Frequently Asked Questions
Does LET have a minimum account balance that must be reached before funds can be withdrawn?
Yes. We understand that many other supplemental needs trusts do require a high minimum account balance to be established (and/or maintained) before any disbursements can be made. With LET, trusts can be established with as little as a $400 initial deposit with a minimum balance requirement of $150.00
What are the benefits of having a Special Needs Trust (SNT)?
If an individual receiving government benefits wants to keep money either earned, gifted, received in a settlement, received through a sale, etc., and wants to continue receiving government benefits, a Special Needs Trust (SNT) is a great option. With an SNT, an individual is permitted to retain assets in excess of the income limit placed on them by government agencies, while retaining their benefits. These funds can then be used for the benefit of the beneficiary, provided the trustee follows the guidelines set forth by government agencies to keep the trust from being counted as a resource.
Can I open a Special Needs Trust after the age of 65?
Trusts that are established when a disabled person is under the age of 65 continue even after the person becomes age 65. Funds added to the trust after the person reaches age 65, however, will not be exempt for government resource purposes. While Pooled SNTs are available to disabled persons over the age of 65, certain states may impose a transfer penalty for funds transferred into an SNT for less than fair market value. A disabled person over the age of 65 should consult legal counsel before establishing an SNT.
Who can set up a trust?
Pay-back trusts and Pooled SNTs may be established by a disabled individual, their parent, their grandparent, their guardian, or a court.
What can I use the trust funds for?
Once the funds are deposited into the trust, they can be used for items or activities that would enhance the beneficiary’s life, and supplement the beneficiary’s other government benefits. Trust funds cannot be used to supplant government benefits that the beneficiary receives. The trust funds must be used for the sole benefit of the beneficiary. This includes, for example:
* household expenses other than food, rent, mortgage, or utilities;
* domestic and personal care services (housekeeper, grooming, meal preparation);
* a vehicle used for transporting the beneficiary; and,
* therapies and medical care not covered by government benefits.
What happens to the trust after the beneficiary of the trust passes away?
The Pooled SNT is a “payback trust.” Therefore, upon the beneficiary’s passing, the trust must repay Medicaid for all Medicaid benefits that the beneficiary received. The trustee will notify the state Medicaid program, and request a Statement of Claim. Once the Medicaid payback requirement has been fulfilled, any remaining trust funds can be disbursed per the trust agreement. Once all of the trust funds have been properly distributed, the trust account is closed.
Can this trust pay for the beneficiary’s burial and funeral expenses?
Yes, the trust can pay for a beneficiary’s Irrevocable Prepaid Burial Arrangements, or transfer funds into an Irrevocable Burial Account (held at financial institutions), while the beneficiary is living. Once the beneficiary passes away, the trust funds are frozen until any state Medicaid benefits have been repaid.
Can this trust be used to purchase a home or vehicle?
Possibly. The use of trust funds is governed by strict guidelines, so as not to interfere with the beneficiary’s eligibility for government benefits. The guidelines for vehicle and housing purchases are included in separate Vehicle and Housing Purchase applications, which must be completed by the beneficiary and submitted to LET in advance for consideration. Copies of LET’s Vehicle and Housing Purchase applications are available upon request.
Do I need to collect receipts?
Yes. As trustee, LET must account for all funds spent from the trust, and ensure that the use of any trust funds is compliant with Federal and state law. Because of those strict guidelines, LET must require proof of purchases to ensure that all purchases made from trust funds are allowable expenditures under the Social Security and Medicaid guidelines. You have received a copy of the updated LET Disbursement Policy that should be reviewed closely. Please note that LET is subject to periodic audit by governmental entities, which emphasizes the requirement for receipts for all trust disbursements.
Can my trust be terminated?
No. By law, SNTs are irrevocable, and cannot be terminated prior to the beneficiary’s death.
Do we need to maintain a minimum account balance in a Life Enrichment Trust account? For example, what if an individual has $10,000 in their account and they want to take an expensive trip, like to Hawaii where the cost would be approximately $9,000… can we request this amount?
Yes! You can most certainly request this amount! There are no minimum account balances that must be maintained to continue receiving the benefit of a Life Enrichment Trust account.
Can a representative payee establish a Pooled Trust for an individual with disabilities?
From time to time the question of whether a representative payee can establish a Pooled Trust on behalf of an individual with disabilities has been raised. This is largely created by the fact that the language in the federal statute related to Pooled Trust does not specifically describe the representative payee but states only a parent, grandparent, a court, legal guardian or the individual with disabilities can establish an account in a Pooled Trust. In 2002, the Federal Social Security Administration made an official determination on this subject. Please see the next question.
Can an individual’s representative payee complete an LET Joinder/Master Trust Agreement and then sign the document as the settlor? Is it possible for the individual to sign as settlor?
While Pennsylvania and many other states permit representative payees to sign as settlor, some states do not. We recommend that both the representative payee and the individual sign the Joinder/Master Trust Agreement.
If an individual signs by making a mark, or has an illegible signature, what is the proper procedure to make their mark or signature legally binding?
When an individual signs by making a mark, or has an illegible signature, it is best to have two other individuals sign as witnesses, attesting to the fact that the mark was actually make by the individual who is signing.
Can the trust lose or gain value depending on how the investments perform?
Yes. While it is the intent of the trust to invest the funds as a prudent investor and seek to have income for the fund, it is possible, depending on market conditions and investment performance, for the trust to lose or gain value. To minimize risk of loss, Life Enrichment Trust utilizes a conservative investment policy.
Can I view the funds in a LET Pooled Trust Account online?
Yes. Simply click on S&T Trust Online on the navigation bar above to learn more.
What can I buy with funds protected in a LET Trust Account?
This is a very common question: “What can I buy?”. A number of goods and services can be funded through a supplemental needs trust. The following list is not by any means comprehensive; but, it does provide a sense of what types of distributions are permitted.
personal care items
vacation travel expenses
field trips/day trips, etc.
pet grooming/veterinarian bills
attorney/accountant/financial planning fees
cell phone services
eye and dental care
tuition to camps, classes, etc.
athletic league fees
concerts, movies, sporting events, etc.
modifications to make vehicle handicap accessible