Tuesday, December 23, 2014

Is There a Difference between a Qualified Income Trust and a Special Needs Trust?

Santa, Is There a Difference Between a Qualified Income Trust and a Special Needs Trust?

Yes, Virginia, there is a difference and you need to consult a qualified elder law attorney to know which document you need based on your personal circumstances.

A 'Qualified Income Trust' is required if you are applying for Medicaid assistance and your gross monthly income exceeds the state limit (for 2015 the monthly income limit for a single person in Florida will be $2,199.00). The trust is a legal document that allows the amount of your excess income to be placed in a separate account. Your patient responsibility of paying your gross income (less $105.00) to the facility, each month, is still in effect.  Even though you may meet all other requirements if you don't set up a qualified income trust Virginia, your Medicaid application will be denied.

 On the other hand Virginia, a special needs trust may be right for you if your total countable assets exceed the state's resource limit for SSI (supplemental security income) or Medicaid.  If you are under age 65 a special needs trust can be created for you by your parents, grandparents, guardian or a Court.  You can place your excess assets into the trust and they will be exempt.  The assets can only be used for your sole benefit to improve your quality life and quality and the quality of your medical care.  Some examples of permissible distributions include:
•    housing expenses
•    assistive devices and technology
•    home health services
•    transportation
•    education (including tutoring)
•    alternative and/or experimental medical treatment
•    vacations

Yes,Virginia, there is a Santa Claus. If your medical needs cannot be addressed by purchasing private health insurance through the Affordable Care Act Marketplace, then you should have your situation evaluated by Stephanie L. Schneider, Board Certified Elder Law Attorney to understand your options and make an informed decision that will bring you peace of mind.

                                   We Want To Be Your Trusted Planning Advisor Through Life.

Friday, December 19, 2014

The New ABLE Act: Is It Right for You and Your Family?

                        The New ABLE Act: Is It Right for You and Your Family?

Monday December 15, 2014, Congress passed the ABLE Act.   The goal of the ABLE (Achieving Better Life Experience) Act is to provide funding for qualified disability expenses for individuals while allowing them to receive SSI and/or Medicaid assistance, employment and money from other sources. The ABLE Act provides an account to hold assets up to $100,000.00 as an alternative to a special needs trust or a pooled trust.

      In order to qualify an ABLE account the following requirements must be met:
     The disability must have occurred prior to age 26
1.    Only the first $100,000.00 is protected
2.    Contributions to the ABLE account must be in cash and are limited to $14,000.00 per year
3.    The participant receiving the benefit of the ABLE account must be a resident of the state where the account is established
4.    Only one (1) account is permitted per participant
5.    The ABLE account must be set up and managed by the state or agency

     Some of the benefits of establishing an ABLE account include:
•    the account is exempt from taxation
•    the person with the disability may direct how the funds are invested a maximum of 2 times a year.
•    the money can be used for: 
  • education
  • housing
  • transportation
  • employment training support
  • assistive technology
  • administrative
  • legal expenses
  • funeral arrangements
 •    it may be beneficial when family members would like to make a gift (while alive) and the amount would not justify the expense of establishing and administering a special needs trust or pooled trust.

Be aware that upon the demise of the participant, the ABLE Act requires any monies remaining are first subject to repayment of the Medicaid lien (just like in a special needs trust and pooled trust).

We are waiting for the President to sign the bill into law. After it is signed by the President, we must wait to see what Florida's government does:
  • will it establish an ABLE trust?
  • what agency will be assigned to administer the ABLE accounts and prepare financial accountings for each account? 
Stay tuned for further updates in 2015.  If you would like to learn more about special needs planning please call my office to schedule a consultation.  We invite you to print out the gift certificate on my website and mention it when scheduling your appointment.

                                              Let Us Be Your Trusted Planning Advisor Through Life