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# FIRST PARTY SPECIAL NEEDS TRUST (SNT)
## WHY USE A SNT & LEGAL AUTHORITY
The main purpose of a Special Needs Trust is to preserve current and future eligibility for two government benefits: Medicaid and/or Supplement Security Income (SSI). The legal authority for a SNT can be found under 42 U.S.C. §1396p(d)(4)(C). CPT Institute offers a First-Party Pooled Special Needs Trust, which is commonly referred to as a pooled trust or a (d)(4)(c) trust. A Pooled Special Needs Trust offers the same protections as an Individual Special Needs Trust, which is commonly referred to as a (d)(4)(a) trust.
## GENERAL RULES OF A SNT
In order to preserve your Supplemental Security Income (SSI) and/or Medicaid, CPT Institute must follow the three general rules below:
1. **All disbursements from the SNT must be for the primary benefit of Trust Beneficiary -** To protect eligibility for SSI and/or Medicaid, CPT Institute will only approve disbursements for the “primary benefit” of the trust beneficiary. See POMS SI 01120.203(B)(1)(e).
2. **All disbursements from the SNT must be payable to a third party. Funds cannot be made payable directly to the Trust Beneficiary -** Money directly given to the Trust Beneficiary will be considered as “unearned income”, which will reduce his/her SSI benefit on a dollar-for-dollar basis. See POMS SI 01120.200(E)(1)(a).
3. **All disbursement requests from the SNT require receipts and/or invoices to process -** As trustee, CPT Institute requires receipts, invoices, and/or other evidence to keep accurate records of all SNT transactions. The Social Security Administration Office (SSA) or the local Medicaid office may request copies of these records to verify that disbursements made from the SNT for the benefit of the trust beneficiary were appropriate. If unable to provide these records, it will be presumed that the disbursements were made inappropriately and the Trust Beneficiary will lose his/her eligibility for SSI and/or Medicaid.
## SHOULD I USE A SNT?
A Special Needs Trust can be a tremendous benefit for an individual to preserve his/her Medicaid and/or Supplemental Security Income (SSI). For example, if an individual receives funds that places them over the $2,000 resource limit, he/she will be ineligible to receive Supplemental Security Income (SSI). However, if those funds are placed into a Special Needs Trust, he/she can maintain eligibility for SSI and use the funds from the settlement or inheritance following the general rules above. If the individual has no interest in preserving his/her Medicaid and/or Supplemental Security Income (SSI), a Special Needs Trust would not be warranted. Our Quick Reference Guide titled: When to Consider a Special Needs Trust, illustrates the high cost of waiving benefits.
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San Marcos CA, 92078
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# 3rd Party Special Needs Trust
Third-Party Special Needs Trusts are established using assets from someone other than the individual living with disabilities. Typically established by a loved one while living or through specific language in a living will specifically designating funds to be placed into a Third-Party Trust. It preserves eligibility for Medicaid and/or SSI.
## IMPORTANT NOTE:
The biggest advantage is that funds within this product are not subjected to Medicaid’s first right to recovery and can pass on to remainder beneficiaries.
## LANGUAGE FOR LIVING WILL
“Funds for [client name] are to be placed into a Third-Party Special Needs Trust FBO [client name] with CPT Institute to preserve his/her ongoing eligibility for means-tested government benefits.”
## GENERAL RULES OF A SPECIAL NEEDS TRUST
1. **All disbursements from the Special Needs Trust must be for the primary benefit of Trust Beneficiary -** To preserve eligibility for SSI and/or Medicaid, CPT Institute will only approve disbursements for the “primary benefit” of the trust beneficiary. See POMS SI 01120.203(B)(1)(e).
2. **All disbursements from the Special Needs Trust must be payable to a third party. Funds cannot be made payable directly to the Trust Beneficiary -** Money directly given to the Trust Beneficiary will be considered as “unearned income”, which will reduce his/her SSI benefit on a dollar-for-dollar basis. See POMS SI 01120.200(E)(1)(a).
3. **All disbursement requests from the Special Needs Trust require receipts and/or invoices to process -** As trustee, CPT Institute requires receipts, invoices, and/or other evidence to keep accurate records of all Special Needs Trust transactions. The Social Security Administration Office (SSA) or the local Medicaid office may request copies of these records to verify that disbursements made from the Special Needs Trust for the benefit of the trust beneficiary were appropriate. If unable to provide these records, it will be presumed that the disbursements were made inappropriately and the Trust Beneficiary will lose his/her eligibility for SSI and/or Medicaid.
## SHOULD I USE A SPECIAL NEEDS TRUST?
## HOW TO SET UP A THIRD-PARTY SPECIAL NEEDS TRUST
1.Schedule a Case Consultation with a member of our staff.
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2. Complete signing of the Trust Documents.
Our team will help you identify solutions for your situation. If a trust is the best option, we will discuss how the trust operates.
A Trust instructions email will be sent immediately after detailing the process in its entirety.
If court approval is required, please see “Court Support” to learn more about how we can support you.
Book a Consultation
3. Add information regarding the trust to your will.
4. Send CPT Institute the Set-Up Fee.
# BASICS OF A SETTLEMENT MGMT TRUST (SMT)
## WHY USE A SETTLEMENT MANAGEMENT TRUST?
The ideal candidate for a SMT is an individual who needs an independent third-party trustee to protect his/her interests. The purpose of a Settlement Management Trust (SMT) is to preserve individuals that may be vulnerable to financial abuse or have the inability to spend funds in accordance with their best interest. The Trustee of a SMT screens disbursements to ensure that they make fiduciary sense. The individual may be vulnerable and may or may not be disabled.
## GENERAL RULES OF A SMT
As Trustee, CPT Institute follows three general guidelines when administering a Settlement Management Trust:
1. **As Trustee, CPT Institute has a fiduciary duty to the Trust Beneficiary -** A fiduciary duty is the highest standard one person can owe another under the law. By definition, this means CPT Institute is required to act in the best interest of the Trust Beneficiary.
2. **All disbursements from the SMT must have a direct benefit to the Trust Beneficiary -** Funds placed in a SMT must be used for the Trust Beneficiary’s primary benefit. Some examples include, but are not limited to, products or services related to the Trust Beneficiary’s health, education, maintenance, or support. In the event that the Trust Beneficiary of a SMT is a minor, a parent has a duty to provide for his/her child in a manner that is consistent with his/her own standard of living when requesting disbursements related to shelter, food, and utilities (some exceptions apply).
3. **All disbursement requests from the SMT require receipts and/or invoices to process -** A Trustee is legally required to keep accurate records and a detailed history of all disbursements.
## SHOULD I USE A SMT?
A Settlement Management Trust can be an excellent tool to protect individuals who need financial protection from others or from themselves. A SMT can be used when an individual already has some form or health insurance, but needs a low cost non-profit trustee for fiduciary oversight. As Trustee, CPT Institute will ensure that all disbursements from the trust are in the best interest of the Trust Beneficiary.
Unlike a Special Needs Trust, a SMT does not preserve government benefits such as Supplemental Security Income (SSI) and/or Medicaid. However, the SMT has “springing powers” (sometimes referred to as “trigger powers”) to become a Special Needs Trust if a Trust Beneficiary becomes eligible for SSI and/or Medicaid benefits.
# BASICS OF A CALIFORNIA MINOR’S SETTLEMENT TRUST
## WHY USE A CALIFORNIA MINOR’S SETTLEMENT TRUST?
The ideal candidate for a Minor’s Trust is an individual below the age of eighteen who needs an independent third-party trustee to protect his/her interests. The main purpose of a Minor’s Trust is to protect a minor that may be vulnerable to financial abuse or have the inability to spend funds in accordance with their best interest. The Trustee of a Minor’s Trust screens disbursements to ensure that they make fiduciary sense.
## GENERAL RULES OF A CALIFORNIA MINOR’S SETTLEMENT TRUST
As Trustee, CPT Institute follows three general guidelines when administering a California Minor’s Trust:
1. **As Trustee, CPT Institute has a fiduciary duty to the Minor -** A fiduciary duty is the highest standard one person can owe another under the law. By definition, this means CPT Institute is required to act in the best interest of the minor Trust Beneficiary.
2. **All disbursements from the CA Minor’s Trust must have a direct benefit to the Minor -** Funds placed in a CA Minor’s Trust must be used for the minor’s primary benefit. Some examples include, but are not limited to, products or services related to the minor’s health, education, maintenance, or support. **PLEASE NOTE:** A parent has a duty to provide for his/her minor child in a manner that is consistent with his/her own standard of living when requesting disbursements related to shelter, food, and utilities (some exceptions apply).
3. **All disbursement requests from the CA Minor’s Trust require receipts and/or invoices to process -** A Trustee is legally required to keep accurate records and a detailed history of all disbursements
## SHOULD I USE A CALIFORNIA MINOR’S SETTLEMENT TRUST?
A Minor’s Trust can be an excellent tool to protect minors who need financial protection from others or from themselves until they reach the age of majority. CPT Institute’s California Minor’s Trust can be terminated at age 18, and if the circumstances deem it appropriate, may continue until age 25.
A Minor’s Trust is typically used when a minor already has some form or health insurance, but needs a low cost non-profit trustee for fiduciary oversight. As trustee, CPT Institute will ensure that all disbursements from the trust are in the best interest of the minor.