Department of Defense Releases Regulation Pertaining to Survivor Benefit Plan (SBP) Annuity to Special Needs Trusts
On December 31, 2015, the Department of Defense (DOD) released a memorandum relating to the implementation of the Military Child Protection Act that was enacted by Congress in December of 2014. Pursuant to the Military Child Protection Act, which was incorporated in the National Defense Authorization Act for Fiscal Year 2015, military members and retirees may elect to have their pension annuity, the Survivor Benefit Plan (SBP), paid to a special needs trust for the benefit of a child satisfying the Social Security’s definition of “disabled.”
The awaited policy indicates that a member or retiree who elects SBP coverage for their dependent child may, at any time, irrevocably decide to substitute a self-settled special needs trust (SNT) created for the benefit of a disabled dependent child, during the lifetime of the member, via a written statement that designates future SBP payments to the SNT. The Secretary of Defense has not indicated that a specific form is necessary, but has indicated that Section X of DD Form 2656 will suffice. The DOD has indicated that the writing must also contain the trust’s name and tax identification number, and that the member or retiree’s statement must accompany a statement from an actively licensed attorney certifying that the trust satisfies the requirements of a self-settled special needs trust pursuant to federal and state law, or in lieu of such an attorneys certification, a certification from the Social Security Administration.
The DOD has also provided very specific provisions for assignment after the death of a member or retiree. Specifically, in the event a retiree died prior to making the assignment, or a member dies in line of duty while on Active Duty or during inactive duty training such that the SBP will fall to a dependent child, the DOD has indicated that the surviving parent, a grandparent, or a court appointed guardian may make such an election. That said, no provisions have been made for retirees who have not previously elected dependent child coverage.
In the event the SNT fails to qualify as a valid special needs trust, the SBP will revert to the dependent child, impacting that child’s public benefits such as Supplemental Security Income (SSI) and Medicaid. The DOD has indicated that as a result, those making the assignment need to ensure that the attorney selected to draft the SNT is experienced in this “specialized and complex area of law.”
Hook Law Center is the only firm in the Hampton Roads area with a member in the Special Needs Alliance, an invitation-only organization dedicated to legal issues faced by individuals with special needs. As a result, Hook Law Center has extensive experience relating to special needs trusts and public benefits. If you are interested in assigning the SBP to a SNT, please contact us to setup an appointment.
Hook Law Center: Kit Kat, what can you tell us about manatees being reclassified from ‘endangered’ to ‘threatened?’
Kit Kat: Well, on January 7, 2016, the US Fish and Wildlife Service announced that they would begin the process to reclassify manatees from ‘endangered’ to ‘threatened.’ The process takes about a year. They first have to announce their intention to reclassify a species. Then, there is a public comment period of 90 days. Finally, the US Fish and Wildlife Service announces a date that the change will be effective. In a way, this is a sign of success. Efforts for protection have succeeded to the point that manatees have rebounded in sufficient numbers to make the change. This is quite a step for the manatee—it has been on the Endangered Species list since 1967, the list’s starting date.
While ‘endangered’ means the species is at risk for extinction, ‘threatened’ means the species is still at risk, though to a lesser degree. However, the move to ‘threatened’ is not ever a permanent one. Should the status of the species decline, the process can be reversed, and it can be re-labeled ‘endangered.’ It is important to note that the Florida Fish and Wildlife Conservation Commission (FWC) is in favor of the reclassification. Also, the manatees have additional protections through the Marine Mammal Protection Act, which will not be affected by the reclassification. Slow boating speed zones of 5 mph to 7 mph of known areas which they inhabit will still be maintained. Boaters who speed through protected areas can be ticketed for a fine of $92.
So, stay tuned as the US Fish and Wildlife Service works through this process. It may be that the time has come to re-classify the manatee. If it occurs, we all should consider it a sign of success! (http://www.usatoday.com/story/news/nation-now/2016/01/08/feds-reclassify-manatees-endangered-threatened)
- January 20th, 2016 – Andrew H. Hook and Elizabeth Q. Boehmcke will be speaking on “Protecting Assets from Nursing Homes and Medicaid” at Crowne Plaza Hotel, 4453 Bonney Road, Virginia Beach, VA 23462.
- January 21st, 2016 – Andrew H. Hook and Elizabeth Q. Boehmcke will be speaking on “Protecting Assets from Nursing Homes and Medicaid” at Hilton Gardin Inn, 5921 Harbour View Blvd., Suffolk, VA 23435.
- January 22nd, 2016 – 126th Annual Meeting of the Virginia Bar Association in Williamsburg. Andrew H. Hook, Natalie Hale, and Stephanie Washington will be presenting a CLE on “Keeping Mom (or Dad) at Home Aging in Place With CBC, PACE, VA Benefits, and Reverse Mortgages.”
- February 15th, 2016 – Stephan J. Lipskis will be speaking on “Protecting the Money You Leave to Your Children from Their Divorce” at Crowne Plaza Hotel, 4453 Bonney Road, Virginia Beach, VA 23462.
- February 16th, 2016 – Shannon Laymon-Pecoraro is presenting on Veteran’s Aid and Attendance again with the Crossings at Independence at 10am. Crowne Plaza Hotel, 4453 Bonney Road, Virginia Beach, VA 23462.
- February 18th, 2016 – Stephan J. Lipskis will be speaking on “Protecting the Money You Leave to Your Children from Their Divorce” at Hilton Gardin Inn, 5921 Harbour View Blvd., Suffolk, VA 23435.
- February 20th, 2016 – Andrew H. Hook is traveling to Charlottesville for the 2016 UnProgram with VAELA. He will be giving a presentation on Advance Medicaid Planning Strategies, as well as addressing nuances of gifting by Power of Attorney.
- February 23rd, 2016 – Andrew H. Hook will be speaking on Long-Term Care Planning at The Crossings of Harbour View at 10AM.
- March 5th, 2016 – Andrew H. Hook will be speaking at the SNA Meeting in Hawaii on “Residential Planning for the Adult Disabled Child of an Elder or Decedent.”
- March 14th, 2016 – Elizabeth Q. Boehmcke will be speaking on “Protecting Your Children’s Inheritance” at Crowne Plaza Hotel, 4453 Bonney Road, Virginia Beach, VA 23462.
- March 15th, 2016 – Elizabeth Q. Boehmcke will be speaking on “Protecting Your Children’s Inheritance” at Hilton Gardin Inn, 5921 Harbour View Blvd., Suffolk, VA 23435.
- March 16th, 2016 – Andrew H. Hook will be speaking at the Hampton Roads Chapter Enrollment Society Meeting about Trust and Decedent’s Estate taxation issues.
- March 24th, 2016 – Andrew H. Hook will be speaking on Long-Term Care Planning at The Crossings of Harbour View at 10AM.
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