VOLUME 2, ISSUE 4
October, 2005
PART I: THE DOS AND DON'TS FOR TRUSTEES IN ESTABLISHING
A d(4)(A) SPECIAL NEEDS TRUST
Prior to Establishment of the
SNT
• Confirm all liens and medical claims
for reimbursed have been resolved and paid, e.g., ERISA, Medicare,
AHCCCS
• Provide input as to how much of
settlement should be structured vs. paid in lump sum if have such
opportunity, especially if you are Conservator
• Review life care plan report
(plaintiff's)
• Determine what expenses delineated in
life care plan will likely be incurred by consulting with
family
• Determine to what extent expenses
will be covered by public benefit programs by consulting with life
care planner
• Obtain rated age information
• Consider life expectancy of
beneficiary
• Structure = fixed income portion of
investment portfolio, i.e., bonds
• To extent settlement is structured,
ensure that payee is SNT
• Review draft of trust agreement prior
to its execution
• Confirm public benefits for which
eligible: SSI and AHCCCS, ALTCS, DDD, Section 8 HUD, Food Stamps or
TANF
Establishment of
SNT
• Confirm requirements under federal
law are met:
- Trust established
by parent, grandparent, guardian/conservator, or court of law
(note, if minor or incompetent adult, parent or grandparent can
only do
- Beneficiary under
age 65 at time of establishment
- Beneficiary
disabled according to Social Security criteria or is medically
eligible for ALTCS benefits
- Trust contains
provision requiring reimbursement to AHCCCS for cost of medical
services provided
- Trust references
A.R.S. § 36-2934.01 insofar as allowable disbursements are
concerned (see attached)
- Trust is
irrevocable with exception can permit amendments to comport with
law upon petition to the court
- Trust contains
provision permitting payment of reasonable compensation to
trustee
- Obtain copy of
court orders approving settlement, disbursement of funds, and
establishment of trust
- Confirm who is
providing disclosure of settlement or award and establishment of
trust to applicable public benefit agencies
- Notice must be
provided within 10 days
- Trust must be
established within calendar month of first availability of
funds
- Provide copy of
relevant court order(s), trust agreement, disbursement checks, and
verification of funding
- Cover letter
citing law as to why trust is unavailable
ALTCS Update
Effective October 1, 2005, the average
cost of care or private pay rate was increased from $4,188.72 to
$4,507.06 in Maricopa, Pima and Pinal Counties and from $3,893.53
to $4,189.44 for the balance of the state. Thus, uncompensated
transfers or gifts of less than $4,507.06 can be made without
incurring a penalty or period of disqualification from ALTCS
benefits, or, if a more substantial gift is made, the penalty or
disqualification period will be calculated by dividing the amount
of the gift by the new average cost of care rate.
2006 Medicare Premiums,
Deductibles, and Co-Pays
Medicare Hospital Insurance
(Part A)
• Deductible - $952 per Benefit
Period
• Coinsurance - $238 a day for the 61st
- 90th day per Benefit Period; $476 a day for each "nonrenewable,
lifetime reserve day
• Hospital Insurance Premium - $393
• Reduced Hospital Insurance Premium -
$216
Medicare Medical Insurance
(Part B)
• Deductible - $124 per year
• Monthly Premium - $88.50
Medicare Part D
Update
Medicare has created the Medicare
Prescription Drug Plan Cost Estimator on its web page at http://www.medicare.gov/medicareform/minitool.asp
Ms. Swartz has authored an article
titled "What Happens When a Beneficiary of a Special Needs Trust is
Denied Benefits Anyway" published in EP Exceptional Parent
Magazine, Volume 35, Issue 10, in October, 2005. Go to http://www.eparents.com for
more information.
3200 North Central Avenue
. Phoenix . Arizona