 Green Mountain supports services to empower neighbors with disabilities to be home in the community. Major support also includes Washington County Mental Health, where hope and support come together. A la Israel. All people know limits. Welcome to this edition of Abledon Arena, the one and only program that focuses on the needs, concerns and achievements of the differently abled in Vermont and beyond. I'm Lauren Seiler. I'm Alan Seiler. Before we get to our important guest today, we would like to thank our sponsors Washington County Mental Health, Green Mountain Support Services, and A la Israel. We would like to welcome Jim Caffrey of Caffrey Law and the special needs alliance to our show. Thank you. On this topic, we will be discussing special needs trust and special needs law and the differences between all of that. Welcome to Abledon Arena. Thanks to both of you. You're welcome. What are the misses and goals of your law practice and what kind of law do you practice? So we generally describe what we do in our office as special needs planning, which is primarily a state and future planning for Vermont families that are affected by disabilities in some way. Okay. Now, so that runs the gamut. It can go, what classifies in terms of your law practice, what classifies, what a disability is, the types of disabilities, because you know there's a whole lot of fraud out there that people, you know, as far as disabilities are concerned. So in our office, we're primarily concerned, or primarily we're working on planning. And so we don't do social security claims. So that would address the issues of fraud, possible fraud that you've mentioned. But primarily what we're doing is a state planning for families and families in which there is a person with a disability. And as you know, there's a wide spectrum of needs and abilities. And so our planning is tailored to the needs of that individual family. Typically that includes all of the traditional estate planning, wills and revocable trusts, health care directives for family members, and then also a special needs trust. Okay. How do you set up a special needs trust? How do you set it up, per se? So there are a number of different ways that that can be done. Primarily in our office we're working with parents who are going to do their own estate planning and then also they're going to create a special needs trust for a family member with a disability. And so typically it's a parent, sometimes it is a grandparent, and in certain instances it is the person with a disability him or herself who sets up their own special needs trust. Now we understand that you're part of the special needs alliance, so you're a member of that. I am a member of that. So what exactly is that group? So the special needs alliance or the SNA is a national association of lawyers that do work similar to what I do in the special needs planning. And so it's an invitation only group of lawyers, and basically they're looking for folks who've had a certain amount of experience in this area. We don't have members in all 50 states. We're at about 46 states. We're missing the Dakotas. But that's helpful in case we're working with a Vermont family who moves to California. I will have a colleague that can assist a family in a move. Is it, are people, I wouldn't say scared, but are people like squeamish with like dealing with end of life stuff like estates? Oh absolutely. So how do you walk them through the steps? What is our ways that you, I wouldn't call them baby steps, but yeah, in a sense. They can be. So yeah, we have a pretty typical process where somebody's going to call our office. And again, the majority of our work is mom and dad say, okay, we're getting older. We need to do some planning for our son or daughter who has a disability of some kind. And then we have a meeting. We get some information from them. We have a meeting and we talk about their concerns, the opportunities, what kind of benefits does your son or daughter receive? Where do they live? Where do they want to live? And so we try to coach them through thinking about all of the hard decisions that they need to make. And then. Hard decisions, explain that? Well just, if they're going to establish a special needs trust, who's going to be for their son or daughter? Who's going to be the trustee of that trust? How much money are you going to put in? How much money are they going to put into it? How much do they get a month? Who's going to regulate it? Who's going to be the trustee? Are you going to choose a family member to be a trustee? Are you going to choose a bank or a non-profit to be the trustee? Non-profit. So in a sense you say bank or non-profit. So if there are no relatives available, you mean like a group on non-profit? No, there are some non-profits, there are none in Vermont, at least none that I'm aware of that are based in Vermont, but there are some non-profit organizations whose sole function is to administer special needs trusts and I've worked with some that are based in different states but the beneficiary lives in Vermont. And then in some instances the person with a disability might be under a guardianship and then part of the planning with the parents is helping them figure out who's the best choice to be a future guardian. But obviously that's the definition of guardianship. What's that? What is the definition of guardianship within all this? So under Vermont law if a person has an intellectual impairment that compromises their ability to make medical decisions or financial decisions on their own, the probate court will sometimes appoint a guardian to serve and then that person has the legal authority to make some of those decisions on behalf of another person. And in some cases under Vermont law there are essentially six powers that can be given. Meaning like a power of attorney type of thing. Well it's similar to that but it's in that the court is giving the legal authority to some other person to make a decision, make a medical decision or make a legal decision on behalf of the person under guardianship. With the power of attorney that is the principle, the person they choose is who they want to be their agent but it's similar in the sense that you're giving authority to somebody else to help you out. So the power of attorney simply means okay I'm not going to be around example and someone else takes over. So a power of attorney is only something that's effective while the principle and that's the person who's giving the power, that's only effective while they are alive. So once the person, once the principle passes away the power of attorney is no longer effective. So then does the state take over? So if the person is passed away and they have assets then and if they have a will then it's not the state of Vermont, it's not the government that takes over but through the probate court process an executor or a personal administrator they're appointed to and take care of affairs after the person is passed away. Okay now question in terms of we mentioned a whole lot of stuff okay there's a whole lot to say. So third-party trust or trusts okay what's the difference because let's say example person's on Social Security or SSI gives us different types of social security. Big difference yeah difference okay How does the first, second and third-party trust work? Well for reasons I cannot tell you there's no second-party trust but there are first-party trust and third-party trust okay go ahead and the third-party trust is a trust that is established by somebody other than the beneficiary with the disability. Typically it's a mom and dad or a grandparent or a brother or somebody they will be the ones that establish the trust and other people's money funds the trust. It's never the money of the person with the disability if it's going to be a third-party trust. I was going to say in the flip side of that is a first-party trust is something that a person with the disability can establish for him or herself and if they are not able to do so a guardian can establish a first-party trust and that kind of trust special needs they're both special needs trust but the first-party trust is allowed to receive money that belonged to the person with the disability before it went into the trust. Can Social Security or those government programs take away benefits? What do you mean can they take away benefits? In other words can will benefits be affected? If you have a proper special needs trust yes no okay so and that's the point of doing this I'm just asking so people can no yeah so that's the point of doing these special needs trust is that uh you know there's there are restrictions involved and the way they you know they have the trustee has certain rules that they have to follow in order and the trust document has to have certain language and assuming you do all of that correctly benefits like SSI and Medicaid will not be negatively impacted. What way will they be impacted if the trust is not set up correctly? So if the trust is not set up correctly and again there are different rules for a first-party trust and a third-party trust but you're correct that if the trust is not set up correctly then a person who's receiving SSI or Medicaid they could lose eligibility for those benefits if it's not done correctly they could also lose benefits if the trust is set up properly but it's not administered properly so the trust has all the right words in it but the trustee maybe makes the wrong kind of distribution they dole out cash instead of paying directly paying for an electric bill or something so there's two ways that it can be goofed up one is in the writing of the document and have you seen goof ups where you have where you've had to fix or help fix yes yeah um so uh what um see is this is this type of law hard to practice and because we understand that you have a sum with a challenge I do so how does how does your law practice factor into the factor you have a family member who was um well I had a family member with uh disability before I became a special needs planning lawyer yeah I've been a lawyer for 25 years and I did different stuff for 12 of them and then as a result of thinking about these things when my son is now 19 but uh I changed my law practice to do special needs and your first part of your question is is it hard it's it it's complicated it's also uh well there's a couple things you you need a general understanding of all of the traditional aspects of a state planning law uh and then you need to have an understanding of what the different public benefit programs are uh you know ssdi is not the same as ssi and medicaid is not the same as medicare no uh and within the medicaid program there are lots of different things that are uh covered uh within each state and in medicaid and from one state you cross the connecticut river in new hampshire and medicaid over there is going to be very different than it is here right so yeah it's it's it's pretty complicated and and you know now um do you guys deal with or does your law practice deal with um okay let's say example uh someone passes away okay and there's money in the trust but there's no money for funeral expenses or how does that does your law practice step in or does the state or can the state help with issues like that so that's going to depend on a lot of things uh if there is a that's a bad question i hope not no uh if if there is a third party special needs trust yeah uh and a person passed away and they did not have a prepaid funeral plan then typically the trustee of the trust so after the beneficiary has died the trustee can pay for uh funeral uh services um there's a difference with the first party trust because under the first party trust you're not supposed to pay for the funeral expenses so typically if a person only has a first party trust and no third party trust the trustee can buy the prepaid funeral plan before the person passes away but they're not supposed to pay for it after the person has died that's one of the confusing medicaid rules that that folks need uh there are more expenses i know this is a question we haven't discussed but uh there are more expenses when a person dies than they're alive or or more problematic things that go wrong if it's not set up if everything is not set up correctly i mean there are problems that can happen no matter what um and typically though when a person is passed away and you're talking about we you're talking about when a parent is passed away or the beneficiary uh who has a disability is passed away the parent okay so typically what happens when a parent is passed away is that is the time that the special needs trust is going to be funded so if a parent uh has an estate plan and they have two children uh and they say one half to child a and one half to the special needs trust of child b so you go through the administration process and sometimes in the probate court sometimes uh the parents will have a trust um so i guess the answer to the question you know if everything is set up properly there won't be any problems uh it takes a lot of steps but there shouldn't be any problems that said regardless of how well things are set up if people aren't inclined to get along or behave well there can always be problems in any way what do you mean oh if somebody might challenge a distribution that is made or challenge um one of the provisions that a parent has included in their documents um so there's any number of things that can go wrong but part of what we do is try to help folks put together a good plan so that there's less likelihood that things will go wrong okay um what have is there anything we haven't discussed that you think is extremely important with your um office and well i i think the the most important thing is that uh that people do planning uh and the number that i keep hearing is uh that and this is whether or not you have a child with the challenge or not is about 50 percent of the um of the population has no estate planning at all do you why is why do you why because most folks don't want to spend time or money think planning for their own deaths uh because it's you know i do it every day but it's not a lot of fun to think about yeah um but what kind of law were you actually um doing before before i was primarily an environmental permit attorney real estate attorney okay nothing to do with this uh it was it was as a result of my son's autism diagnosis that i change what i do so um but there are um there are matters in our office where parents have passed away uh and they didn't do any planning and that's not good uh so if the if they have a child who is on ssi and the parent passed away and they left them a pile of money whether it's big or small if it's more than two thousand dollars that caused a problem for their ssi and their medicaid and then the and then their ssi stuff gets shut off correct it does um you know and then there are certain you know there are things that they can do uh there are planning you know they might be able to establish a first party trust um but if somebody is receiving uh services through an organization like washington county said they're one of your sponsors and they've worked with my son um that is paid for by medicaid and so if a parent didn't do any planning and they've passed away and they've left again a small pile or a big pile of money to their child does it matter is there a big difference between the amounts well generally speaking that uh the countable uh resource threshold none of you have heard this term you know you can't have more than two thousand dollars in your bank account at the end of the month i think that's changed no uh it well for certain programs it's changed but by and large it is still a two thousand dollar asset test for if you're on ssi or if you are on certain medicaid programs not all medicaid programs um but with certain medicaid programs there's still this two thousand dollar asset test um so and if you go look say 2001 what happens do you got a problem well if you got 2001 you're gonna spend the dollar and and yeah so the size of the problem and your planning choices are largely going to depend on the amount of money that um is left directly to an individual um and i've heard of an able account um yes we have okay can you explain how that would work so an able account is uh similar to um i don't know if you've heard of a 529 college savings plan not exactly but so a 529 plan is something that parents will do if they think their son or daughter is going to go to college someday they can put 15 up to 15 thousand dollars in this account yeah and sit in it they save that money for the child to go to college an able account is something that a parent can establish for their child with a disability or a grandparent or whomever can establish it and you can put up to 15 thousand dollars a year into that account a year a year okay into that account uh and that money in the able account uh does not count against the it's exempt it doesn't count against the two thousand dollar dollar you know the dollar's really yeah okay a couple things though with that that the person with the disability has to have been legally disabled prior to the age of 26 in order to use an able account okay so if you were in an autumn if you weren't disabled previously and you're in an automobile accident at age 30 you can't use an able account so okay uh but again the the majority of our work is trying to help families plan so you don't have a problem of a parent passing away and all of a sudden causing an eligibility problem um now um you said that two thousand dollars but see i'm i'm a little confused maybe you're gonna uncomfuse us i hope so you said that two thousand dollars you're not allowed to have more than two thousand dollars or it probably certain benefit programs not all of them okay but the able account said you can have 15 thousand dollars i'm still confused so the able account you're not penalized at all exactly so and so um so you can have so under the Medicaid rules and so two thousand and one dollars in cash yeah in your bank account yeah that penalizes you but the able account or a special needs trust are exempt assets so you could have a special needs trust with a hundred thousand dollars in it and it doesn't count against the two thousand dollars that's good you could also own a house and a house cost more than two is worth more than two thousand dollars that doesn't count against you a car uh you can own a car and that doesn't count there are organizations by the way that um do give cars or modes of transportation to people um on low income by the way you know that there are certain situations like that as well so if you own a car that's worth two thousand and one dollars it doesn't matter because a car is exempt if you own a car that was worth twenty thousand dollars it still doesn't matter because your automobile is exempt so my point is that that there are certain assets including a special needs trust and enable account that don't count against your eligibility and that's part of what we're doing in our offices trying to help families understand okay well you can do this with the money but you can't do that and so but the able account is doesn't count what okay so what are the rules simplify it okay um okay for example they have i'm just going to bring up the food stamps for a second within the food stamp program you can buy certain things but you can't buy others so within your trust situation in terms of what a person can and cannot do can you what exactly so generally speaking uh the trustee is is paying for things out of the trust directly so for example uh so a person with a disability they're receiving Medicaid uh and they need a new TV or they need new furniture in their house the trustee can pay for all of that new furniture and as long as they pay for it directly instead of so i'm not going to give you cash out of the trust if to go buy the furniture yourself i pay the furniture company directly you get all of that new furniture and it doesn't affect your benefits because i paid for all of that so directly out of the trust rent rent is a little funny okay if you're on ssi and the trustee pays for rent you might lose up to about 270 of ssi but you don't lose your Medicaid and you don't lose all of your ssi so that's confusing it is confusing okay so they're not allowed to rent rent and food well it you're allowed to it just means that there might be a reduction in your ssi so it is and you're absolutely right it is confusing so i could pay for your uh you know if i'm the trustee i could pay for your cable tv bill uh a hundred dollars every month no impact on your ssi no cell phone for the person sure so let's say i spend uh if i'm the trustee of the trust and i spend 200 a month on a cell phone and a cable tv bill if i spend that same 200 dollars and pay it to the landlord for rent the ssi is going down by 200 dollars uh what about clothes and clothes are okay you can pay for clothes the rule changed on clothes it used to clothes used to be included with food and rent uh as something that you might receive a penalty and reduce your ssi but if i'm paying for food or rent there might be a reduction in ssi how many gifts are included in that but if well so what i was going to say is but if um if the person is on ssdi there's no impact on the ssdi if i pay the rent really really that's kind of funky yes it is kind of funny yeah so so it so and the names are you know ssi versus ssdi medicaid versus medicare it's confusing stuff um and so and again if you're on ssdi i can pay some of your rent and there's no impact on your ssdi suppose if it's a medical expense that your insurance will not pay surgery that's a great use of special needs trust money uh you can absolutely pay some sort yeah so if if you're on medicare and medicaid and you want to try some experimental treatment or no if you need a person needs a surgery for pacemaker or something that something like that is probably going to be covered under the medicaid or medicare programs i i certainly don't know each and every procedure that's covered but so something like a pacemaker or you know open heart surgery that is likely to be covered by your publicly funded health care but uh we have had um we have had trustees we've worked with trustees that are paying for maybe something like additional massage therapy you know maybe your insurance only pays for 10 sessions of massage therapy or what about additional let's say acupuncture acupuncture physical therapy sure stuff like that you can pay for those things out of the trust without having a negative impact on your medicare vacations just to pay for that yes it can okay up to 30 days if you're honest if 30 days if you've left the state for more than 30 days that can create an issue for medicaid but yes generally speaking vacations can be paid for in some instances if the person who's the beneficiary of the trust and who's a person with a disability if they can't if they need assistance to go on vacation they need it if they have mobility challenges or health challenges the trust can not only pay for them to go on vacation it can also uh it can also pay for a caregiver i am okay hold on they can the trustee can also pay for a companion a necessary uh companion like an aid a personal care attendant wouldn't wouldn't medicare and medicaid pay for that doesn't that cover that medicare and medicaid generally aren't paying for a companion's airplane ticket to go to florida oh okay no do they pay for an aid let's say you need an aid so if you need an aid and so for some folks they've got a limited number of hours that you've got a medicaid funded uh pca or care attendant right so um if medicaid is only paying for a certain amount the trust can pay for additional hours um no and again they could pay for the airline tickets if you are going on vacation as you so now um end of life with a trust be able to pay for hospice care or is that or hospice to the extent that wouldn't be covered by an existing pro i mean that yeah and that is likely something that uh and i'm not a hundred percent certain but that's likely to be something that's covered by uh your public health care programs so you shouldn't medicare and medicaid you should need the trust to pay for hospice um if it wasn't covered sure the trust could pay for that nursing homes too uh again generally speaking uh nursing homes are going to be paid for um medicare is not going to pay for a nursing home beyond 120 days but typically folks who are eligible for uh medicaid uh if their health uh is such that they require a nursing home level of care medicaid will pay for that well so um is there anything there's a lot of things that the trust can do anything we have eight minutes is there anything that we haven't covered uh i don't you know i i there's not anything that i can think about the top of my head that we haven't covered um and again a lot of what we're doing in addition to drafting these documents is providing education to family members um when uh about what they can and cannot do with the trust uh you know part of our work is sometimes includes um if there are parents who are getting divorced and they have a child with a disability sometimes we get involved in that uh those kinds of matters it gets kind of strange with that particularly well i so i'm not a family law lawyer but sometimes i'll get involved if there's a person with a disability involved in a that's part of a family where there's a divorce going on again the majority of our work is helping people understand what they can and cannot do with with benefit programs and as we talked about they're very different uh and again different in terms of from state to state uh well some benefits are are the same some benefits are federal so they're not different state to state but again they're different between ssi and ssdi are very