What happens to the remainder when the Beneficiary passes away?

Thursday, October 10th, 2013

The Grantor can designate Primary and Contingent Successor Beneficiary(ies) in the Joinder Agreement.   The Grantor can designate one person, several people or a nonprofit organization like CCT to receive some or all of the remainder funds.  This information can be updated by the Grantor(s) at any time by completing the Amendment to the First-Party Pooled Special Needs Trust Joinder Agreement form.

For a Beneficiary who never received Medicaid benefits:
After administrative fees are deducted, the remaining funds are distributed to the Successor Beneficiary(ies) per the Joinder Agreement.

For a Beneficiary who received Medicaid benefits:
The First-Party Pooled Special Needs Trust is a Medicaid payback trust for Beneficiaries who receive Medicaid.  Upon the actual death of the Beneficiary, there are specific rules for what happens to the remainder.  These rules may vary state-to-state.

In general, the Medicaid office for each state in which the Beneficiary received Medicaid benefits is notified upon the death of the Beneficiary.  CCT requests information regarding the total amount of claims (funds that Medicaid has spent) that is owed to Medicaid on behalf of the Beneficiary.

The following scenarios help to explain CCT’s policy for the remainder of the First-Party Pooled Special Needs Trust upon the death of the Beneficiary.  CCT’s policy is followed to the extent that it complies with each state’s Medicaid Policy:

  1. When Medicaid is owed less than the amount remaining in the trust:
    If there is $50,000 remaining in the trust and Medicaid is owed $25,000, the Successor Beneficiary(ies) per the Joinder Agreement will receive the balance after Medicaid is reimbursed and administrative fees are deducted.
  2. When Medicaid is owed more than the amount remaining in the trust:
    If there is $50,000 remaining and Medicaid is owed $60,000, the remainder will be retained by CCT to support the mission of CCT, which includes the Charitable Fund Award.

IMPORTANT! Pre-need funeral and burial arrangements for the Beneficiary should be made and paid for in advance, as disbursements will not be approved after the Beneficiary has passed away.

It is also important that CCT is notified by the Grantor or Advocate at the time of death of the Beneficiary.  We are not notified by any other agency.  A copy of the death certificate is requested when it becomes available.

See the Joinder Agreement section on Distributions upon the death of the Beneficiary for further details.

What are the fees to establish the First-Party Pooled Special Needs Trust?

Thursday, October 10th, 2013

There is an initial one-time Enrollment Fee, and ongoing administrative fees.  (See First-Party Pooled Special Needs Trust Fee Schedule for current fees and additional details.)

Is the First-Party Pooled Special Needs Trust irrevocable?

Thursday, October 10th, 2013

By law, the First-Party Pooled Special Needs Trust is irrevocable.

How can the trust be funded?

Thursday, October 10th, 2013

The First-Party Pooled Special Needs Trust is funded with the Beneficiary’s own funds. This trust can be established with funds from a personal injury settlement, Social Security back payment, sale of property, inheritance left directly to the Beneficiary, or the Beneficiary’s own savings.

Checks can be made payable to the Trust Company of Virginia (TCVA) for deposit to the trust at any time.  Real estate or other non-cash assets are not accepted, since the funds must be pooled for investment purposes.

Please note: As of June 1, 2016, the Self-Funded Pooled Disability Trust  was renamed to First-Party Pooled Special Needs Trust.

What is the First-Party Pooled Special Needs Trust?

Thursday, October 10th, 2013

The federal Omnibus Budget Reconciliation Act of 1993, known as OBRA, is a federal law that defines who can have a special needs trust and still qualify for public benefits, and how the trust can be established.  OBRA allows people with special needs to place their own money into an irrevocable pooled special needs trust and still be eligible for SSI and Medicaid.  These trusts, sometimes also referred to as OBRA trusts, can be set up to prevent personal funds from being counted as the person’s assets, so the individual’s eligibility for SSI and Medicaid services is not jeopardized.  The pooled trust program must be set up and managed by a nonprofit organization such as CCT, and should be established within the same month that the funds are received to ensure that public benefits will not be interrupted.

CCT’s First-Party Pooled Special Needs Trust is established by a Grantor and self-funded by the individual with special needs. The Grantor can be the Beneficiary, the Beneficiary’s Guardian, parent, or grandparent, or the Court.

Please note: As of June 1, 2016, the Self-Funded Pooled Disability Trust was renamed to First-Party Pooled Special Needs Trust.