10/10/2016
CREATIVE WAYS TO MAKE SNT
DISTRIBUTIONS – THINGS TO
CONSIDER BEFORE YOU SAY “NO”
Nancy Sosa
Sr. Vice President/Manager
Cadence Bank
Central Texas Office
1
Beneficiaries of SNTs - Statistics
Injured Parties:
•
Limited education
•
At or below Federal Poverty Level
•
Drive older cars without latest safety features; disrepair; older, worn-out tires
•
Jobs with physical exposure to dangerous situations; work very early or very late shifts
•
More likely to be tenants, rather than homeowners
Reverend Ed Gomez:
•
A Framework for Understanding Poverty, by Dr. Ruby Payne
•
Survival skills for daily life for individuals living in poverty
•
Importance of relationships and how relationships shape lives
2
Reimbursement Policies - explained
Social Security Administration/SSI
• Previous policy: reimbursements to parents or third parties counted as
income to beneficiary; must be paid directly to vendor of goods and
services, or directly to credit card account
• POMS SI 01120.201I.1.f: reimbursements made from trust to third party
for funds expended for benefit of beneficiary are not income – including
reimbursements to third party credit card
Texas Medicaid programs
• Consider that reimbursements deposited into a checking account may
convert into a countable resource depending on applicable deeming
and resource rules
3
1
10/10/2016
Distribution challenge: Reimbursements
Credit card/other reimbursement options:
•
Beneficiary or family may not have funds to purchase items up front for later
reimbursement; credit card may be best option/best practice
•
Majority of SNT beneficiaries on SSI are not able to qualify for a credit card
•
Amount of security deposit for secured credit card could be counted as part of
monthly resources
•
Secured credit card accounts can be relatively small ($300) and usually cannot
accept payment for more than current balance owed
•
Case managers and relatives may be able to help with purchases
•
Travel agents may pre-pay for hotels, flights, entrance fees, travel meals, etc.
•
Credit card charges and charges to be reimbursed to a third party must meet
POMS criteria, including being for the beneficiary’s sole benefit
•
Credit card charges and charges to be reimbursed to a third party require prior
trustee approval
•
Review purchases for appropriate items, sizes, and amounts
•
Require original receipts for reimbursement
4
Reimbursements - continued
Creative options:
• Are monthly ongoing household expenses eligible to be paid from
the SNT?
• Is beneficiary willing/able to accept SSI benefit reduction?
• Is SNT able to pay a pro-rated amount, at minimum?
• Review benefits for most beneficial effect
• Set budgeted amounts for minor beneficiaries’ birthdays,
Christmas/Holiday celebrations, back-to-school clothes and
supplies
• Set budgeted amount for recreational travel
• Set budgeted amount for toys
• Consider rewarding good attendance and academic success
5
SCENARIOS –
Home remodeling: Mary’s home
Consider how the expense financially impacts Mary’s trust –
•
Mary’s trust has $1.5 million in assets
•
Mary’s monthly expenses average $4,000
•
Once the remodeling is complete, the monthly expenses will
increase by approximately $900
•
Mary’s trust receives $6,000 monthly in annuity payments that
will pay for Mary’s lifetime or 30 years certain
6
2
10/10/2016
Home remodeling - continued
Consider how long Mary will likely live in the home –
•
Mary has lived in the town over 50 years
•
Mary’s two sisters and their extended families have lived in the
town all their lives
•
Mary’s two sisters provide her daily care, as well as emotional
support and socialization
•
Mary’s two adult daughters live in different cities
•
Both daughters are single with no children
•
Mary intends to live in the home the rest of her life
Trustee made the decision to recommend approval of the remodeling
project
7
Burial suit for beneficiary
Burial suit (clothes) would be considered a “funeral expense”
and therefore ineligible to be paid prior to reimbursement to
the state(s); however, trustee could consider:
• What is the amount of the remaining balance in the trust?
• What type and how many services was the beneficiary receiving?
• How many years was the beneficiary receiving public benefits?
• How likely is there to be enough funds to reimburse the state?
• What is the charge for the suit?
• Will the funeral home waive the fee?
8
Grandmother’s credit card: Peter
Consider alternative means of reimbursement where credit card
unavailable:
•
5 year-old with severe burns, lives at home with mother and older
brother
•
Grandmother allowed use of her credit card and paid expenses during
the pending personal injury lawsuit
•
Grandmother cancelled the credit card while Peter was on a medical trip
without notifying Peter’s mom
•
Mom borrowed money until her return and asked for cash
reimbursement
•
Rather than jeopardize Peter’s government benefits, trustee paid
household expenses directly to vendor for the same amount as the
amount to be reimbursed
Such payments may be considered ISM, thereby reducing, but not
eliminating, Peter’s SSI benefit
9
3
10/10/2016
Disconnected utility services: David
Trustee may encounter difficult decisions when parent or guardian
does not fulfill their own obligations; consider beneficiary’s needs and
sole benefit rule:
• David is a minor receiving Medicaid and requires around-the clock
nursing care
• Lives at home with mom (paid caregiver) and five other siblings
• SNT has been paying 1/6th of some of utility bills for David’s portion
• Mother intentionally does not pay her portion of the utility bills
• Utilities are disconnected; David requires electricity to operate his DMEs
• Trustee pays directly all charges to re-activate the utility services
Trustee notifies David’s mother that her wages will be reduced to reimburse
the trust for amounts paid for her; report to Court as necessary
10
Creative thinking: Jimmy
Be knowledgeable about beneficiary’s current medical state and
needs; make contact with therapists and doctors as necessary:
• Jimmy’s birth injury caused him to be legally blind and hard of hearing
• Mother requested the addition of a special needs suite for Jimmy
• Jimmy enjoys watching Disney movies, cartoons, and educational
programs in his “suite”
• Mother requested a large, high definition TV for Jimmy to be able to see
• Trustee later found Jimmy’s TV in family room
• Mother requested a very expensive Bose surround sound system for his
room as a medical necessity
Trustee had Jimmy’s TV mounted to the wall in his room to ensure maximum
use and benefit for Jimmy. Trustee consulted with Jimmy’s audiologist; found
that a $200 Bluetooth Bose headset was the best solution for Jimmy’s
hearing problem, saving several thousands of dollars for the trust
11
A loving abuelita: Robert
Understand family dynamics in working to ensure the beneficiaries’ benefit and
best interests are protected:
•
Robert was 3 months old when he was traumatically brain injured while at a
hospital; parents abandoned him at the hospital
•
Court approved and created a special needs trust for Robert and separate courtcreated trusts for Robert’s minor siblings
•
Robert’s grandmother requested funds from the trust for summer clothes and
shoes for Robert and his siblings
•
Trustee later learned (from grandmother) that Robert’s mother had returned the
clothes and shoes to the store and used the cash refund for herself
•
Mother called again to request winter clothes and shoes for the children;
grandmother confirmed the children desperately needed clothes
Trustee met Robert’s mother, grandmother, and the children at the store; trustee
assisted the family in selecting and ensuring the clothing items were a good fit for the
children. Before leaving the store, trustee removed the tags from the items so mother
would not be able to return for cash.
12
4
10/10/2016
Quinceañeras – how much?
Familiarize yourself with cultural traditions and take them into
consideration among other factors as appropriate:
• Traditional celebration in many Hispanic cultures
• Culturally marks the transition of a girl into a young woman
• Has evolved into an elaborate, often extravagant and very expensive
celebration
• Many metropolitan cities host “Quinceañera Expos”; new TLC series “Sweet
15: Quinceañera”
• Vendors for venue, flowers, cakes, decorations, invitations,
musicians/entertainment, catering, photographers, etc.
• Dresses/gowns, jewelry, shoes, tiaras, makeup, etc.
• Costs can range from $5,000 - $25,000 or more
13
Quinceañeras – continued
• Trustee should consider:
•
Public benefits beneficiary is receiving
•
Current assets in special needs trust
•
Current annuities and future lump sums of annuities
•
Current expenses of special needs trust
•
Length of time funds need to last
•
Year-to-date distributions
•
Large ticket items anticipated in the future (car, car insurance, college, etc.)
•
Age of the beneficiary at the time of the request (beneficiary may only be
12 or 13 years old)
• Trustee could potentially offer up to several thousand dollars based on these
considerations
Note: parents who disagree with the trustee’s determination may want to seek
court relief; trustee’s past experiences have demonstrated that the court may be
less generous in its offer (previous judges have approved only $1000).
14
Conclusion
A special needs trustee should consider each beneficiary, each
family, each request:
 Thoughtfully
 Respectfully
 Seriously
 CREATIVELY
“PEOPLE WILL FORGET WHAT YOU SAID, PEOPLE WILL
FORGET WHAT YOU DID, BUT PEOPLE WILL NEVER
FORGET HOW YOU MADE THEM FEEL.”
MAYA ANGELOU
15
5
10/10/2016
Thank You.
For more information, please contact:
Nancy Sosa
SVP/Manager, Central Texas Office
Cadence Bank, N.A.
[email protected]
512.872.2780
16
6