while numerous elder law and trust and estates practitioners are knowledgeable and well versed in the gains of utilizing a special needs trust (”snt”), also as the discords and differences between a self settled snt and a third party snt, one area of uproar and confusion and consternation for the practitioner is the day to day administration of the snt.

pursuant to the provisions of eptl 7-1. 12, an snt is to be utilized for the special and supplemental needs of a disabled person, and not their day-to-day living expenses suchlike food and protection. However, understanding and distinguishing the expenses which can be remunerated from the snt, and those which aren’t allowed, also as how payment can be made is oftentimes confusing. It is most essential that the attorney grasp which expenses are permitted to be remunerated from the snt for the special and supplemental needs of the beneficiary.

in administrating an snt it is imperative that the trustee keep away from undertaking any action that jeopardizes the beneficiary’s eligibility for medicaid and/or ssi.

for example, the beneficiary of the snt should not be given cash from the snt to make purchases for him or herself. Payments for goods and services should be made directly to the vender or supplier. A non-refundable, prepaid gift card is allowed as it allows the beneficiary the right to incur goods or services. In holding with this principle, a non-refundable airline ticket, or show or sporting event ticket would also be allowed. The trustee can buy a personal and particular service for the beneficiary, from that time of the service is not without apparent effort convertible to cash. For example, payment for any special therapy or surroundings and training is acceptable.

a recipient of ssi and/or medicaid can use funds in the snt to recompense for household emergencies suchlike the repair of a roof or payment of a telephone bill. It is advisable that the trustee buy any household goods or items in the name of the trust and not the beneficiary. This would keep away from the possibleness that the beneficiary would have agitate and control over the goods or items which could result in a prostration and loss of gains. However, for a recipient of ssi, only if a household good or item is purchased by the trustee and given to the beneficiary, thus, the beneficiary’s gains wouldn’t be peculiar and affected unless the beneficiary’s household goods exceed $2,000. 00. If a beneficiary receives an asset as the result of the trustee paying the bill for said asset, this could be deemed as income to the beneficiary which can disqualify him or her from gains in the months received.

the following is picturesque and illustrative of the types of purchases that can be made by the trustee of an snt for the beneficiary which would or would not gusto and effect the beneficiary’s eligibility for medicaid and/or ssi:

(a) the buy of a home for the beneficiary of a snt wouldn’t gusto and effect his or her gains if the title to the house is held in the name of the trust. The house wouldn’t be deemed a resource of the beneficiary, and would not impact his or her eligibility for gains. The beneficiary is treated as if he or she is residing in his or her home, and not deemed to be receiving protection, which would impact eligibility for gains.

any payment by the trustee of the expenses for the real property, suchlike taxes, rent, heat, gas, water, electricity, mortgage, rubbish remotion and sewer would gusto and effect the beneficiary’s eligibility for gains as they would be considered income to the beneficiary. Home improvements or renovations aren’t considered income;

(b) the trustee’s buy of cable tv or satellite tv services, telephone service, internet service, newspaper and other news related magazines and periodicals wouldn’t impact the beneficiary’s eligibility for gains. The trustees buy of computers, computer software and any upgrades for the computer are also permissible expenses;

(c) the buy of an automobile for the beneficiary of the snt wouldn’t impact his or her eligibility for gains.

additionally, the expenses for the automobile insurance, maintenance and fuel are allowed. The buy of fuel for the automobile can be problematic dependent upon how payment of the fuel is made. It is commended that the beneficiary be given a gas company credit card that cannot be utilized for other purchases which will directly bill the trust for the fuel purchases;

(d) the trustees are able to make boundless and inexhaustible expenses for the travel and entertainment expenses of the beneficiary. If the beneficiary is unable to travel alone, distributions from the snt for a travel companion are allowed. The payment of a beneficiary’s hotel expenses are problematic as the argument could be made that they’re protection expenses. However, the argument can be countered if the beneficiary maintains a home;

(e) household furnishings and furniture can be purchased by the trust;

(f) pre-remunerated funeral and burial arrangements can be owned by the trust for the benefit of the beneficiary. The arrangements should not be owned by the beneficiary, as they could impact ssi gains;

(g) legal and accounting fees can be remunerated by the trustee without impacting the beneficiary’s eligibility for gains;

(h) the trustee can buy costume for the beneficiary without effecting the beneficiary’s eligibility for gains;

(i) the trustee, without any conditions and restrictions, can buy and make payment of lasting medical equipment, therapy, medication, alternative treatments, tuition, books, tutoring, care management and taxes of the beneficiary.

in conclusion, the above stated must provide you with a more suitable understanding of what the trustee of a snt will be allowed and not be permitted to do without effecting the beneficiary’s eligibility for medicaid and/or ssi as portion of the day-to-day administrator of a snt. It is clearly a challenging and roundabout and elaborated task.