Important Definitions

ABLE Act – 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.

Accounting – The Primary Advocate for the Beneficiary of the trust is entitled to an accounting from the Trustee.  CCT has selected The Trust Company of Virginia (TCVA), a federal chartered financial institution with trust powers, located in Virginia, to manage and invest the funds and provide quarterly financial statements via mail or internet.

Advocate  Named by the Grantor, the Advocate is responsible for making requests to CCT for disbursements that are for the sole benefit of the Beneficiary.  The Advocate will have access to financial statements and can be the Beneficiary, a Guardian, Conservator, Power of Attorney, family member and/or someone who is familiar with the needs of the Beneficiary.  CCT requests that an additional Advocate be named as backup along with contact information.

  • Primary Advocate – Named by the Grantor, the Primary Advocate is responsible for making requests for disbursements that are for the benefit of the Beneficiary. The Primary Advocate will have access to financial statements and can be the Beneficiary, a Guardian, Conservator, Power of Attorney, family member, case worker, friend and/or someone who is familiar with the needs of the Beneficiary. The Primary Advocate will receive financial account information, tax documents, and other official correspondence from CCT.
  • Secondary Advocate – It is important to have a Secondary Advocate as backup to the Primary Advocate. The Secondary Advocate can receive financial account information upon request, and will be contacted by CCT if the Primary Advocate cannot be reached or to obtain any additional information, at any time.

Beneficiary – The Beneficiary of the trust is the person for whose benefit the trust was created; however, the Beneficiary does not own the funds in the trust.  The Trustee (see Trustee) holds the legal title of the trust funds for the benefit of the Beneficiary and acts at the direction of the Trust Administrator (see Trust Administrator). Although the Beneficiary, or someone acting on behalf of the Beneficiary (e.g., designated Advocate), has the right to request disbursements to vendors, the Trust Administrator is not required to approve the request.  At the same time, however, the Trust Administrator has a responsibility to ensure that the trust funds are available for supplemental needs that will improve, to the extent possible, the quality of life of the Beneficiary.

Disability for Purposes of SSI and Medicaid – CCT serves clients who have a disability based on the Social Security Administration’s (SSA) definition of disability.

  • For a child under the age of 18, the SSA defines having a disability as follows:
    a)       The child must have a physical or mental condition(s) that very seriously limits his or her activities; and
    b)       The condition(s) must have lasted, or be expected to last, at least 1 year or result in death.  For more information, please visit the Social Security website.
  • For an adult 18 and older, “disability” under Social Security is based on an inability to work.  To be considered disabled under SSA rules, the following criteria must be met:
    a)      The adult cannot do work that was done before;
    b)      Social Security decides that the individual cannot adjust to other work because of his or her medical condition(s); and
    c)       The disability has lasted or is expected to last for at least one year or to result in death.  For more information, please visit the Social Security website.

Duty to Be Prudent – The Trustee has the duty to be prudent.  It is the Fiduciary’s responsibility to safeguard the trust property for the Beneficiary.

Fiduciary – A Fiduciary acts on behalf of the Beneficiary of a trust fund and is held to the highest standards of loyalty and competence in the administration of the trust (see Trustee).  CCT has selected The Trust Company of Virginia (TCVA) to serve in the role of Trustee, which includes investment and management of funds.

First-Party Pooled Special Needs Trust – Self-funded by the individual with special needs as a result of a personal injury award, Social Security back payment, direct inheritance, or other reason. For a Beneficiary who receives Medicaid, this is a Medicaid payback trust. Upon the death of the Beneficiary, Medical Assistance Services will be repaid for its expenditures during the Beneficiary’s lifetime. This type of trust must be irrevocable by law.

Grantor – The person who establishes the special needs trust and is generally the person whose assets fund the trust.

Irrevocable Trust – Refers to any trust which cannot be undone or changed.

  • The First-Party Pooled Special Needs Trust is irrevocable by law.
  • The Military Survivor Benefit Plan Special Needs Trust is irrevocable by law. This type of trust is a first-party pooled special needs trust.
  • The Third-Party Pooled Special Needs Trust can be established as revocable or irrevocable where no one reserved the power to revoke the trust.  The trust becomes irrevocable upon the death of the Grantor or at the time the trust is funded. The trust document conforms to the requirements of 42 U.S.C. 1396p and/or state law.

Joinder Agreement – The legal document that allows the Beneficiary to have a sub-account with a Pooled Special Needs Trust. The Joinder Agreement for CCT needs to be completed and notarized.

Letter of Intent –

  • The Family and Beneficiary Information form provides Third-Party Pooled Special Needs Trust Grantor(s) the opportunity to elaborate on his/her vision and goals for the trust and to share with the Trustee information about the Beneficiary which can include special interests, likes and dislikes.
  • The Objectives for the Trust form provides the opportunity for First-Party Pooled Special Needs Trust participants to share their vision for their trust.

Master Trust Agreement – 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 –  A health care program run by state governments available to those who have special needs and meet financial eligibility requirements (rather than recipient age requirements).  Maintaining eligibility for Medicaid is a central focus of special needs trust administration.

Medicaid Payback – This applies only to the First-Party Pooled Special Needs Trust and the Military Survivor Benefit Plan Pooled Special Needs Trust.  In order for a Beneficiary of a First-Party Pooled Special Needs Trust to have funds in a trust, federal and state law requires that upon the Beneficiary’s death, the state or states will have a claim against the trust for any money that the state or states’ Medicaid program has paid out on his or her behalf that is not retained by a nonprofit organization.  It is important to note that the Third-Party Pooled Special Needs Trust does not require a Medicaid payback upon the Beneficiary’s death.

Medicare – A health care program operated and funded by the federal government for senior citizens, people 65 years of age or older; and people with specific disabilities.

Medicare Set-Aside (MSA): 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).

Military Survivor Benefit Plan – An insurance plan that will pay a monthly payment, or “annuity,” to a deceased military member or retiree’s dependent child with special needs.

Military Survivor Benefit Plan Pooled Special Needs Trust – Military members and retirees can direct annuity payments from their Survivor Benefit Plan to a pooled special needs trust for the benefit of a dependent child with special needs. This type of trust does not jeopardize the Beneficiary’s eligibility for SSI or Medicaid.

MSA – See “Medicare Set-Aside”

National Defense Authorization Act of 2015 – Legislation passed which 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 Pooled Special Needs Trust.

Pooled Special Needs Trust – A special needs trust that is administered by a nonprofit organization, and whose funds are pooled for investment purposes and to keep administrative fees low. Financial records for each sub-account are maintained by the Trustee (The Trust Company of Virginia). Comprehensive financial statements for each sub-account are mailed quarterly to the Advocate or may be accessed on The Trust Company of Virginia’s website.

Pro Rata Share – If the trust makes distributions that incidentally benefit other persons, then those persons must contribute a pro rata share of the expense. For example, if the Trustee purchases a van to share with others at a group home, then other riders should pay a fee to use it.

Protection of Benefits – 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.

Remainder – The amount remaining in the trust sub-account upon the actual death of the Beneficiary. See “Remainder Policy” for more information.

Remainder Policy – 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:

Revocable Trust – Refers to any trust which is, by its own terms, revocable and/or amendable, meaning able to be undone or changed.  The Third-Party Pooled Special Needs Trust can be established as revocable until it is funded.  The First-Party Pooled Special Needs Trust is irrevocable by law.

Self-Funded Pooled Disability Trust – see First-Party Pooled Special Needs Trust.

Social Security Disability Insurance (SSDI/SSD) – Sometimes referred to as SSDI or SSD, this Federal benefit program 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.

Sole Benefit – Any distributions from the trust must be for the sole benefit of the Beneficiary, the person for whom the trust is intended to benefit. If a trust provides benefits to other persons, then it will not be considered a special needs trust, it will become a countable resource, and the Beneficiary may lose SSI and/or Medicaid benefits.

Successor and Contingent Beneficiaries – The Grantor(s) designate Successor and Contingent Beneficiary(ies) on the Joinder Agreement. This information can be updated by the Grantor at any time. The Successor Beneficiary(ies) receives the percentage the Grantor stated on the Joinder Agreement.  Sometimes a Successor Beneficiary dies before the Beneficiary. If a Contingent Beneficiary is named, that share will be distributed to that Contingent Beneficiary(ies). If no Contingent Beneficiary is named, the share of the Successor Beneficiary who died before the Beneficiary will be divided amongst the other Successor Beneficiary(ies). An individual or charity can be named as a Successor Beneficiary and/or Contingent Beneficiary. Naming CCT as a Successor Beneficiary and/or Contingent Beneficiary, supports the organization’s mission to serve people with disabilities.

Supplemental Security Income (SSI) – This Federal benefit program is available to low-income individuals who are disabled, blind, or elderly and have limited income and few assets.  SSI eligibility rules (no more than $2,000 in assets) form the basis for most other government program rules and are the central focus for special needs trust planning and administration.

Third-Party Special Needs Trust – Established for a Beneficiary with special needs is funded by a third party (the Grantor) who is typically a family member or friend, and can be coordinated with an estate plan, life insurance policy, or other qualified plan. This type of trust is sometimes referred to as a Supplemental Needs Trust, Purely Discretionary Trust or a family-funded special needs trust. Third-party trusts are irrevocable once funded, but remain revocable until funded or until the death of the person making the will or trust.

Trust – 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.

Trust Administrator – A non-profit organization, such as CCT, that administers pooled special needs trusts. The Trust Administrator directs the distributions and administrative issues of the trust.

Trustee – A bank or trust company (The Trust Company of Virginia), hired by the CCT Board of Directors, that has the responsibility to manage and invest the trust funds. The Beneficiary does not own the funds in the trust. The Trustee holds the legal title of the trust funds for the benefit of the Beneficiary. The Trustee acts at the direction of the Trust Administrator.

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