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For people with intellectual and developmental disabilities

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NOTICE TO ALL POOLED TRUST PARTICIPANTS:

Pursuant to sections 4.3 and 4.4 of the Master Trust Agreement dated July 20, 1999, The Arc Oregon has appointed Key Bank National Association as the new Trustee of the Oregon Special Needs Trust. The Master Trust Agreement has been amended and dated November 25, 2015. The Joinder Agreement has been amended to reflect the new Trustee and Master Trust Agreement. All changes to the Joinder Agreement apply to all current pooled trust participants and all previously executed Joinder Agreements are immediately deemed to be amended accordingly. You are encouraged to review the new Joinder Agreement documents posted on the Forms and Documents page of The Arc Oregon website. Upon your annual review date, you will receive an Updated Joinder Agreement and will be required to sign and return the document when requested. Please do not hesitate to contact our office if you have any questions!

 

Overview

A beneficiary-funded trust sub-account, also known as self-settled or first-party trusts, can be established by an individual with a disability. Money deposited into this type of account belongs directly to the beneficiary. Money used to open a first-party trust account may come from a variety of sources:

  • Social Security back payment
  • Injury settlement
  • Inheritance left directly to the beneficiary
  • Personal funds in excess of the $2000 cap asset limit for SSI and OHP
  • Tribal Income

Many people with disabilities have found this to be an effective and important tool in maintaining eligibility for government assistance, while still having access to funds for supplemental needs that are not covered by other programs.

 

Requirements for a Self-Settled Trust:

  • The trust beneficiary must be under the age of 65 when the trust is established
  • Deposits into the trust must be made before the trust beneficiary reaches age 65
  • The trust beneficiary must meet the definition of disability under the Social Security Act Title II
  • The trust must include a Medicaid reimbursement (payback) provision

 

FAQ’S

Maybe. The Joinder Agreement is a legal document and you should consult an attorney before deciding if the OSNT is the best option for you. If you are helping a person with a disability who is not competent, then you will need to retain an attorney to petition the court for permission to establish and fund a sub-account for the individual with a disability.

It depends on the attorney. You will need to contact an attorney for a consultation and cost estimate. 

Although we do not recommend or endorse any particular attorney, we do have an Attorney List that includes attorneys that are familiar with the pooled trust and who are experienced in the fields of Elder Law, Special Needs Planning, Trust Administration or Estate Planning. This list is not exclusive and we are happy to work directly with whichever attorney you choose in order to establish an account.

Yes. Parents of minor children have a legal duty to provide basic support for their children, including food, clothing, shelter and basic educational expenses. This duty ceases at age 18. Using the child’s trust fund to pay for what parents are legally obligated to provide would not be in the child’s best interest.

Disbursements from a child’s trust should be reserved for extraordinary expenses, such as expenses unique to parents whose minor children are disabled, or very large medical expenses not covered by insurance or Medicaid and not easily afforded by the parents.

Every situation is somewhat different. However, as a general rule, if the requested disbursement is for something that our laws and cultural norms generally expect parents of a minor to provide for their children, then the OSNT will be reluctant to use funds from the child’s sub-account for such requests.

Each year you will receive a 1041 tax document that you should provide to your CPA. If you do not normally file income taxes then it is not likely you will need to file taxes as a result of trust earnings, but we do recommend that you consult with a CPA or professional tax preparer to be sure. If you do owe income taxes, they can be paid from your sub-account.

All sub-accounts are irrevocable by law. If the beneficiary or key person is unhappy with a decision, they may request an appeal in writing. Grievances are reviewed by the Executive Director, the Advisory Committee and/or The Arc Board of Directors.

If a similar trust is operating in the state to which you move, and if that trust is willing to accept responsibility, a transfer can be made from our trust to the new trust. If the new trust is not willing to accept assignment, or if there is no similar trust, we retain responsibility for administering your trust account.

Once an account is established, you will receive a comprehensive Welcome Notebook with specific instructions about how to use your account, along with the necessary forms. For now, you may visit the How It Works page for more information.

Medicaid Payback

Public benefits agencies, like those who administer Medicaid and SSI (Supplemental Security Income), place a cap on a recipient’s income and assets in order for the recipient to become or remain eligible for benefits. In Oregon, individuals who receive Medicaid or SSI cannot have more than $2,000 in assets. These types of benefits are referred to as “means-tested” benefits.

When a recipient of means-tested benefits receives a lump sum of money, that money can make him or her ineligible for assistance. Fortunately, The United States Congress passed a law in 1993 allowing persons to fund their own Special Needs Trust. This law is called the Omnibus Budget Reconciliation Act of 1993, (or OBRA ’93 for short).

When Congress passed OBRA ‘93, it required that when the recipient Beneficiary passes away, any funds left in the trust must go back to the State to reimburse the state’s Medicaid program for the money it spent on the Beneficiary during his or her lifetime. Any money remaining after the State has been reimbursed can pass to the recipient Beneficiary’s estate or heirs. It is rare for any money to be left after the State has been reimbursed for Medicaid expenses.

However, in the case of pooled trusts, such as the Oregon Special Needs Trust, the law allows a portion of the funds remaining upon the death of the beneficiary, to go to an organization that assists persons with disabilities prior to the state receiving any remaining funds. Although the law allows trusts like the OSNT to retain up to 100% of the remaining balance, The Arc Oregon is currently participating in negotiations with the State to split the remaining funds between the OSNT and Medicaid. 

Regardless of how much the OSNT ultimately retains for the benefit of helping people with disabilities, in the overwhelming majority of cases, if the OSNT did not retain any of the remainder, the State would claim it all anyway.

In those rare cases where the trust account is large and the Beneficiary has been on Medicaid only a short period of time, there is the chance that The Arc Oregon’s expected remainder portion may decrease money that otherwise would pass to the Beneficiary’s estate. Again, this is rare. 

There is no avoiding Medicaid Payback when a special needs trust is funded with money originally belonging to the Beneficiary. It is important to remember, however, that there is no mandatory remainder requirement when an OSNT sub-account is funded with money originally belonging to someone other than the Beneficiary, such as parents or grandparents.

 

How is the money used?

How will we utilize the funds we retain once we reach an agreement with the State? Once we have  confirmed how much of the funds will be retained in the Trust, The Arc Oregon will develop a plan and process for using those funds to benefit Oregonians experiencing intellectual and developmental disabilities, and we will be excited to share that information when the time comes!

 

 


 
What beneficiaries say about the Oregon Special Needs Trust

You are a Godsend and I want to thank you so much for your assistance and professionalism.  You are amazing and I appreciate your efforts so much.  And you are a super nice lady.  God has blessed me with an avenue to not lose my benefits (with cancer), and you have already gone out of your way to help me.  Thank you so much.

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