available to Jane (and John)?
ABLE Accounts vs. Special Needs Trusts
WisPACT Trusts - a great planning option for children with disabilities
For a long time, I’ve been using WisPACT trusts to hold money for special needs beneficiaries. For people who are unfamiliar with special needs trusts or WisPACT, what WisPACT does is manage a pooled special needs trust (SNT). Like any other SNT, the funds are managed to supplement—not replace—government programs like SSI and MA. The pooled part means that disabled individuals have their own accounts with WisPACT. WisPACT hires a corporate money manager (currently, Chemical Bank) to manage the funds as a single pool, and gets a favorable fee structure, since it has millions to invest. WisPACT makes decisions about distributions in consultation with a trust advisor (a family member or guardian of the beneficiary).