Small Trusts/Big Challenges Robert W. Fechtman, CELA Evan J. Krame Special Needs Alliance 2015 Fall Meeting October 17, 2015

What is a “small trust?”: Arguably, every trust, particularly SNTs Limited investment options Trust likely to be completely disbursed prior to beneficiary’s expected death Trustee’s administrative duties are disproportionately large (from the trustee’s point of view Costs of administration are disproportionately large (from the beneficiary’s point of view

Making the most out of small (or large) personal injury settlements: Consider a structured settlement annuity Based on beneficiary’s “rated age” Slows down ability to spend without saying “no” Utilize (or obtain) a Life Care Plan Refer client to, or use, a pooled SNT Fewer administrative costs Experienced with saying “no”

Minimizing administrative expenses: Tax return preparation Investment advisory fees Trustee fees Attorney fees

Controlling spending and managing expectations: Do a budget analysis Get the accountant or investment advisor involved Create a Disbursement Request form Develop a thorough trust disbursement policies letter Use the True Link card

Big ticket purchases: House Renting vs. purchasing Financing the purchase Cost of modification Who can live in the home, and will they pay rent? Taxes Cost of maintenance

Big ticket purchase, cont.: Vehicle Accessibility Are there other options New or used? Ownership Insurance Vehicle Use Agreements

Dissolving the Trust: Should the Trust be terminated? Medicaid payback? Will the beneficiary lose future needs- based benefits? What if the Trust owns a house or a car? If so, don’t wait until the last dollar! Transfer to a pooled trust? Small Trust statutes and Trust language