1. Presented by: Amelia Crotwell, Certified Elder Law Attorney Elder Law of East Tennessee

2.  Explain the connection between Medicaid or means-tested benefits and excess income/resources.  Describe the challenges to negotiating this relationship and the use of Special Needs Trusts.  Communicate the benefits of ABLE Act and contrast with Special Needs Trusts.

3.  Means-Tested Benefits require that the recipient meet certain income and resource limits to qualify.  Some benefits also require that recipients meet the SSA definition of disability.  Medicaid/TennCare  SSI  Temporary Assistance to Needy Families (TANF)  Qualified Medicare Beneficiaries (QMBs)  Section 8 Housing  Food Stamps  Cover Kids or Children’s Health Insurance Program (CHIP)  Veteran’s Benefits

4.  An individual is considered to be disabled if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to last for a continuous period of not less than 12 months.

5.  Medicaid – health care for persons who are aged, blind or disabled  SSI – cash benefit from the Social Security Administration for persons who are aged, blind or disabled (automatically eligible for M’caid)  TANF – cash assistance to parents who have fallen on hard times (automatically eligible for M’caid)  QMB – state M’caid program pays Medicare premium and helps with medical and drug costs

6.  Section 8 – rent subsidy via voucher or reduced rent in a public housing complex  SNAP – food and nutrition assistance  CHIP – low or no cost health insurance  Veteran’s Benefits - Low Income Pension, Special Compensation, Housebound Benefits, or Aid and Attendance

7.  Qualified Medicare Beneficiary (QMB)  Specified Low-Income Medicare Beneficiary (SLMB)  Qualifying Individual (QI)  Qualified Disabled and Working Individuals (QDWI)  Extra Help (Low Income Subsidy)

8.  When a person qualifies for a means-tested benefit, receipt of excess resources can cause them to lose the benefit.  It is critical to know the available options for safeguarding these funds for the benefit recipient’s wellbeing and quality of life.

9. Special Needs Trusts  3 rd Party  d4a  d4c Savings Account  ABLE Account

10.  Two Kinds of Trusts:  Self-Settled  Third Party  Distribution Guidelines make a trust a SNT.

11.  Assets to fund the trust belong to the person with a disability  Payback provision required  Irrevocable  d4a and d4c  No transfer penalty for grantor  When to Use:  Inheritance  Settlement  Any large sum received by the person with a disability

12.  Established by Parent, Grandparent, Conservator, or Court  Irrevocable  Inter Vivos  One Lifetime Beneficiary  Under Age 65 and Definition of Disability  Payback Provision

13.  Established by Parent, Grandparent, Conservator, Court, or the Person with a Disability  Irrevocable  Inter Vivos  One Lifetime Beneficiary  Any Age and Definition of Disability  Payback Provision  Trustee must be a non-profit and a separate account must be maintained for each beneficiary

14.  Assets to fund the trust belong to a third party (e.g. parent)  No payback requirement  Revocable or irrevocable  Potential transfer penalties if third-party grantor requires benefits  When to Use:  Parents with child receiving benefits  Spousal supplemental needs

15.  Assets of a Third Party  Typically the Parent of a Child  Beneficiary of Any Age  No Payback Provision Requirement  Revocable or Irrevocable  Estate Planning:  List a contingent beneficiary  Part of Last Will for spouse or child

16.  Who should be appointed as trustee?  Independent trustee preferred  Family member and independent as co-trustees  Trust advisor can assist if a trustee needs to be replaced or removed  Distributions should not be made directly to beneficiary  Avoid distributions for food and shelter (SSI recipients)

17.  “Achieving a Better Life Experience” Account  Disabled before Age 26  Distributions controlled by DIDD/State of TN Contractors  Payback Provision  Can be transferred to another family member disabled before age 26  Limits $14k/year; Total $100k  May be available January 1, 2016  Status Update on Federal Regulations and Tennessee Availability

18. Let’s review handouts together.

19.  Wanda and Harry are the parents of Alicia, Joe, and Brock.  Alicia receives SSI, TC and Waiver.  Wanda and Harry have a home worth 100k and bank accounts and investments worth $200k and and Harry has an IRA of 300k.  Joe and Brock do not have special needs.  Wanda and Harry suggest that they will disinherit Alicia and give all their assets to Joe and Brock so Joe and Brock can “take care of” Sis.

20.  Gary is 50 years old  Gary is on the DIDD Statewide Waiver and receives SSI and TC.  His Aunt Aida, his closest living relative, just died leaving him a home worth $400,000, an investment account worth $300,000 and her car, a Mazda Miata $15,000.  Aunt Aida did no planning.

21.  Becky is 35.  She is disabled as a result of a car accident at age 28.  She receives SSDI, SSI, Medicare, TennCare, food stamps, and lives in Section 8 housing.  Her father died and left her a small life insurance policy worth $50,000.  She has no family to help her manage the money.

22.  Bronwyn is 45 and was born with a disability.  She gets SSI and DIDD waiver services. She gets TennCare too.  She works in a sheltered workshop and sometimes earns up to $500 per month in income.  Bronwyn’s parents and grandparents sometimes like to make gifts of cash to her for special trips and things.  She can’t find enough ways to spend her money and she likes to save.  Her brother, Pierce, also has a disability and also receives SSI.

23. Contact us: Elder Law of East Tennessee 903 N. Hall of Fame Drive Knoxville, TN 37917 865-951-2410 info@elderlawetn.com www.elderlawetn.com