The following definitions are provided as a resource for Co-Trustees, Beneficiaries and their representatives. Their purpose is to improve communication with Midwest Special Needs Trust. MSNT’s intent is to ensure the definitions are consistent with applicable statutes and the trust agreement. If any conflicts or discrepancies exist, they are unintentional and statutory or contractual language shall prevail.
The person with a disability for whom the trust is established, also referred to as the life beneficiary.
The person designated in the trust document responsible for working with MSNT, as Trustee. This person is responsible for making appropriate distribution requests that will increase the quality of the beneficiary’s life by supplementing public benefits or other available resources.
Disability Designation
MSNT accepts written verification of disability by Social Security for Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI) or Medicaid classification as Permanently and Totally Disabled (PTD) to verify disability.
Disbursement of trust funds for the sole benefit of the beneficiary that will not have a negative impact on public benefits.
The person whose resources fund the trust, also called settlor.
Exempt Asset
Any resource of the beneficiary that is not counted as an available resource by Social Security or state Medicaid authorities and will not disqualify the recipient’s public benefits.
Fiduciary Duties
A trustee or co-trustee has a broad range of responsibilities and obligations to the beneficiary as written in the trust agreement, state and federal law. A partial list of general fiduciary duties includes proper and prudent administration of the trust, recordkeeping, duty to inform, safekeeping of assets and loyalty to the interest of the beneficiary.
First Party Trust
An irrevocable trust created with the assets of the beneficiary. This trust must include a provision for Medicaid payback to qualify as an exempt asset by Medicaid and Social Security. It is also called a self-settled trust.
A trust that cannot be changed or terminated by the settlor.
Master Trust
The MSNT trust agreement to be used for both First and Third Party Trusts. The Master Trust is kept current to conform to applicable state and federal laws.
Medicaid Payback
A first party special needs trust established with assets of the person with a disability is excluded from counting as a disqualifying asset. The trust remainder at closing is subject to claim by any state Medicaid program for medical expenses paid for the beneficiary during their lifetime.
Program Operations Manual System (POMS)
The policies established by the Social Security Administration (SSA). MSNT applies SSA policy to protect the beneficiary’s public benefits.
Public Benefits
Assistance to an individual that may include Supplemental Security Income (SSI) from the Social Security Administration; Medicaid coverage as administered by the state agency responsible for the program; food stamps, housing allowances, etc.
Remainder Beneficiary
The person(s) or entity named by the donor in the trust agreement to receive remainder funds when the trust is closed and allowable expenses and fees are paid.
MSNT Charitable Trust
By state statute, MSNT is required to establish a Charitable Trust for the benefit of impoverished persons with disabilities. MSNT is permitted by state and federal statute, as stated in the terms and conditions of the Trust Agreement, to retain a portion of the trust remainder funds when the beneficiary is deceased and the trust closes. Contributions are also received to support these benefits provided by the MSNT Charitable Trust through Charitable Trust Grants.
A revocable trust allows the settlor or co-trustee, as authorized in the trust document, to withdraw or terminate the trust by written request.
Self-Settled Trust
See definition for First Party Trust.
See definition for donor.
Sole Benefit
A trust must be administered only for the benefit of the beneficiary based on criteria established by SSA and outlined in POMS. Other parties cannot benefit from distributions made by the trust as SSA may treat the trust as a disqualifying asset. This can result in reductions in the amount of the monthly cash benefit, ineligibility for public benefits and/or overpayment demands.
Sole Trustee
If no Co-Trustee is named in the Trust Agreement, MSNT will serve as Sole Trustee. The same applies if all co-trustees and successor co-trustees are unwilling, unable or unavailable to serve.
Special Needs Trust (SNT)
A category of trust, when properly structured and administered consistent with state and federal requirements, considered an exempt asset and will not affect eligibility for public benefits.
Third Party Trust
A trust established for a beneficiary with the assets of a third party. Third party donors can be parents, grandparents, legal guardians or the court. This type of trust does not require Medicaid payback at closing.
Trust Administration Fees
Charges to the trust account for trust administrative services provided by MSNT and its contract agents. Included are enrollment fees, asset value fees, transaction fees, closing fees, sole trustee fees, tax preparation fees and banking fees.
Trust Agreement
The legal document that sets forth the terms and conditions of the individual trust. The Trust Agreement is also called the Declaration of Trust.
The person or agency that holds trust assets and has legal authority and fiduciary responsibility for administering the trust. MSNT is trustee for all MSNT trusts.