Beneficiaries 65 and Older

Beneficiaries 65 and Older

42 USC 1396p(d)(4)(C) stipulates that a Pooled Special Needs Trust (PSNT) can be CREATED by those who are 65 years of age and older.  In contrast, stand-alone Special Needs Trusts (or (d)(4)(A) trusts) cannot be created or funded by those 65 years of age and older.   Despite the fact that Pooled Trusts can be created by those who are 65 and older, many states still have transfer penalties for the amounts that are used to FUND the PSNT.  The transfer penalty primarily relates to Medicaid Long Term Care benefits but can affect some other public benefits such as SSI and waivered services. The issues surrounding the transfer penalties are complex and relate to the types of benefits received and the state from which these benefits are received.  Currently, eighteen states* and the District of Columbia do not have transfer penalties for those 65 and older.  In addition, many states are not enforcing the transfer penalties as they exist.

The decision to incur penalties is very specific to individual situations.  To determine if your state has transfer penalties, and if so, if those penalties will affect your individual situation, please consult with an attorney who specializes in elder law or special needs planning.  These two websites will provide referrals in your area.

National Academy of Elder Law Attorneys:

https://www.naela.org/Public/About_NAELA/Public_or_Consumer/Find_an_Elder_Lawyer/Find_an_Elder_Lawyer.aspx.

Special Needs Alliance:

https://www.specialneedsalliance.org/find-an-attorney/

 

*Alaska, Alabama, Arkansas, California, Delaware, Florida, Iowa, Indiana, Kentucky Massachusetts, Maryland, Montana, Ohio, Oklahoma, Rhode Island, Tennessee, Wisconsin, West Virginia and the District of Columbia.