Important Definitions

The Stephen Beck, Jr. Achieving a Better Life Experience Act (ABLE Act) was enacted on December 19, 2014, allowing an individual with a disability to open a tax-free savings account without jeopardizing his or her Medicaid and SSI eligibility.

The Advocate(s) is an important part of the Beneficiary’s team and works closely with CCT staff. The Advocate(s) is authorized to make disbursement requests by signing and submitting the Payment Request Form to CCT and may receive confidential financial information about the Beneficiary’s sub-account.

The Advocate(s) is usually named by the Grantor(s) on the CCT Joinder Agreement (the legal document to join the trust) and may be the Beneficiary, a Guardian, Conservator, Power of Attorney, family member, case worker, friend, and/or someone who is trusted and familiar with the needs of the Beneficiary.

However, CCT has sole discretion to decide what distributions are in the Beneficiary’s best interest and permitted under the terms of the trust, as well as when to share information.

For First-Party pooled special needs trust sub-accounts, the beneficiary does not need to have been determined to be disabled by the Social Security Administration.

 a child under the age of 18: The individual must have a medically determinable physical or mental impairment or combination of impairments that causes marked and severe functional limitations, and that can be expected to cause death or that has lasted or can be expected to last for a continuous period of not less than 12 months

For an adult 18 and older: The individual must be unable to engage in any substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment(s) which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

CCT does not require that the Beneficiary meet the SSA’s definition of disability. It is required that the Beneficiary have a well-documented disability.

An irrevocable trust refers to any trust which cannot be undone or changed.

The K-1 is an attachment to the income tax return filed by an estate or trust (Form 1041) that reports a participant’s share of the trust’s or estate’s income, credits, and deductions.

The Master Trust Agreement is an arrangement where a trust company acting as the Trustee manages individual special needs trusts under the umbrella of a “master” or large trust fund.

Medicaid payback applies only to the First-Party Pooled Special Needs Trust, the First-Party Pooled Special Needs Trust with Medicare Set-Aside, and the Military Survivor Benefit Plan First-Party Pooled Special Needs Trust. In order for a Beneficiary of a First-Party Pooled Special Needs Trust to qualify for means-tested public benefits, federal and state law require that upon the Beneficiary’s death, the state or states must be repaid from the trust the amount that the state or states’ Medicaid program has paid out on his or her behalf. It is important to note that the Third-Party Pooled Special Needs Trust does not require a Medicaid payback upon the Beneficiary’s death.

Following settlement of a worker’s compensation or liability lawsuit, federal law prohibits Medicare from paying for injury-related medical expenses or medications that an employer or health insurer is primarily responsible to pay. To ensure Medicare does not pay a medical expense or medication when it is not primarily responsible, federal regulations require that a portion of settlement funds be “set-aside” in an account to pay for future injury-related medical expenses and/or medications known as a Medicare Set-Aside (MSA).

The National Defense Authorization Act of 2015 allows military members and retirees to direct annuity payments from their Survivor Benefit Plans to a special needs trust for the benefit of a dependent child with special needs. CCT offers the Military Survivor Benefit Plan First-Party Pooled Special Needs Trust.

A First-Party PSNT is established with the Beneficiary’s own funds (self-funded) from a personal injury award, workers’ compensation claim, inheritance, savings, or Social Security back payment. For Beneficiaries receiving Medicaid, this type of trust is sometimes referred to as a Medicaid Payback trust. Remaining funds at the death of the Beneficiary are subject to reimbursement to state(s) for medical bills paid during the Beneficiary’s lifetime. This type of trust must be irrevocable by law.

An MSA First-Party PSNT is established with a portion of the settlement from a worker’s compensation or liability lawsuit with an MSA nested inside a First-Party PSNT. Federal law prohibits Medicare from paying for injury-related medical expenses or for medications that an employer or health insurer is primarily responsible to pay. To ensure Medicare does not pay a medical expense or for medication when it is not primarily responsible, federal regulations direct that a portion of settlement funds be “set aside” in an account, known as a Medicare Set-Aside, to pay for future injury-related medical expense and/or medications.

A Pooled Trust is a trust administered by a non-profit organization. Each sub-account is maintained separately while assets are “pooled” together to provide lower administrative fees and an opportunity for higher returns on investments. Access to confidential sub-account information is available on our website for authorized representatives.

The trust has been drafted in such a way that, provided the Trustee follows certain guidelines, the Beneficiary will continue to be eligible for Medicaid and Supplemental Security Income (SSI). Although the recipient of the trust does not have legal title to the trust funds, the recipient is what the law calls the “Beneficiary” of the trust. This means that the Department of Social Services for Medicaid recipients and the Social Security Administration for SSI recipients are notified of any deposits made to the trust and of distributions made from the trust. Generally, the following distributions would impact SSI benefits: food, mortgage (principal and interest), rent, real estate taxes, gas, electricity, water, sewer, and homeowner’s insurance, and cash payments to the Beneficiary. There are additional rules for both Medicaid and SSI that are complicated and rigorous, and vary state-to-state.

These are policies regarding what happens to the remaining trust funds upon the death of the Beneficiary. The policy will vary with each type of trust. For more information about CCT’s Remainder Policies, go to:

• First-Party Pooled Special Needs Trust
• Third-Party Pooled Special Needs Trust
• Settlement Preservation Pooled Trust
• Military Survivor Benefit Plan First-Party Pooled Special Needs Trust

See “First-Party Pooled Special Needs Trust.”

(SSDI/SSD) is a federal benefit program that is available to individuals with special needs who have sufficient work history prior to having special needs or are entitled to receive benefits by virtue of being a dependent or survivor of a special needs, retired or deceased insured worker.

The Grantor(s) designates Successor and Contingent Beneficiaries on the Joinder Agreement. This information determines what happens to the remaining funds upon the death of the Beneficiary.

• Third-Party PSNT – Successor and Contingent Beneficiaries can be changed by the Grantor(s) prior to funding.
• First-Party PSNT – Successor and Contingent Beneficiaries cannot be changed.

Naming CCT as a Successor Beneficiary and/or Contingent Beneficiary supports the organization’s mission to serve people with special needs and is greatly appreciated.

A trust is an arrangement by which a person makes a financial gift to a Trustee to be used for the benefit of the Beneficiary.