If the person with a disability receives an inheritance or court judgment or settlement, you can petition the court to place the funds in a court-ordered Special Needs Trust so that the individual may continue to receive their public benefits. The Court Ordered Special Needs Trust is an irrevocable trust that the court maintains jurisdiction over. After the court establishes the trust by court order, you will need to get a Tax Identification Number (or EIN) for the Trust, set up Trust bank accounts, file an inventory and appraisal with the court and do accountings with the court. The trust will remain in effect until the trust estate is depleted or when the beneficiary passes away. Once the person with a disability dies, any remaining funds must be paid to the state for any medical assistance provided after the trust’s establishment.
D4 Special Needs Trusts
A D4 Special Needs Trust refers to special type of special needs trust when the individual with disabilities has assets in their name and wishes to transfer those funds into a special needs trust. The D4 reference is short for 42 U.S.C. Section 1396, subsection D4. These trusts are also referred to as first party special needs trust, self settled special needs trusts, and Medicaid Exemption Trusts. In California since 2007, the California Rules of Court mandate that first party special needs trusts be done through the Probate Court. Cal. Rule of Court 7.903.
A good explanation on these trusts is explained in the Social Security POMS, the link is below.
<< Read More >>
<< Read More >>