Special Needs Trusts For P. I. Lawyers “What you don’t know, can cost you.”

James M. O’Reilly Nevada’s First Certified Elder Law Attorney Las Vegas, Nevada 702-477-7517

So you settled “The Big One” $ 1 mil settlement $ 5000/mo. + COLA Guaranteed for life 20 year term certain

“What, me worry?” Look what happened – you blew SSI Client’s now over resource limit Over income limit Over both resource & income limit

Why quibble over SSI? Why worry about $567/mo SSI poverty payment?

Don’t bother to quibble So long as your client is: Employable Employed Insurable Insured

What’s the big deal? Most SNT benes are now or likely to be: Unemployed Unemployable Uninsured Uninsurable

Blowing SSI can be a big deal! The magic is $1 of SSI = Medicaid Doctors Rx Treatment Hospital care Nursing home care

When an injury occurs Examine your client’s core benefits Medical insurance Social Security Medicare - SSDI Medicaid - SSI Section 8 housing CHIPS/county programs

Core benefits provide Food Clothing Shelter Basic Medical Care “Government provides the means to survive, not the means to thrive.”

To preserve core benefits - Form of settlement is crucial Outright payment Structured settlement annuity Blocked account Guardianship Special needs trust

Role of the SNT Preserves core benefits Integrates with the life care plan Enhances investment potential Protects the disabled client Supplements basic support

Role of SNT con’t Supplements basic core benefits Education Custom living/transportation Recreation Companionship Social services New medical techniques

Role of SNT con’t SNTs are NOT for basic needs NO food NO clothing NO shelter NO basic health care SNTs are NOT support trusts

The SNT Players Family - Immediate & Extended Medical team - Doctors, Psychologists, Rehab Team Asset Managers - Portfolio and Property Professionals – Attorneys, CPAs Trustee

The Perfect SNT Clearly ID the patient’s needs - Assess, Plan, Implement & Document One central point of contact Coordinated efforts - Family - Care providers - Trustee

Typical SNTs No one in charge Multiple accounts Poor case management No checks & balances Opportunities for abuse Poor integration with public benefits

Find the perfect trustee Understands public benefits Discretion used for the beneficiary Can invest wisely Understands taxes Keeps perfect books Carries insurance/bondable Immortal

SNT’s come in 2 flavors Watermelon 3rd party trusts = safer Pomegranate Self created trusts = dangerous

Watermelon Trusts General Rule - 3rd party trusts = Safer Medical/Social prognosis Family infrastructure & support Current & prospective public benefits Family’s resources

Trouble in the watermelon patch Historically safe – changing politics Ohio & NY – any discretion Still safe in Nevada Will the child move later? Problems with trustees – family always mess it up

Pomegranate Trusts Self-settled trusts = P I awards Dangerous trusts Must maintain categorical eligibility Must maintain needs based eligibility -Income limits -Resource limits

3 safe harbors for Pomegranate Trusts 42 USC 1396 (d)(4)(A) (B) & (C) D4(A) – the workhorse - under 65 - parent, grandparent, guardian, court - Medicaid reimbursement - Rule in Shelley’ case Miller Trusts (B)

3 safe harbors for Pomegranate Trusts - con’t Pooled income trust (C) - Master trust created by non-profit - Family subscribes with 2 pages - Separate accounts - Parent, grandparent, court or guardian - Funds go to charity at death - None in Nevada

Special Needs Trusts For P. I. Lawyers James M. O’Reilly Las Vegas (702) 477-7517