Comprehensive Planning. Lifelong Solutions.

Alternative to Special Needs Trusts

by Elizabeth Q. Boehmcke, Esq.

If you have a special needs child or if a loved one has an accident that leaves him or her disabled, you may well have been advised to consider the creation of a special needs trust for the benefit of the person with special needs. However, not every family can afford to create a special needs trust on its own or has the wherewithal to properly administer or monitor a special needs trust. Due to the many issues confronting the trustee of a special needs trust designed to protect the government benefits of the special needs individual, administering a special needs trust can be intimidating for many and a professional trustee may well be advised. Unfortunately, professional help can be quite costly. Nonetheless, there is an alternative that should be considered for such families: a pooled special needs trust.

A pooled special needs trust is created and administered by a non-profit group with the goal of preserving the disabled individual’s access to government benefits and improving the disabled individual’s quality of life. The non-profit group administers each individual’s subaccount pursuant to the “Joinder Agreement” which sets out the terms of the special needs trust. The subaccounts of all the disabled individuals are “pooled” together to maximize returns and minimize costs of administration; however, each individual subaccount is separate from the rest and is solely for the benefit of the named individual. Families are able to avoid the costs of creating their own individual special needs trusts and still reap the benefits of professional management by a trustee who specializes in special needs trusts.

A pooled special needs trust can be a first-party trust in which the assets of the disabled individual are held in trust or it can be a third-party trust in which the assets of someone else, such as a parent or grandparent, are held in trust. A pooled special needs trust can be a good vehicle for an inheritance in excess of the $14,000 that can currently be invested in an ABLE account or for a disabled individual with mental capacity who has no living parent, grandparent or guardian to create a standalone special needs trust (under current law, a standalone self-settled special needs trust that is not a pooled trust must be created by a parent, grandparent, guardian or a court). A pooled special needs trust can also be named as a beneficiary under a Will or Trust agreement if the Joinder Agreement is executed during the lifetime of the decedent. Finally, a pooled special needs trust should be considered for assets of any size where the family does not have the time, ability or manpower to understand and master the intricacies of public benefits laws in order to make sure that distributions from the trust do not jeopardize the disabled individual’s eligibility for government benefits.

In any given state, there may be multiple non-profit groups which administer pooled special needs trusts. It is important that anyone considering a pooled special needs trust investigate the possibilities as they will vary, among other things, in costs, administration practices and whether they provide trusts for both first party and third party trusts. In addition, some non-profit groups retain all or some of the remainder of the pooled special needs trust subaccounts after the death of the beneficiary while others do not. The attorneys at the Hook Law Center who have worked in this area for many years can assist you in finding an appropriate pooled special needs trust provider and in working with that provider to meet your specific needs.

Working with a knowledgeable attorney is important because, in addition to providing advice about how to choose an appropriate provider, we can also assist you with making sure that the portion of the Joinder Agreement which sets out certain goals and directions for the trustee in administering the trust along with the section which designates how the funds are to be distributed upon the death of the beneficiary are properly prepared. In addition, we can ensure that your estate planning documents and beneficiary designations reference the pooled special needs trust as appropriate to implement your estate plan. The attorneys at the Hook Law Center are sensitive to the issues confronting disabled individuals and their families, and we work hard to match each client with an appropriate and cost-effective solution to the issues confronting their unique situation.

Kit KatAsk Kit Kat – Dogs, Research, and Cancer

Hook Law Center: Kit Kat, what can you tell us about dogs and cancer research?

Kit Kat: Well, thankfully, our canine friends who have the misfortune of suffering from cancer are providing some useful information about cancer in humans. Here’s what’s happening. Veterinary medicine has advanced to the point where clinical trials are being conducted on dogs. Because the canine lifespan is significantly shorter than a person’s, useful information is being obtained about various treatment protocols. For example, Peter Way, an engineer in Colorado, had a beloved Labrador retriever, who developed melanoma in his mouth around the age of 10. He enrolled Prince (his Lab) in clinical trials at Colorado State University. Prince’s life was extended for about 8 months, but Mr. Way feels that both Prince, he, and other people will benefit from the experience. Mr. Way was extremely grateful to have that extra time with Prince, but it has also provided valuable information about the way to best way to administer oral treatments.

The canine genome was first mapped in 2005, so it is a relatively new phenomenon. Researchers now realize there are many similarities between canines and humans. Breed dogs, especially, have been instructive. ‘Breeds represent a closed population, offering tremendous opportunities for geneticists,’ says Elaine Ostrander, chief of cancer genetics and comparative genomics at the National Institutes of Health. At this juncture, scientists realize that dogs and humans share some tumor markers. They have also identified some types of cancer that are more prevalent in certain breeds. Golden retrievers have a tendency to contract lymphoma, while Bernese mountain dogs tend to contract connective tissue cancer. In fact, almost 25% of dogs will develop some type of cancer, according to current estimates. The effectiveness of certain treatments, therefore, can be evaluated more quickly by first trying them out with dogs, who have a shorter life expectancy. Stay tuned for more developments in this groundbreaking area of research. (http://well.blogs.nytimes.com/2015/10/21/learning-from-dogs-with-cancer/?hpw&rref=health&a…)

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  • October 30, 2015 – Hook Law Center Seminar Series continues with 5 Tools for Avoiding Impoverishment Due to LTC Expenses.  Register here for the seminar in Virginia Beach at 10am at the Crowne Plaza Hotel – Virginia Beach Towne Center, 4453 Bonney Road, Virginia Beach, VA  23462.
  • November 4, 2015 – Sandy Buhr our office administrator will be speaking at an ILS Meeting in New York on Management by Numbers.
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  • November 19, 2015 – Hook Law Center Seminar Series continues with Jessica Hayes speaking on “Estate Planning for Your Brady Bunch” in regards to planning for your second marriages. Register here for the seminar in Suffolk at 10am at the Hilton Garden Inn – Harbour View Suffolk, 5921 Harbour View Blvd, Suffolk, VA 23435.

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

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