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I have a disabled family member who inherited a lump sum of money when a grandparent died. Can these funds be put into a trust?

Consider a First Party Special Needs Trust.
A First Party Special Needs Trust is funded by the beneficiary’s money – a personal injury settlement, inheritance, alimony, etc. If a disabled person receives a lump sum such as this, it disqualifies the person for public benefits (e.g., SSI and Medicaid) now and in the future, since it is an increase in assets. Setting up a First Party Special Needs Trust enables the beneficiary to retain the additional finances without jeopardizing public benefits.

How does the Corporation of Guardianship serve as Representative Payee?

If CoG is serving a client in the role of Guardian, Trustee or Power-of-Attorney, we can also serve as Representative Payee. As Representative Payee, Corporation of Guardianship has the following required responsibilities as outlined by the Social Security Administration:
– Determine the beneficiary’s needs and use their payments to meet those needs.
– Save any money left after meeting the beneficiary’s current needs in an interest-bearing account or savings bonds for the beneficiary’s future needs.
– Report any changes or events which could affect the beneficiary’s eligibility for benefits or payment.
– Keep records of all payments received and how we spent and saved them.
– Provide benefit information to social service agencies or medical facilities that serve the beneficiary.
– Help the beneficiary get medical treatment when needed.
– Report any changes that would affect CoG’s ability to continue serving as Representative Payee.
– Complete written reports accounting for our use of funds.
– Return any payments to which the beneficiary is not entitled to the Social Security Administration.

What is a Representative Payee?

A Representative Payee is a person or an organization appointed by the Social Security Administration to receive the Social Security or SSI benefits for anyone who can’t manage or direct the management of his or her benefits due to mental illness, substance abuse, or other conditions that limit the beneficiary’s capacity.

Do all Special Needs Trusts have the Medicaid payback provision?

Payback refers to paying back the state from money leftover in the trust upon the death of the trust beneficiary as a reimbursement for having received public benefits. 
– First Party Trusts, in which funding usually comes from a personal injury settlement or inheritance, require payback to the state. With a Pooled Trust, a portion will be retained by the non-profit organization that manages the trust. 
– Third Party Special Needs Trusts do not have a payback provision.

Where can I learn more about Representative Payee services?

The Social Security Administration – www.ssa.gov/payee/index.htm

Will CoG serve as Representative Payee?

CoG does serve as Representative Payee, but only if we are named in another legal role. If CoG is serving a client as Guardian, Agent under a POA, or Trustee, we can serve as Representative Payee. We can also contract with residential care providers to serve groups of individuals as Representative Payee. We no longer offer Representative Payee services as a stand-alone service for individuals.

I have a disabled family member. How can I set aside funds to care for him or her when I pass away?

Consider a Third Party Special Needs Trust.
A Third Party Special Needs Trust helps you provide financial security for a loved one with a disability—without jeopardizing important government benefits. In contrast, leaving money directly to loved ones can make it impossible for them to get benefits, including Medicaid.
A Third Party Special Needs Trust is funded by someone other than the beneficiary – gifts/inheritances from a parent, grandparent, other family member or friend. Gifts into the trust can be made throughout the beneficiary’s life. Friends and family can even name this type of Special Needs Trust in their will, thereby contributing additional funds at their death.

Who May Need A Representative Payee?

Any SSDI or SSI beneficiary who:
1. Is under the age of 18, OR
2. Found by a court to be legally incompetent, OR
3. Is unable to manage his or her benefits due to mental illness, substance abuse problems, chronic homelessness, and/or other conditions that limit his or her capacity to manage money responsibly.

What are the advantages of a Pooled Trust over a Stand-Alone Trust?

A Pooled Trust serves the same function as the other types of Special Needs Trusts in that it preserves the beneficiary’s eligibility for public benefits, but with several notable differences. A Pooled Trust is established by a non-profit organization, with individual beneficiaries creating sub-accounts within the larger trust. All funds are managed as a pool and invested as one account. However, the profits and losses, additions, and disbursements from each account are tracked separately. Besides public benefit protection, Pooled Trusts can offer additional significant value to beneficiaries, especially those with smaller trusts. By pooling contributions from many beneficiaries, the trust is able to reduce administrative expenses and make stronger investments. Most beneficiaries’ funds could never perform as well in the financial market as those funds will perform when strengthened by their addition to a pool. Additionally, the process of joining a Pooled Trust is relatively simple and typically more affordable than a Stand-Alone Trust. When you’re ready to join a Pooled Trust, you will sign a joinder agreement and pay a one-time non-refundable enrollment fee. The joinder agreement links you or your loved one to the master trust provisions.