Trust Overview

Families and individuals can establish two different types of Special Needs Trusts (SNT): Family-Funded (Third-Party) SNT and Self-Funded (First-Party ) SNT. Family-Funded SNTs help families provide for the financial future of their loved one without affecting eligibility for government benefits, such as SSI, SSDI, and Medicaid. Self-Funded SNTs allow people with disabilities to fund their own trust, often with funds received through settlement, lump-sum payback, unexpected inheritance, and more.

We partner with Key Private Bank, who acts as the Trustee and is responsible for all fiduciary tasks such as asset management, asset allocation, tax and account reporting, and check writing and disbursing. Working together with Key Private Bank, our trusts can now hold real estate, accept most in-kind transfers, and offer eight (8) unique portfolios for investments. For more information about real estate in a SNT, please click here.

 

Family-Funded Trust vs. Self-Funded Trust Comparison

FAMILY-FUNDED SELF-FUNDED
One-Time Enrollment Fee $1050.00 $1050.00
Enrollment Fee for a Second Trust for the Same Beneficiary or a Sibling/Immediate Family Member with a Disability $  525.00 $  525.00
Annual Management Fees (Trust Manager) 0.75% 0.75%
Annual Management Fees (Trustee) 0.90% 0.90%
Time of Funding At Grantor’s Discretion Usually At or Soon After Enrollment
 Funding Required  No Minimum or Maximum No Minimum or Maximum
 Frequency of Use  Unlimited  Unlimited
Remainder to the State (Medicaid) No Yes, Reimbursement for Medicaid Cost as Required by Law*

OR Left to The Foundation of The Arc’s Self-Funded Account

OR Medicaid First then Remainder Beneficiaries

Remainder to The Arc or Foundation of The Arc Not Mandatory, but Appreciated Not Mandatory, but Appreciated
 Expected Duration of the SNT  Full Actuarial Life  Sometimes Less Than Full Actuarial Life; Perhaps as Brief as a Few Years
Investments Choice Between Trustee’s Various Asset Allocation Portfolio Options. If over $250,000, Trust Funds May Be Individually Customized Choice Between Trustee’s Various Asset Allocation Portfolio Options. If over $250,000, Trust Funds May Be Individually Customized
Tax Preparation Yes, Trustee Mails K-1 Form to the Person Who Receives the Statements, Who Then Submits to IRS Yes, Trustee Mails a Grantor Tax Information Letter to the Person Who Receives the Statements, Who Then Submits to IRS

 

There are three (3) main parties involved in a SNT:

(1) The Beneficiary is the person with the disability who benefits from the SNT. We serve people with all disabilities.

(2) The Grantor is the person (or persons) establishing and funding the SNT, as well as retains control over what happens to funds left in the Beneficiary’s account when the Beneficiary passes away. The Grantor determines the Remainderman when writing the Joinder Agreement. Once the SNT is funded and funds are requested for disbursements, our staff shall consider whether the requested expense is allowable by Medicaid, Supplemental Security Income (SSI), or other public benefits (if the Beneficiary is receiving benefits); whether the requested expense is in line with the Beneficiary’s Trust Plan; whether the Beneficiary can afford the expense; and whether the expense serves the sole benefit of the Beneficiary. The SNT must act in accordance with the terms of the Joinder Agreement, Trust Plan, the state trust laws (Virginia, Maryland or Washington DC), its common law fiduciary duty to the Beneficiary, and the pertinent state and federal statutes and regulations governing the inception, administration, and termination of SNTs.

(3) Once the SNT is funded, our staff work with the Primary Representatives who are named in the Joinder Agreement by the Grantor(s). The Primary Representatives are trusted individuals chosen by the Grantors who will communicate the Beneficiary’s needs and wants to our staff. They are authorized to request funds from the SNT for the benefit of the Beneficiary and have the authority to exchange financial information about the Beneficiary’s SNT. The Primary Representatives request and submit disbursements, therefore assisting our staff in determining the most appropriate use of the Beneficiary’s SNT account.

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For more information about our special needs trust program, please review our Power Point Presentation.

You can also contact Tia Marsili, Director of Trusts, to schedule a free one-hour consultation, a meeting to establish a SNT, or a presentation for your organization. Director of Trusts can be reached at TMarsili@thearcofnova.org or 703-208-1119 Ext 115.

If you are ready to establish a SNT, please prepare the necessary documents and information prior to your appointment. For a list of the items to bring to your SNT appointment, please click here.