When qualifying and establishing an appropriate Special Needs Trust there are certain words or verbiage that may seem a bit confusing or unclear. To lessen the confusion and increase a better understanding of specific terms we have created a list of relevant terms with appropriate definitions related to the Pooled Special Needs Trusts.
Accountings: Explanation overview of trust activity for a specified time frame. It is prepared by the trustee (CPT Special Needs Trusts). Such accountings may be required by courts or Social Security Administration (SSA).

Advocate: An individual who has the capacity to fulfill the necessary duties a beneficiary is unable to perform. Such as submitting disbursement requests with proper documentation, contacting appropriate special needs trusts personnel if an issue arises with a beneficiary’s public benefits.

Beneficiary: Individual whose benefit the trust is being established. An individual who is classified as disabled by the Social Security Administration, is no longer able to return to work, and is receiving government benefits.

Bond: Trustee (CPT Special Needs Trusts) has a bond (insurance policy) which provides protection and security against possible fraud, negligence or loss of trust assets. In an event such incident may arise the bonding company agrees to pay specified sum of money to reimburse the trust(s).

Countable Resources: In order to be eligible for Medicaid, assets/resources must be kept under $2000.00 if individual. If married, no more than $3,000.00 combined in assets/resources.

Conservatorship: Involves a court case where a judge appoints a responsible party (individual or organization)

First Party Special Needs Trust: It is known as a (d)(4)(A) trust, that is funded with assets or income that belong to an individual with a disability, and who is the beneficiary of the trust. In order for the assets of this type of trust not to count of age 65 when the trust is created and funded; the trust must be irrevocable and provide that Medicaid will be reimbursed upon the beneficiary’s death or upon termination of the trust, whichever occurs first; and the trust must be administered for sole benefit of the beneficiary. Funding comes from a personal injury settlement, workers’ compensation settlement, or inheritance the beneficiary receives directly.

Guardian Ad litem: An individual the court appoints to be responsible in protecting the well-being and interests of a minor.

Grantor/Settlor/Trustor: A person who creates and funds the trust. In first party special needs trusts the grantor would be the beneficiary, in which the trust funds with the beneficiaries own monies. In third party special needs trusts it is anyone other than the beneficiary (parent, grandparent)

Irrevocable: A trust that cannot be withdrawn, cancelled, or reversed.

In Kind Support and Maintenance: Also known as ISM. Food or shelter that someone else provides for an individual who is on Supplemental Security Income. If the trust or someone else pays for individual’s rent, mortgage, food, or utilities it will reduce an individual’s SSI payment/benefit.

Medicaid: Is an assistance program that serves low-income individuals of any age. It is a federal-state program and differs by state

MediCalMedi-Cal is California’s Medicaid health care program. This program pays for a variety of medical services for children and adults with limited income and resources. Medi-Cal is supported by federal and state taxes.

Medicare: Is a health insurance program where medical bills are paid from trust funds which those covered have paid into. Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD)

Medicare Set-Aside: A Medicare Set-Aside is a trust or trust-like arrangement that is set up to hold settlement proceeds for future medical expenses. A specialized company evaluates your future medical needs, recommends an amount that should be set aside for future medical care, and the government approves the amount. The funds are then either placed in the Medicare Set-Aside account in one lump-sum or the account is funded with a “structured settlement annuity” that will refill the account over time. 

Presumed Maximum Value: Also known as PMV. PMV is a value created by Social Security and represents a cap on the amount that can be deducted from the trust beneficiary’s monthly SSI benefit. The PMV is equal to 1/3 of the Federal benefit rate plus $20.

Remainder Beneficiary: Upon the beneficiary’s death, remainder beneficiaries are individuals who receive remaining trust assets, if any after termination fees and state liens are paid.

Special Needs Trust: Trust that protects a beneficiary’s eligibility for government benefits such as Medicaid and Supplemental Security Income.

Supplemental Security Income: Known as SSI. It is a federal income program funded by general tax revenues. It is constructed to assist aged, blind, and disabled individuals who have little or no income, provides cash to meet the basic needs for food, clothing and shelter. Individuals who have more than $2,000 in assets cannot qualify.

Social Security Disability Insurance: Known as SSDI. Pays benefits to individuals and certain family members if they have worked long enough and paid social security taxes. An adult child may qualify for benefits on an individual’s earnings record if he/she has a disability that started before the age of 22.

Third Party Special Needs Trust:  Referred as supplemental needs trust, funded with assets belonging to an individual who is not the beneficiary. Fund sources come from gifts, inheritance from parents/grandparents, and life insurance policy proceeds. No provisions regarding pay back to Medicaid upon the termination of the trust. The individual who creates the trust decides how the trust estate is dispersed when the beneficiary passes.

Trust Agreement: A written document/contract between grantor of the trust and the trustee providing terms of the trust joinder and termination.

Trustee: An individual or entity who administers the trust in accordance to the trust agreement. The trustee is in charge of investing funds, accounting for income, payment for requests, and making distributions following Social Security Administration rules, regulations, and Program Operations Manual System(POMS).

These terms and definitions are to be used as a resource to improve clearer understanding of trust documents and communication with CPT Special Needs Trusts. CPT’s intent is to establish definitions that adhere to the field of special needs trusts, trust agreement/documents, and relevant laws and regulations.
Special Needs Trusts can be intricate and the terms may vary by state. It is important to have a professional or individual who has expertise in the field of special needs trusts or special needs planning review the documents and assist if establishing a special needs trust account meets the needs of an individual who may benefit from a special needs trust.

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