1. The Role of the Special Needs Trusts when Planning for the Future
The Arc of Northern Virginia - Special Needs Trust Program serving VA, MD and DC
The Role of the Special Needs Trusts when Planning for the Future
Tia Marsili
Director of Trusts
Special Needs Trusts & Futures Planning The Arc of Northern Virginia

2. Content: Introduction Special Needs Trusts (SNT)
Types of Special Needs Trusts
How does The Arc’s trust work?
Disbursement Process
Five case studies
How our team supports SNT clients
ABLE (Achieving a Better Life Experience)
SNT fees?

3. The Arc of Northern Virginia
One of app chapters of The Arc
Membership driven
World’s largest community based organization of and for people with intellectual and developmental disabilities with over 50 years of experience.
We know, live & “get” the world of disabilities
One-Stop-Shop – with up-to-date information and expertise in the disability arena

4. Investment Management
Key Private Bank
Investment management
Credit and Banking
Trust
Investment Management
Trust
Credit and Banking
160 Years of impartial fiduciary service
$5B in assets under management
$9B in assets under administration
300+ highly credentialed advisors
Our new partner!

5. 6 Things to consider when Planning for the Future
Letter of Intent
Legal Authority
Government Benefits
Estate planning
Financial planning
Special Needs Trust (SNT)

6. Questions Going Forward
How can you leave money to your child with disabilities without jeopardizing their government benefits?
How can s/he accumulate more than $2,000 and not lose government benefits?
Who will manage the money?
How can you guarantee that funds
will be available once you’re gone?

7. 1. Special Needs Trust (SNT)
A legal vehicle designed to provide benefit to and protect the assets of a person with disabilities and still allow the individual to be qualified for and receive government benefits. When written properly, all government benefits stay in tact. A person with disabilities can indirectly (through the SNT) receive a portion of the estate. (Federal Statute 42 USC 1396 p (d)(4)(a) and (d) (4) (c))
See: Federal Statute 42 USC 1396 p (d)(4)(a) and (d) (4) (c)
Special Needs Trusts & Futures Planning The Arc of Northern Virginia

8. Why Establish a SNT? Protect government benefits
2. Help with money management and longer-term financial planning
3. Promote the dignity, comfort and happiness of the individual with disabilities
To be eligible to receive SSI benefits based on disability, a claimant or current recipient cannot have more than $2, in assets or resources.
Assets include all income and countable resources of the individual and of the individual's spouse such as liquid resources in a savings account, cash value in life insurance policies, additional motor vehicles, and real property other than the home in which a claimant resides.
Tia Marsili

9. Who is eligible for a SNT?
Anyone with a physical, mental or intellectual disability as defined by the Social Security Act

10. 2. Types of Special Needs Trusts
Third Party Trusts
Funded and Unfunded
Private or Nonprofit
First Party Trusts
D4 (a) - Private
D4(c) - Pooled

11. Third Party Trusts- Unfunded or Funded
The Arc
Private
Financial Institution
The Arc: Manager
Trustee: Key Private Bank
One-time nominal fee for enrollment
Management & Trustee fees
Experts in disabilities and finance providing client relations
Continuity, reliability
Grantor chooses remaindermen beneficiaries
(Co-)Trustee administers
Attorney fees
Trustee may charge &/or outsource services, investment fees
Depends on person(s)
If named, successor trustees may carry on
Bank administration & investment fees
Depends on bank personnel
Depends on Bank’s continuity

12. Family-funded Trusts
Established by parents, relatives, friends as part of the Futures or Estate planning process with The Arc, an attorney, or financial institution
Funded commonly at second to die; also possible to fund prior to death
Funded with an inheritance, life insurance policy, transfer from another trust, contributions, etc that are directed to FF SNT
Remainder beneficiary (who inherits when the Beneficiary passes) is decided by the Grantors establishing the trust

13. Self-Funded Trusts
Established by an individual with disabilities, parent, grandparent, guardian or court-ordered
Established only when necessary; when a person with disabilities needs to protect benefits and/or cannot manage money
Funded commonly with an unexpected inheritance, lump-sum pay back, settlement, income, child support, survivor benefit directed to the individual
Remainder in trust at death: Medicaid payback or nonprofit contribution

14. Avoid These Common Mistakes
Mistake 1: Bequeathing assets
directly to the child from a parent,
grandparent or other relative
Mistake 2: Naming the child as beneficiary of the life insurance policy, annuity or retirement plan
Mistake 3: Directing the child's inheritance to another family member to manage on behalf
of the child
One: This may disqualify them from government benefits and they may not be capable of managing the assets. Mistake 2: This also can disqualify them from government benefits. MISTAKE 3: These assets would then be subject to any bankruptcy, divorce, creditors, seizure or litigation against the assets' owner, or the owner may die before the child, in which case the assets would be subject to the terms of the owner's will.
Tia Marsili

15. 3. How Does The Arc’s Trust Work?
Beneficiary
Grantor(s)
Primary Representative(s)

16. The Arc of Northern Virginia
Our SNT Team
The Arc of Northern Virginia
Manager
Key Private Bank
Trustee
Expertise:
Services for people with disabilities
Understanding of current benefits eligibility requirements
Grantors’ wishes
Beneficiary’s needs and priorities
Asset allocation
Asset management
Account reporting
Tax reporting
Check writing/disbursing
Real estate
Tia Marsili

17. Strengths and Limitations of The Arc’s SNT
Low fees
No minimum
Experts current on disability regulations
Great investment vehicle
Account & Tax reporting
Minimal family responsibility
Multiple checks & balances
You don’t hold the checkbook
Closed on the weekend

18. The Arc Trust Program’s Growth (number of trusts per year)

19. 4. Disbursement Process Complete Disbursement Request form
Gather supporting documentation
Send the completed request form and documentation to The Arc
We verify all aspects

20. For example, a SNT can cover:
Dental Care Costs
Vacations
Phone bills
Clothes
Veterinary Bills
Hobbies
Car insurance
Pre-need Burial Expenses
Anything not covered by Medicaid or SSI

21. 5. Five Case Studies

22. Case 1: Parents with 10 month old
Infant has disability diagnosed at birth. As part of their planning, parents decide to schedule an appointment and establish directly with Tia an Arc Family-Funded SNT (FF SNT).
They amend their wills so their estates will partially fund the new trust.
They designate their son’s trust as the beneficiary in their life insurance policies.
They contribute $100 in initial funds to open the trust sub account.
They ask friends and family to contribute to the trust at key life
events (wills, birthdays, holidays, other milestones, etc).
5. They are contemplating disbursement priorities at this time.
Tia Marsili

23. Case 2: Teenage auto accident victim
Attorney informs victim and her parents she will soon receive a settlement.
The family agrees their daughter should consider a SNT and parents
select to establish a Self Funded Trust (SF SNT). They schedule an appointment with Tia to establish the SNT with The Arc.
The Arc’s SNT ensures funds will be managed for daughter’s benefit.
As she nears age 18, SF SNT will ensure recently received settlement funds do not jeopardize her eligibility for SSI and Medicaid.
The family plans to disburse the SF SNT funds to finance post-secondary education as well as special equipment and other supports she will may need throughout her life.
The family is contemplating when to open Family-Funded trust.
Tia Marsili

24. Case 3: A 17 year old with a developmental disability
As their daughter approaches age 18, parents realize her assets (bonds & savings account) will exceed SSI* resource limit ($2,000)
The parents help their daughter establish directly with Tia at The Arc a Self-Funded Trust so daughter’s assets can be transferred to her new trust for her future needs.
The parents also revisit their plans & write a Family-Funded Trust directly with Tia at The Arc.
The parents amend their wills and other estate documents to reference the new Arc Family-Funded Trust which will be funded upon the 2nd parent’s death
The parents receive a 50% discount on the second trust’s enrollment fee ($525).
They pay the enrollment fees for both trusts via The Arc’s monthly
payment plan. g
Tia Marsili

25. Case 4: Single, unemployed woman with SSDI*
After working for 10 years, woman with a mental health diagnosis struggles
with money-management and frequently relies on parents to avoid or settle
crises. As part of their planning, aging parents schedule an appointment to
establish a Family funded SNT directly with Tia at The Arc.
They decide to immediately fund the trust with $6,000 and write a clear, specific Letter of Intent for the trust to help with certain necessary monthly expenses (e.g. medication co-pays, local transportation, dental care).
Parents amend their wills so their estates will add funds to the trust when the 2nd passes away.
The Arc’s SNT team meets with client to explain and implement the plan.
Networking with other involved parties (therapist, case manager, local family member), The Arc team supports individual’s gradual transition from dependency on elderly parents to guided, realistic spending via the
FF SNT.
Tia Marsili

26. Case 5: Mature adult with disabilities in group home
Parents need to update their estate planning documents so they schedule a free consultation with Tia regarding their adult daughter who lives in a group home. They meet again with Tia to establish a Family-funded Trust.
Parents choose to unburden family members with Trust administration and
amend their wills so their estates, insurance policies and retirements will add
funds to the trust when the 2nd parent passes away.
Parents deposit seed money to fund the Trust so the Beneficiary and Primary
Representatives (PR) become comfortable with disbursements.
The Arc’s SNT team meets with Grantors, Beneficiary and PR to explain the FF
SNT and answer questions.
When parents pass, The Arc Trust team continues to network with the involved parties supporting the individual during his transition away from his parents
and onto PRs.
Tia Marsili

27. 6. How Our Team Supports SNT Clients:
The Arc of Northern Virginia
Manager
Key Private Bank
Trustee
Pre-Funding:
Educate and plan with family
Prepare trust paperwork
Facilitate trust plan preparation
Review & approve trust documents
Trouble-shoot special situations
Ensure compliance
Once
Funded:
Review & process client disbursement requests
Ensure each disbursement aligns with grantors’ priorities & beneficiary’s needs
Maintain up-to-date documents & trust plans
Coordinate, with consent, with case managers and other stakeholders supporting beneficiary
Process disbursements
Distribute statements
Conduct reviews
Provide fiduciary services related to the trust
Didn’t we want to take out the flexible funding alternatives?
Tia Marsili

28. Figure 2: Market Value of Our Funded Trusts, 2006-2014

29. 8. SNT fees The Arc’s one-time enrollment fee: $1050.00 Annual fee:
Second trust for same individual or their sib: $525.00
Annual fee:
Unfunded account: $ OR
Funded account:
The Arc’s Annual Management fee drawn quarterly: % (subject to change)
Key Private Bank’s Annual Trustee fee drawn quarter: %
(subject to change)
Closing fee: $ (subject to change)
Tia Marsili

30. How To Get Started: Tia Marsili Director of Trusts
Phone: x 115
Fax:
Visit our website: