Case Scenarios

Case Scenario Frequently Used Terms

SNT = Special Needs Trust | ACA = Affordable Care Act
PMV = Presumed Maximum Value | SSI = Supplemental Security Income |
IHSS = In Home Support Services

Case 1: What is the difference between Individual and Pooled Special Needs Trusts?
All SNT's, Individual or Pooled, protect eligibility for SSI and Medicaid. The primary difference is that the trustee of a Pooled SNT is a charity or a non-profit association. Generally, trustee fees are dramatically less than a corporate trustee.

Case 2: My Client does not know what the benefits they receive. How can I find out?
The Client can visit or their local SSA office based on the zip code where they live and request a summary of the benefits they are receiving.

Case 3: My Client has Medicaid. Do they need a SNT?

It depends. An SNT would be necessary to preserve Traditional Medicaid, but it is not necesssary for Expanded Medicaid (unless the Client is close to age 65). These types of Medicaid are defined as:

1. Expanded Medicaid - Client qualifies due to low income. There is no asset test - Client can have assets and not lose Medicaid. This is not available in some states and terminates at age 65. Clients who receive Medicare are not eligible for Expanded Medicaid.

2. Traditional Medicaid - Client qualified because they are disabled and unable to work. This is needs based, meaning that only someone with less than $2,000 of countable assets and minimal income can qualify. *Asset and income test applies.

*Does not apply in California

Case 4: How can I determine what type of Medicaid my Client has?
It may be difficult. The agency does not often inform clients what type of Medicaid they are receiving. If the Client is disabled, unable to work, and has assets below $2,000 they only qualify for Traditional Medicaid (Need SNT to preserve eligibility). If the client is not disabled, under 65 and has assets but income is below the FPL (Federal Poverty Level), they qualify for expanded/MAGI Medicaid.

Case 5: My Client receives expanded Medicaid. Do they need a SNT?
Generally, no, Expanded Medicaid is only available for *individuals with low income. There is no asset test. However, Expanded Medicad terminates at age 65 or once the individual qualifies for Medicare.  So, a person who is close to that age may want to consider using an SNT if they will need Traditional Medicaid at age 65.

*Some states do not allow funding a SNT once an individual turns 65

Case 6: My Client has SSI. Do they need an SNT?
Yes. SSI is a needs-based program, meaning that only someone with less than $2,000 of countable assets and minimal income can qualify. Placing assets in an SNT will preserve eligibility for SSI. If a person is over the age of 65, there is a potential loss of three years of SSI before SSI is reinstated. Note that a Client may have SSDI and SSI.

Case 7: My Client has SSDI. Do they need an SNT?
It depends.

1. If the client receives SSDI and Medicare, and they can afford the cost of a Medicare supplemental policy, they do not need to utilize a SNT. However, these policies can be cost prohibitive over time.

2. If the client receives SSDI and Medicare and cannot afford a supplemental policy and they have a chronic health condition, they can use a SNT to preserve eligibility for Medicaid.

Caution: Clients who were low wage earners may be receiving SSDI with an SSI supplement. They will need an SNT to preserve their SSI and Medicaid eligibility.

Case 8: My Client receives SSDI with a SSI supplement. Do they need a SNT?
To preserve SSI eligibility, the Client should put assets into an SNT. During SNT administration (and depending on the size of the SSI check), the payment of food or shelter items from the SNT may reduce (or possibly eliminate) the SSI check. The Client may elect to apply for Medicaid directly, to avoid restrictions associated with SSI.

Case 9: My Client will be receiving a large settlement and is on Medicaid and SSI. Do they need a SNT?
If depends. If the client lacks capacity to manage his or her own financial affairs, then yes. If the person can manage his or her own financial affairs, then maybe. It will depend on the future costs of care, primarily concerns with custodial care and skilled nursing care. Health insurance policies can be paid through a Special Needs Trust if necessary, if the individual would like to preserve Medicaid eligibility as funds dwindle. A careful financial budget should be considered to determine  the likelihood of the client outliving his or her money.

Case 10: My Client receives Social Security Retirement benefits. Do they need a SNT?
It depends. Generally, no, but if the Client is receiving Social Security Retirement benefits and is totally and permanently disabled, the Client may also qualify for traditional Medicaid.

Case 11: Could my Client need a SNT if they receive Social Security checks?
It depends on what type of Social Security payments are being received. If it is SSI, then yes. If it is SSDI or Social Security for retirement, then an  SNT is unnecessary.

Case 12: My client does not utilize SSI or Medicaid but their spouse/minor children do. Do they need a SNT?
A client's settlement proceeds may jeopardize benefit eligibility for their spouse or minor children. Please call us for a case consult.

Disclaimer: This resource provided by CPT Institute is for informational purposes only and arc intended to be used as a non-legal guide prior to consultation with an attorney familiar with your specific legal situation. CPT Institute is not engaged in the practice of law or in rendering legal advice or counsel. No such legal advice or counseling is either expressly or impliedly intended. If you require legal advice, you should seek the services of an attorney. © 2021 CPT Institute All rights reserved.