Military Survivor Benefit Plan First-Party PSNT

A Military Survivor Benefit Plan First-Party PSNT is a trust established with annuity payments from the Survivor Benefit Plan for the benefit of a dependent child who has a disability.

Joining Documentation

What is a Military Survivor Benefit

Plan First-Party PSNT?

In this insightful video, discover the remarkable benefits of our Military Survivor Benefit Plan First-Party PSNT. Join our New Client Services Manager, Kaylan Hood, as she delves into the details and advantages of this valuable resource.

When an individual with a disability receives funds,

it is important to give thoughtful consideration to the following:

  • Does the individual with a disability receive Supplemental Security Income (SSI) and or Medicaid benefits now or is there a plan to apply in the future?

    If funds are received directly, the individual’s SSI and Medicaid eligibility could be jeopardized due to the $2,000 countable resource limit for SSI and some Medicaid programs. Funds placed into a First-Party PSNT will not be counted as a resource to the Beneficiary. 

  • Due to the nature of the individual’s disability, could the individual benefit from a trust administrator to help manage funds?

    CCT's First-Party PSNT provides fiscal oversight to ensure that the funds are used for the sole benefit of the Beneficiary, provides professional management and investment of funds, and can be used to enrich the quality of life for the Beneficiary.



How Funds in the Sub-Account Can Be Used

The funds can be used to pay for expenses that will enhance the quality of life for the Beneficiary. For more information, see our Disbursement Manual.

Disbursement Information Manual

  • Disbursement requests are reviewed and approved based on the following criteria:

    • Is the request for the benefit of the Beneficiary? 
    • Are these adequate funds in the trust to cover the request?
    • Is the request prudent? 
    • What other income or resources are avaliable to the Beneficiary? 
    • Was supporting documentation provided?

  • Examples include, but are not limited to:

    • Medical and Dental Services not covered by insurance
    • Assistive Technology
    • Eyeglasses, Hearing Aids, and Prosthetic Devices
    • Pre-paid Burial Expenses
    • Computer and Internet Services
    • Education Expenses
    • Caregiver Expenses
    • Home Modifications
    • Clothing and Furniture

Additional Resources

Objectives of the Trust

The Objectives of the Trust form provides information about the beneficiary's needs for disbursements from the sub-account.

First-Party Remainder Policy

The Remainder Policy explains what happens to funds remaining in the sub-account upon the death of the beneficiary.

CCT Trust IPS

The Investment Policy Statement (IPS) is carefully crafted and reviewed regularly by the CCT Board of Director’s Finance and Investment Committee.

Important Definitions

  • Pooled Trust

    A pooled trust refers to a unique trust structure when there is one Master Trust Agreement but multiple beneficiaries. The beneficiaries each have their own sub-account that is set up by completing the  Joinder Agreement, the legal document to join.  The funds in the sub-accounts are pooled for investment purposes. The Beneficiary and their advocate(s) have access to financial information through the CCT secure online portal, mobile app, and by mail upon request. 

  • Sub-Account

    A sub-account refers to the account holding funds for an individual Beneficiary.  Funds deposited into this sub-account are used solely for that Beneficiary.  The sub-account is governed by the terms of the CCT First-Party Pooled Special Needs Trust Master Trust Agreement and the completed Joinder Agreement, which states what will happen to any remaining funds if the Beneficiary passes away. 

  • Grantor

    Due to restrictions in federal law and regulations, a First-Party Pooled Special Needs Trust sub-account can only be set up by the Beneficiary themselves or their agent under a power of attorney with sufficient authority; their parent(s), grandparent(s), or legal guardian(s); or a court. 



  • Beneficiary

    The Beneficiary is a person with a disability for whom the sub-account was created and funded.  During the Beneficiary’s lifetime, the funds in the sub-account must be used for their sole benefit. 



  • Disability

    According to federal law, a Beneficiary must be considered disabled to be eligible to set up a first-party pooled special needs trust sub-account at Commonwealth Community Trust.

     

    An adult Beneficiary is considered disabled and is eligible for a first-party sub-account if they meet three criteria: (1) they have a medically determinable physical or mental impairment, (2) due to the impairment, the Beneficiary is unable to engage in any substantial gainful activity, and (3) the impairment has lasted or is expected to last at least twelve months or result in death.  42 U.S.C. § 1382c(a)(3)(A),(B)

     

    A minor Beneficiary is considered to be disabled and is eligible for a first-party sub-account if they meet three criteria: (1) they have a medically determinable physical or mental impairment, (2) the impairment results in marked and severe functional limitations, and (3) the impairment has lasted or is expected to last at least twelve months or result in death. 42 U.S.C. § 1382c(a)(3)(C)

     

    A determination by the Social Security Administration that a Beneficiary is disabled (an award of Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI)) means that the Beneficiary is automatically eligible for a first-party sub-account.  Otherwise, the Beneficiary and/or their family or attorney can confirm that the Beneficiary has a disability by providing written supporting documentation from a medical provider or other professional with the Joinder Agreement.

  • Joinder Agreement

    The Joinder Agreement, our legal document to join the pooled trust, establishes the sub-account for the Beneficiary and gives essential information about the Beneficiary and the sub-account. CCT has a sample Joinder Agreement that is helpful when completing a new Joinder Agreement. 

  • Advocate

    An Advocate is an important part of the Beneficiary’s team and works closely with CCT.  An Advocate 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 Beneficiary may be their own Advocate and CCT strongly recommends having multiple Advocates if that is possible. Advocates are usually named by the Grantor(s) on the CCT Joinder Agreement, 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.  Over time, Advocates can be added or removed by CCT in consultation with the other Advocate(s). 

     

    However, while CCT looks to the Advocate(s) for information regarding the Beneficiary, 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. 

Final Steps to Take

Submit certified Special Needs Trust paperwork to the following Defense Finance and Accounting Service address:

Defense Finance and Accounting Service

U.S. Military Retired Pay

8899 E. 56th Street

Indianapolis, IN 46249-1200

  • After the Joinder Agreement is signed by CCT, then CCT will also send you a completed Special Needs Trust Certification form to submit with the Election Statement.

    To be eligible to elect the special needs trust as the beneficiary under the Survivor Benefit Plan, the retiree must have previously elected “Spouse and Child” or “Child Only” coverage for the disabled child under the Survivor Benefit Plan. If the service member is alive, and if he or she has previously elected “Spouse and Child” or “Child Only” coverage under the Survivor Benefit Plan, he or she may make the designation to direct payment on the behalf of a beneficiary to a special needs trust at any time.


    After the death of a member or retiree, if the service member or retiree had elected “Spouse and Child” or “Child Only” coverage under the Survivor Benefit Plan, any surviving parent, grandparent, or court-appointed legal guardian may make the designation to have payments made to a special needs trust on the behalf of a beneficiary.


    Required Documentation by the Defense Finance and Accounting Service (DFAS):


    1. A written statement of the decision to have the annuity paid to the special needs trust that includes the name of the dependent child, and the name and Tax Identification Number* for the trust (provided by your Service or this standard form from CCT)



    2. Attorney’s Special Needs Trust Certification

CCT's Special Needs Trust Election Statement

Special Relief:

In the event that DFAS is not able to make the change in Survivor Benefit Plan election (for example, if the retiree did not originally elect “Spouse and Child” or “Child Only” coverage), a military member or family of deceased can apply to the Service Board for Correction of Military Records for relief by submitting a DD Form 149 to the Service Board. Along with DD Form 149, you will need the same information necessary to change the beneficiary of an existing election.


For those with a child already receiving a Survivor Benefit Plan annuity, these steps should allow the child to regain eligibility for SSI/Medicaid. For those who chose not to designate their child as a Survivor Benefit Plan beneficiary previously, there may be a nominal fee for the reinstatement once obtained.


*The Tax Identification Number for CCT is found on page 1 of the First-Party Pooled Special Needs Trust Joinder Agreement.

Have questions?

If you have any questions about the process, please don’t hesitate to call our office at 804-740-6930 or email us at contact@trustCCT.org. Our staff is available to answer your questions Monday through Friday from 9:00 am to 5:00 pm ET.


Mailing Address:

Commonwealth Community Trust
P.O. Box 29408
Richmond, VA 23242-0408