Re: Special Needs Trust for John Doe



Re: Special Needs Trust for John Doe

Dear Mr. and Mrs. [name]:

As you know, this Special Needs Trust (Trust) for John was created by court order on January 8, 2018. I have enclosed a copy of the Trust for your records. This Trust is an irrevocable trust created pursuant to the Department of Human Services Bridges Eligibility Manual Item 401 and the Social Security Act, 42 USC 1396p(d)(4)(A). Now that this Trust is funded, the proceeds are available to John only pursuant to the Trust terms. Our goal is to maintain John’s eligibility for governmental benefits. Please provide us with a copy of the check you receive from [name of office] and a statement from the account into which the money is deposited. We will disclose the funding of the Trust to Medicaid and the Social Security Administration. If they have any follow-up inquiries, we will let you know.

You should open an account titled as follows: “[Names], Trustees of the Irrevocable Special Needs Trust for the Benefit of John under an Agreement dated January 8, 2018.” Please use the beneficiary's Social Security number as the trust taxpayer identification number. You may invest the proceeds however you feel is appropriate. You have a fiduciary duty to invest “prudently” and to balance liquidity needs, long-term growth, current income, and any other factors that you believe reflect the purpose of the Trust. If you transfer money to other investments, each investment account should be titled as shown above, using the taxpayer identification number as noted above.

I have enclosed for your records a list of other ideas of expenses that may be paid by the Trustee from the Trust funds. This is not an all-inclusive list. If there is any question whether an expense is appropriate for the Trust funds, please let me know. As Trustees, you should consider each request in the context of John’s long-term well being. Let me know if you would like to meet in person or on a conference call to discuss other Trust administration issues.

By law, the Trust is for John’s sole benefit. Supplemental Security Income (SSI) and Medicaid prohibit any other person from receiving direct or indirect benefit from the Trust. As we have previously discussed, the purpose of the Trust is to allow John to maintain SSI and Medicaid eligibility. Distributions from the Trust should normally be made to the third-party supplier of goods or services and not directly to John. John’s personal bank account must remain below the $2,000 Medicaid limit. You should not commingle Trust assets with John’s Social Security checks, which should be held in a separate account.

Medicaid (Department of Human Services) and SSI may audit Trust expenditures, so it is essential to have thorough documentation. They may also thoroughly review the Trust, now that it is funded. Although we believe that this Trust fully complies with Medicaid and SSI requirements, Medicaid and SSI will review and audit the Trust and make a determination as to its exempt status.

The income for the trust will be reported on the beneficiary's individual tax returns. Do you plan to have your accountant file these returns?

Please let me know if you have other questions or would like to meet to discuss administration of the Trust in greater detail.

| | |Sincerely, |

| | | |

| | |[Firm name] |

| | |By /s/___________________________ |

| | |[Typed name of attorney (P_______)] |

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