Whatever your questions, we have answers. Start right here.
Key Terms
Beneficiary: The person who the trust is set up to help. With a special needs trust, it is someone with a disability.
Manager: The person who works with the beneficiary, family and friends. Staff of The Arc of Northern Virginia manage the trusts. We also work with professionals such as lawyers, financial planners, and doctors.
Trustee: The person in control of the beneficiary's money. KeyBank is the trustee for our trust program.
Grantor: The person or people who create the trust. It can be family members or friends. In some cases, it might be the person with a disability.
Primary Representative: The person or people chosen to work with the beneficiary to help use the trust money. The primary representative fills out and submits spending requests.
What is a Special Needs Trust?
A special needs trust is a reliable way to set aside money for the future of someone with a disability.
It’s like other trusts in many ways. Money may be put in a trust for an eligible beneficiary. Money in a special needs trust is not controlled directly by the person with a disability. As a result, money in a special needs trust doesn't affect government benefits as long as it is being spent appropriately. If a special needs trust is managed well, it's a great way to save for the future and protect government benefits.
Who Qualifies to be a Beneficiary?
To qualify as a beneficiary for a special needs trust, one must have documented proof of a physical, mental and/or developmental disability as defined by the Social Security Act.
Of the many who qualify, two groups benefit the most:
People who rely on means tested government benefits
and/or
People who require assistance to manage their money
What are the types of Special Needs Trusts?
Special Needs Trusts can be "Pooled" or "Stand - Alone"
Pooled |
Stand - Alone |
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Special Needs Trusts can be "Self - Funded" or "Family - Funded"
Self - Funded |
Family - Funded |
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Established by: Individual w/ disabilities, parent, grandparent, legal guardian, court-ordered, or agent under Power of Attorney |
Established by: Parents, Relatives, Friends |
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Why/When: ONLY WHEN NECESSARY. Best when the person with disabilities needs to apply/protect benefits and/or cannot independently manage money |
Why/When: Second to passing; may fund the trust prior to death with seed money (minimum of $500) |
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How to Fund: Unexpected inheritance, lump-sum pay back from SSA, jury-decision, settlement, income, adult child support, military survivor benefit (SBP) program, alimony, lottery |
How to Fund: Inheritance, life insurance policy, transfer from another trust, contributions, real property, etc. |
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What Happens After Passing: Medicaid payback then identified remainder beneficiaries listed on the Joinder Agreement, OR, contribution to The Foundation of The Arc of Northern Virginia |
What Happens After Passing: The grantor (who establishes the trust) decides who will inherit the remaining funds |
The Arc of Northern Virginia is a Pooled Special Needs Trust program. We offer both self - funded and family - funded trusts.
Key Bank is the trustee and the Arc of Northern Virginia is the trust manager to help with day-to-day tasks on behalf of the beneficiary.
Both the Trustee and trust manager are overseen by The Foundation Board of the Arc of Northern Virginia.
When Should I Establish a Special Needs Trust?
Considerations for self- funded trusts
In many cases, funds in the person's name must be divested before the end of the calendar month in which they were received to avoid them being considered as an asset.
Considerations for family- funded trusts
Life is unpredictable. Having a sub-account established and referenced in estate planning documents is the best way to ensure that no matter what, your loved one's future is secure
In either case, we recommend that a trust is established as soon as possible
How do I use a Special Needs Trust?
A Special Needs Trust does not operate like a typical bank account.
Reviews of requests are required to ensure proper management of assets and alignment with the Master Trust, Joinder Agreement and Trust Plan on file
• Processing of requests requires up to ten business days upon submitting a request
- Five business days for The Arc of NOVA to review documentation
- Five business days for KeyBank to process the payment to the identified payee
*these 10 business days do not include the time in which it takes to mail payment via USPS
How do I Establish a Special Needs Trust?
At the Arc of Northern Virginia, we try to make the process of establishing your sub - account as easy as possible.
- Learn and Research - come to our webinars and explore our website. consult an attorney or CPA if desired.
- Attend a Trust Talk Tuesday - After completing this webinar, you will be provided with a link to register for a consultation
- Attend a Free Consultation - Where we hope most of your case specific questions are answered
- Attend an Establishment Appointment - Work with a senior member of our team to draft your joinder agreement and supporting documents
- Establish your Sub - Account - Sub- account will be established within 10 business days of receipt of payment and notarized documents
Let's Talk About the Future
Take the first step toward creating a Special Needs Trust for a loved one with a disability.
Join us for Trust Talk Tuesday to start the establishment process!