ADDITIONAL INFORMATION:

Elderly mom will be receiving personal injury award. Expected to be $100K – $200K after lawyers & others are paid. Since mom is on Medicare & Medicaid, she’ll need a special needs trust to ensure that she isn’t disqualified from these government programs. Questions:

1) Since Medicare/Medicaid are means-driven programs, the recipient can’t have more than $2000 in assets. Does that mean the max she can withdraw from the trust is $2000?

2) Any limitations or restrictions on what she can buy? She resides in assisted living/nursing facility, so her rent, food, utilities, medical care, etc., are all covered by her benefits.

3) We don’t want anyone to know she has this money coming to her because we fear she could be exploited. Can we keep this under wraps? Naturally, the IRS would need to know about it – what are the tax ramifications?

4) Who could serve as mom’s trustee? What’s the typical pay rate to manage a special needs trust? Having a lawyer do it would be cost-prohibitive – at $200+ an hour, trust would be drained.

5) I’m mom’s POA & will be sole beneficiary of mom’s estate (what little “estate” there is). Do I need to be named in mom’s trust?

ATTORNEY ANSWER BY MARGARET L. CROSS:

In order for you mother to continue to receive her benefits, her award must be placed in a special needs trust. As this is her money, there must be a pay back provision in the trust so that at her death, the state will be reimbursed for money it advanced on behalf of your mother. Payback trusts are also referred to as d4a trusts. The trust may only pay for supplemental needs of your mother. You may serve as trustee of the trust.
Another option she has is to place the funds into a pooled trust, which is run by a charity. Once again, upon your mother’s death, the state will be repaid first before any distributions can be made to her beneficiaries.
Either way, you need to consult with an elder law attorney in your area.

Legal Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on since each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship. A lawyer experienced in the subject area and licensed to practice in the jurisdiction should be consulted for legal advice.

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The estate planning attorneys at the Beliveau Law Group provides legal services for estate and asset protection planning. The law firm has offices and attorneys in Naples, Florida; Waltham, Massachusetts; and Salem, New Hampshire.