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Closing a Trust

Only Midwest Special Needs Trust, as Trustee, can terminate or amended the Master Trust Agreement. Trust sub-accounts within each trust, may be closed for the following reasons:

 

Type of Trust Sub-Account Reason for Closing
First Party Trust Sub-Accounts
  • Sub-account is irrevocable and cannot be closed due to request
  • Sub-account balance falls below the minimum balance requirement (low Balance)
  • Death of the Beneficiary
  • MSNT, as Trustee, determines the trust sub-account is no longer practicable
Third Party Irrevocable Trust Sub-Accounts
  • Sub-account is irrevocable and cannot be closed due to request
  • Sub-account balance falls below the minimum balance requirement (Low Balance)
  • Death of the Beneficiary
  • Beneficiary ceases to have a disability
  • MSNT, as Trustee, determines the trust sub-account is no longer practicable
Third Party Revocable Trust Sub-Accounts
  • Donor request
  • If authorized, Co-Trustee request
  • Sub-account balance falls below the minimum balance requirement (Low Balance)
  • Death of the Beneficiary
  • Beneficiary ceases to have a disability
  • MSNT, as Trustee, determines the trust sub-account is no longer practicable

Closing procedures take 30 to 45 days to complete and may take longer in some instances. A final quarterly sub-account statement will be mailed in the quarter following final distributions. The most common reasons for closing a trust sub-account are death of the beneficiary and low balance. 

Low Balance

The minimum balance requirement is $500.

Trust sub-account balance falls below $500, MSNT will:
  • Notify the Donor, Co-Trustee, Beneficiary or responsible party
  • Additional funds may be added at that time to stop closing procedures
  • If no additional funds are deposited, MSNT will initiate closing procedures
For First Party Trust Sub-Accounts:
  • Notification to all state Medicaid Program(s) the Beneficiary has received benefits
  • Payment of applicable fees, tax preparation fees, and taxes
  • Final distribution to state Medicaid Program(s)
  • If the state Medicaid program(s) do not make a claim, the final distribution will be issued to the Beneficiary
For Third Party Trust Sub-Accounts (both Revocable and Irrevocable)
  • Payment of applicable fees, tax preparation fees, and taxes
  • Final distributions in accordance with the trust agreement documents

Beneficiary’s Death

The Co-Trustee is responsible for notifying MSNT of the death of the Beneficiary as soon as possible. MSNT requires a copy of the Beneficiary’s death certificate to initiate closing procedures. MSNT cannot approve request for funds after the death of the Beneficiary.

First Party Trust Sub-Accounts

      • Notification to all state Medicaid Program(s) the Beneficiary has received benefits
      • Payment of applicable fees, tax preparation fees, and taxes
      • Payment of the Charitable Contribution (25% of the remainder balance in the trust sub-account)
      • Final distribution to state Medicaid Program(s)
      • If the state Medicaid program(s) do not make a claim, the final distribution(s) will be issued to named Remainder Beneficiaries

Third Party Trust Sub-Accounts

      • Payment of applicable fees, tax preparation fees, and taxes
      • Payment the Charitable Contribution
      • Final distribution(s) will be issued to named Remainder Beneficiaries

 

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