Frequently Asked Questions

Why should one use a special needs trust rather than a traditional trust?

This form of supplemental funding does not preclude a person with disabilities from eligibility for state and federal entitlement programs such as Supplemental Security Income (SSI) and Medicaid.

Do state and federal laws or regulations guarantee that the assets in the Midwest Special Needs Trust will not preclude an individual from entitlement programs?

Yes. In Missouri, Chapter 402 of the Revised Statutes is the law which authorizes the Midwest Special Needs Trust to protect entitlements. The Midwest Special Needs Trust has also received favorable rulings from the Health Care Financing Administration and the Social Security Administration.

Are there other programs like this in the nation?

Yes. A few states have passed legislation to establish programs similar to the Midwest Special Needs Trust. However, most programs like the Midwest Special Needs Trust are operated by advocacy organizations or charitable foundations.

Is the Midwest Special Needs Trust a state governmental entity?

Yes and no. The Midwest Special Needs Trust is a 501(c)(3) non-profit agency established by legislation (402.199 RSMo). The Midwest Special Needs Trust does not receive a legislative appropriation. Thus, it maintains fiscal and operational independence from the state. The Midwest Special Needs Trust is administered by a Board of Trustees appointed by the Governor. Six of the nine members must have a family member with a disability.

What types of funds may be used to establish a special needs trust?

Cash and other liquid assets in the form of stocks or bonds, money market funds and treasury bills may be contributed to the trust. Also, receipts from insurance policies, annuities, or settlements may be used.

What is the minimum amount required to open a trust with the Midwest Special Needs Trust?

An inactive trust may be established with a minimum of $100. Active trusts may be established with a minimum of $500 plus an enrollment fee. Small or inactive trusts are sometimes established in anticipation of the receipt of settlement proceeds or inherited funds.

May more than one person contribute to the special needsTrust?

Yes. The trust may be established by up to two donors; others may make additional contributions to the trust.

May funds be added to the trust after the initial deposit?

Yes. Additional funds may be added at any time, although additions must be at least $100.

How are the monies invested?

The assets are conservatively invested with due regard to the purpose of the Midwest Special Needs Trust. Several investment options are offered for donors who wish to designate what investments are utilized.

If the donor’s financial status changes can the assets in the special needs trust be reclaimed?

If the trust has been established as a revocable trust by a donor other than the beneficiary or his/her spouse, all or part of the funds may be reclaimed during his/her lifetime. Trusts established with the beneficiary’s own resources are irrevocable and require Medicaid payback at the termination of the trust.

Is the income from the trust taxable?

Since the donor may reclaim all or part of the funds contributed to a revocable trust during his/her lifetime, the earnings are taxed to the Donor. Earnings of irrevocable trusts are taxed to the trust.

How do beneficiaries access funds in his or her trust?

The co-trustee designated by the donor has the authority to request funds on behalf of the beneficiary. Funds may be requested at any time and there is no limit on the number of distributions from the beneficiary’s trust account. However, funds will not be distributed for expenditures that jeopardize eligibility for public entitlements such as SSI and Medicaid.

May the beneficiary receive funds from the trust prior to the death of the donor?

Yes. Distributions are made to the beneficiary according to the Terms and Conditions of the Midwest Special Needs Trust and in consultation with the co-trustee for the beneficiary.

Will the donor and co-trustee receive regular statements on the financial performance of funds invested by the Midwest Special Needs Trust?

Yes. Statements are provided quarterly for each trust.

What are the administrative fees charged by Midwest Special Needs Trust for maintaining a special needs trust?

The fee is a percentage of the asset value of the account. Fees are taken quarterly. An enrollment fee is charged to establish an account. Persons meeting income criteria may receive a reduction in the enrollment fee.

Must a beneficiary reside in the State of Missouri to participate in the Midwest Special Needs Trust?

No. The beneficiary must be a resident of Missouri or one of the eight states adjacent to Missouri. These states are Nebraska, Kansas, Oklahoma, Arkansas, Tennessee, Kentucky, Illinois, and Iowa. The donor may reside anywhere.

Will a beneficiary’s participation in the Midwest Special Needs Trust be affected if his/her state of residence changes?

No. Trusts for beneficiaries who move to another state after a trust is established will not be affected by the move.

Does one need the services of an attorney to establish a special needs trust with the Midwest Special Needs Trust?

No. It is suggested, not required, that legal counsel be consulted prior to establishing a special needs trust.

Will a guardian for the beneficiary be necessary to ensure that his/her interests are protected?

No. The co-trustee designated by the donor represents the interests of the beneficiary. However, for other reasons it may be appropriate to have a guardian appointed. The need for a guardian has to be determined by each family on an individual basis.

Is it possible for a donor to make a tax deductible contribution to the Midwest Special Needs Trust?

Funds contributed to a trust for a beneficiary are not tax deductible. However, tax deductible contributions may be made to the Midwest Special Needs Trust , in general, or to the Charitable Trust, which provides financial support for low income persons with mental and/or physical disabilities. The Midwest Special Needs Trust also administers restricted accounts which provide assistance to persons meeting the specific criteria for each account. Contributions to the restricted accounts are tax deductible also. For more information call the Midwest Special Needs Trust office.

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