Special Needs Trusts

child holding parent's hand

Special Needs Trusts

Planning for individuals with a disability has changed dramatically. With approximately one in every eight people in the United States considered disabled, planning has become much more prevalent and complicated than it used to be. Considerations include government programs, utilizing exempt resources like single premium annuities, ABLE savings accounts and Special Needs Trusts. 

One of our administration specialties is Special Needs Trusts.  With a track record of more than four decades, Prairie Financial Group  administers more Special Needs Trusts than any other Wisconsin based trust company, including Third Party and First Party Special Needs Trusts, and the Community Special Needs Trusts for Life Navigators and ARCH.

Third Party Trusts
Self-Settled Trust (First Party Trust)
Community Pooled Trusts
Wisconsin Pooled Trusts
Stand-Alone SNTs: First and Third Party Trusts
Special Need Trust Resources

Types of Specials Needs Trusts

Prairie Financial Group Special Needs Trust type table

Third Party Trust

Funded with assets that never belonged to the beneficiary.

  • Inheritance or gift from mom, dad, a relative or friend
  • Life Insurance - Name the trust as beneficiary

Upon death of beneficiary, any funds remaining will be paid to the remainder beneficiaries named in trust instrument.

In-kind support and maintenance items.

  • Food, mortgage, property taxes, rent and household utilities
  • 1/3 reduction in Social Security Income (SSI)

Allowable distributions (not all inclusive).

  • House, including household furnishings and furniture
  • TV, computers, electronics, phone, cable and internet services
  • Clothing
  • Transportation
  • Travel and entertainment
  • Medical equipment, medications, therapy and Care Management
  • Pre-need funeral arrangements
Cash to beneficiary - limited.
  • $20 disregarded for SSI but not for Social Security Disability (SSD)
  • Dollar for dollar reduction in SSI
  • Could disqualify beneficiary from receiving SSI and Medicaid

Self-Settled Trust (First Party Trust)

Funded entirely with assets that belong to the individual with a disability.

  • Personal injury settlement
  • SSI back payment
  • Outright inheritance from mom, dad, a relative or friend

Upon death of beneficiary, any funds remaining need to be paid back to the State Medicaid program first.

Community Pooled Trusts

Medicaid and SSI law permit “(d)(4)(C)” or “pooled trusts” for beneficiaries with special needs. Such trusts pool the resources of many beneficiaries; investments are managed by a non-profit association that typically hires a trustee to administer.

Unlike individual disability trusts, which may be created only for those under age 65, some pooled trusts may allow for beneficiaries of any age and may be created by the beneficiary herself.

At beneficiary’s death, the state does not have to be repaid for its Medicaid expenses. Instead, funds are generally kept in a retained fund for the benefit of other disabled beneficiaries.

Wisconsin Pooled Trusts

Prairie Financial Group Special Needs Trust pooled trust table

Stand-Alone SNTs: First and Third Party Trusts

Attorney drafts document naming Prairie Financial Group as trustee.

  • Choice and flexibility of administration.
  • Prairie can handle all aspects of administration and management of SNT.
  • Prairie can also work with an outside investment advisor and directing and delegating parties.

Special Needs Trusts Resources

On December 13, 2016, President Obama signed the 21st Century Cures Act. This enables individuals with disabilities to create their own self-settled Special Needs Trust without having to go to court. Read more here.

Click here for the 2017 Social Security Changes Fact Sheet. 

Click here for more about ABLE savings accounts and a tool that compares state programs. 

The Special Needs Alliance provides a free Trustee Handbook. Click here to download your copy. 

Click here to print our Special Needs Trust fact sheet.

Request a trust review. Connect with Prairie Financial Group.

Call (262) 522-7400 or Toll-Free (855) 591-2950 or email PrairieFinancialGroup@waukeshabank.com